Labour must conquer the politics of pessimism
Labour must conquer the politics of pessimism
We won’t win a mandate to roll back inequality unless we tackle the ‘three impossibles’.
I think it was Oscar Wilde who once defined a pessimist as ‘One who, when he has the choice of two evils, chooses both.’ Which is why pessimists tend to make bad electoral choices.
Yet at my book talk at the Stratford Literary Festival this weekend, I was struck by the politics of permission expressed in two big questions to which I’d add a third, repeated to me time and time again on the doorsteps of the West Midlands during the local elections.
Together, you could call it: ‘the challenge of the three impossibles’:
Isn’t a new golden age is impossible?
Isn’t a share of progress for ordinary people impossible?
Isn’t it impossible for you (Labour) to deliver, when to coin a phrase, there is no money? And we can’t see the difference between you anyway.
It is vital for Labour to wrestle the pessimism behind each of the questions - because American evidence is very clear that optimists are more inclined to vote for progressive parties.
Winning power is easier when there’s more optimists to go round, which is why we need an awful lot more progressives - like the brilliant Alec Ross - writing books about the industries and opportunities of the future.
Now, today’s pessimism isn’t hard to understand. Living standards have endured their worst growth since records began. The outlook for global growth is poor - 1% lower than at the turn of the century. The world is splintering into new power blocks as Cold War II begins. Global trade is struggling to recover.
And just to depress us further, people are now sceptical about whether they would even benefit from progress even if some somehow appeared. Why? Because of the way elites have so effectively captured extraordinary prizes from a decade of east money.
Since 2010, the top 1% in Britain have multiplied their wealth 31x faster than everyone else. No wonder our polling shows that people now believe the top 1% have more power than national governments.
The third challenge is of course the state of the national debt. I thought things were tight when I left my ill-judged leaving note at the Treasury back in 2010, an error I will regret for ever. But now things are far, far worse. Debt is now an eye-watering £2.7 trillion costing us £73.5 billion in annual interest payments.
With such an outlook, it’s no wonder Labour is uber-cautious about making promises. But too often that’s heard by voters as ‘you’re all the same’.
So what is Keir to do?
How to own the future: start by talking about it
Well, there’s an old trope that successful parties ‘own the future’. After the misadventures of the 1950's, Labour worked hard to ‘own the future’ in the Sixties. A series of papers and speeches – Signposts for the Sixties, and Labour and the Scientific Revolution, set the stage for Harold Wilson’s sizzling Scarborough speech which argued for Britain to embrace the ‘white heat’ of the future. It helped him win an election. That is why today you can often find a sage or two in Westminster wandering round muttering ‘we must own the future.’
But, ‘owning the future’ means actually describing what the future looks like, offering a plan to unlock that potential and crucially, explaining how the harvest of tomorrow will be fairly shared.
It shouldn’t be hard. Because contrary to jeremiads like the American economist Robert Gordon, the future is going to be extraordinary.
Gordon once argued that economic growth could prove ‘a one-time thing centred on 1750–2050', and that today,
‘The process of innovation may be battering its head against the wall of diminishing returns’.
After the great breakthroughs of the first three industrial revolutions that brought us steam and railroads (1750 to 1830), electricity, the internal combustion engine, running water, indoor toilets, communications, entertainment, chemicals, petroleum (1870 to 1900) and computers, the web, and mobile phones (1960 to present), Gordon argued that the big breakthroughs were behind us and so future growth in consumption per capita for the poorest 99% could fall below 0.5% per year for decades.
I disagree.
Technology is a consistent surprise. Change is so fast now that we’re seeing science fiction become a reality in our own lifetimes. Ideas that featured in Blade Runner, Star Trek, Star Wars – like bionic limbs, mobile phones, artificial intelligence, 3D printing, tablets, space stations, driverless cars – are already with us.
In fact there is incredible change possible for the years ahead.
A baby born today will be getting on for thirty in 2050. If all goes well, that baby will still be around in 2100, and might even be an active citizen of the 22nd century. And as Kristalina Georgieva recently suggested in a lovely speech in Cambridge, over the course of that child’s life, living standards could multiply by anywhere between three and thirteen times.
Kristalina reminded us that if we’re not careful we risk the polarisation about which Keynes warned us in the 1930’s when he wrote;
“I predict that both of the two opposed errors of pessimism which now make so much noise in the world will be proved wrong in our time—the pessimism of the revolutionaries who think that things are so bad that nothing can save us but violent change, and the pessimism of the reactionaries who consider the balance of our economic and social life so precarious that we must risk no experiments.”
In fact we should avoid both the snares of reactionary or revolutionary politics. Because what is needed is a reformation, animated by a confidence that five big changes are going to transform the future:
The size of the global economy is set to double in just the next 35 years, and
Global gigabit connectivity will connect together this market like never before
Artificial intelligence will offer a £6 trillion prize
Genetic medicine will transform healthcare and foster new industries, and
The shift to a green economy will create hundreds of thousands of new well-paid jobs.
Let’s look at each in turn.
1. A bigger global market
The world’s population is expected to increase by nearly 2 billion persons in the next 30 years, from the current 8 billion to 9.7 billion in 2050 and could peak at nearly 10.4 billion in the mid-2080s – and despite the catastrophic set backs of this year, the global middle class will swell to perhaps 5 billion people by 2030. Visa reckon that in just 22 key countries, consumer spending will grow by an estimated $15 trillion, with middle class households accounting for more than 60 percent of that increase. If we’re smart we’ll find ways to boost exports into these new markets.
This new global market will be linked with global gigabit connectivity - triggering a huge ‘creator economy’
Today, two-thirds of the world is now online. But that number could swell to 90% by 2030. That is an extraordinary 7.5 billion people. Many of these people will be young - and creative. Indeed, as Gen Z comes of age, they are going to build an extraordinary creators economy empowered by the advent of global gigabit connectivity delivered by the new cyber-space network built in space itself.
Elon Musk’s Starlink project - already has a mega-constellations of 6,000 satellites into beaming mobile internet connectivity into every corner of the planet. Amazon’s Project Kuiper aims to launch 3,236 internet-providing satellites while Facebook’s Athena programme aims to test internet satellites alongside testing drones built by Airbus.
In the future, many of these new networks will be 5G, and therefore powerful enough to deliver ultra-high resolution 4K video calling with image quality that rivals digital cinema. The nearly real-time speeds of 5G will let haptic interfaces transmit the physical sense of touch, transforming telehealth, telesurgery and emergency A&E services. And with 5G networks in place, tied directly into bots, goods could be delivered safely within hours. Within our lifetimes, global gigabit connectivity will connect everyone and everything, everywhere, at ultra-low cost.
This technology will be a gigantic boost for the content-based creative economy and within a generation, consumers may be spending more on content than any other product category. Two billion people worldwide already have the tools to create and distribute original content - and now, everyday goods and services (finance, insurance, education, and entertainment) are being digitized and available to the new middle class on mobile devices.
Pioneers like Netflix and Spotify have figured out how to succeed in this economy by super-refining personalization to such a degree that we’re prepared to pay in advance for content to be consumed later. This cracks the content pricing problem of zero-marginal-cost businesses and so, it’s likely that these emerging subscription models will support millions of artists in micro-markets easily accessed over the internet.
Education will be a huge part.of this market because 5G plus artificial intelligence unlocks augmented reality learning will let us learn something in the moment we need it. And entertainment will be reinvented with CGI-powered immersive experiences. Like “Ready Player One” gamers will have access to an expansive virtual reality universe loaded with sophisticated CGI that blur Lines between fantasy and reality.
This is of course a huge opportunity for the UK because as the House of Lords recently flagged, the creative industry alone already adds £109 billion to the economy.
Managed well, Artificial intelligence offers a £6 trillion prize
According to Goldman Sachs, AI and related technologies, from robotics to big data to cyber-security could boost productivity growth by 1.5%/ year over the decade ahead, adding an extraordinary £5.7 trillion in additional output to the world economy. These are extraordinary gains which could, as the IMF puts it:
‘improve health care diagnoses, close education gaps, tackle food insecurity with more efficient farming, drive planetary exploration—not to mention eliminate the drudgery of work.’
Its deployment will have to be managed with incredible care, as bluntly, two scenarios confront us. If AI replaces workers rather than complements them then we will see an explosion in new inequalities, as millions of jobs are destroyed while returns to capital and higher earners rise exponentially.
Yet the prizes are significant:
As massive computer power spreads, so entrepreneurs will radically accelerate the time its takes to develop and ship new products.
As quantum computing will outgrow its infancy by 2025, and a first generation of commercial devices will help us solve real-world problems - like simulating complex chemical reactions - allowing us to prototype extraordinary things from new vaccines to new music on screen before production.
Meanwhile, quantum chemistry will let us design new materials faster, like better catalysts for the automotive industry. So where today we still rely heavily on. trial and error, quantum computers will dramatically cut the time it takes to design and test new products – and cut the cost of R&D.
The possibilities of AI are all the greater because it will add to, build on and multiply the possibilities of big data, cyber-security and blockchain.
Over 90% of the world’s data has been created in just the last couple of years. We now create more data in a minute from TVs, watches, and other connected devices than was created from the beginning of time until the year 2000). By 2025, there may be over 55 billion smart connected devices in the world producing by 2025, some 175 zettabytes of data. As Alec Ross reminds us, just as new industries will be built on oil in the 19th century so in this century new industries will be built on data. There’s certainly going to be enough of it.
Because of this revolution in both connectivity and data, we’re going to need a heck of a lot more security. And that is a huge opportunity for the new cyber-security industry in which Britain is a world-leader.
Blockchain will help us manage this new environment with lots of helpful tools. Crucially block chain will let us trace assets back to their origin and allow for example, consumers to see right through the supply chain of the products they are buying. IBM, for instance, has already introduced a new app that uses blockchain to link consumers up with the farmers who grow their coffee beans. When buying coffee, an app on your mobile let’s you check where it comes from, how it’s grown, distributed, shipped, exported, blended and roasted.
4. The transformation of healthcare, long predicted, is about to arrive
A dozen game-changing biotech and pharmaceutical breakthroughs could be together about to add an entire decade to the human healthspan as genome sequencing, CRISPR technologies, AI, quantum computing, and cellular medicine all are combined.
Technically, it’s quite possible that by 2025, healthcare systems could be using AI-powered and systems biology-based technology that exponentially grows our knowledge.
Genone sequencing is becoming so cheap we may soon be able to make sure everyone gets their genome sequenced at birth.
Together with AI, and state-of -the-art security, doctors may be able to accurately predict which medicines will work best for any given condition.
Our ability to create genuinely individualised medicines will be transformed by computers powerful enough to modeling the way the human body will react.
Crispr/Cas9 genome-editing technology will radically simplify the business of genetically engineering organisms, unlocking the possibility of high-precision genome modification of everything from crops to reprogramming human blood cells to fight otherwise untreatable diseases.
Together, this revolution is not only going to extend and enrich human life. It a vital industry of the future.
5. The transition to a low-carbon economy will create hundreds of thousands of good jobs.
Finally, the whole world is going green and that’s a huge opportunity for those who make the technologies that cut carbon. Today, the UK’s green economy already employs 639,400 people and those job numbers are growing at over 8% a year.
But in the future, advances in solar, wind, geothermal, hydroelectric, nuclear, and localized grids will drive down the cost of energy towards cheap, abundant, and ubiquitous renewable energy. Carbon-heavy industries will soon be using machine learning and AI technology to dramatically reduce their carbon footprint. Gigaton-scale CO2 removal will help to reverse climate change. Scaling up of negative emission technologies, such as carbon dioxide removal, will help remove historic CO2 from the air permanently. Crucially, we need to decarbonise the domestic heating of our homes, which will prove the biggest job creator of them all.
This is a huge opportunity for the UK, especially in retrofitting and domestic heating, public transport, low carbon energy, hydrogen and carbon capture and storage, plus EV battery making and vehicle manufacture. All in all, the UK Climate Change Committee reckons:
Between 135,000 and 725,000 net new jobs could be created by 2030 in low-carbon sectors, such as buildings retrofit, renewable energy generation and the manufacture of electric vehicles.
So, when we put it all together, there is every chance that the decades ahead will be a golden era. So we ought to be more confident and imaginative in the way we talk about it. But, my final point is this.
In her Cambridge speech setting out the potential of the future, Georgieva reflected back on the forecasts Keynes has made in the 1930’s.
In The Economic Prospects of Our Grandchildren, Keynes had forecast that by now, the advance of technology would mean we were all working an easy 15 hours a week.
And yet we’re not. Why?
Because Keynes had not reckoned with the growth in inequality.
So if the prizes of tomorrow are to really change the lives of all, we’re going to have to get an awful lot better at figuring out how to share them. And that’s a topic for a whole book, which you can order here.