As predatory behaviour by energy companies, payday loan firms and banks rises up the political agenda, what are the prospects for the locusts and the bees?
Earlier this year Princeton University Press published my book The Locust and the Bee: predators and creators in capitalism’s future. It’s had healthy sales without being a bestseller, generally positive reviews plus a fair share of denunciations. It’s been read by a good number of senior politicians and business leaders in the UK and around the world (translations are also imminent in Chinese, Russian, Arabic, Italian and several other languages).
The book’s main political argument was very simple: that to be credible in the post-crash era, political parties needed to demonstrate both how they would rein in the locusts (predatory monopolies & oligopolies that otherwise suck value out of the economy) and how they would mobilise the bees (the creative innovators, makers and entrepreneurs who drive growth).
An early draft of the book was read by Ed Miliband, who drew on it for his 2011 speech on predators and producers. Government ministers who read drafts recognised that they risked being outflanked if they were seen as too cosy with business incumbents. Now, at the end of 2013, politics is full of arguments about how to deal with predators – energy companies, payday loan companies, big banks to name a few.
The orthodox view that any criticism of business is unacceptable has been challenged, and we’ve seen a revival of interest in the robust pro-competition and pro-consumer policies that historically did so much to make capitalism work. There’s plenty more to be done – not least in turning finance into a servant of the economy. But at least the right questions are being asked.
Yet I’m disappointed how little progress has been made on the other flank – policies to back creativity and support the bees. At Nesta we’ve shown that business investment in innovation stagnated in the 2000s and then fell sharply (by some £24bn) after the crash. Government investment in R&D has just about been preserved in the UK – but at a level far lower than other developed countries. There have been some modest moves to take on board the agenda I recommended – from public procurement (SBRI) and prizes to innovation in the public sector - but at very modest levels. Nesta is backing dozens of ventures and projects (nearly 200 this year) that point the way to a very different kind of economy: but they are largely invisible in political debate, which still defaults to stale arguments between austerity and stimulus.
The lack of attention to the bees is bound to become a problem for Labour. If it can’t articulate a plausible strategy for growth, it will struggle as the election nears. It’s scoring points on the present, but not setting out much of a vision for the future.
The challenge is shared by the government. The overall economic numbers are bouncing back, after a protracted stagnation. But there’s an odd gap where you might expect the economic vision to be. There’s still too much reliance on simplistic rhetoric, as if just removing barriers to entrepreneurs is, or has ever been, enough to drive growth in an advanced economy.
As a result there’s all to play for, and I’m still waiting for a political party to show that it’s truly grasped how to weaken the locusts and strengthen the bees.