Adair Turner is being provocative again. Almost a decade ago now he scandalised bankers and traders (although not the general public) when he declared the work of financiers to be “socially useless”.
A few years ago he made himself almost equally unpopular in central banking circles by suggesting they should consider monetising debt to rebalance their economies.
And now Baron Turner of Ecchinswell’s latest thesis is that politicians, everyone from the Chancellor Philip Hammond down, are talking rubbish about productivity.
“What every politician always agrees is that the crucial thing we need to do is speed up the rate of productivity growth – every politician’s wrong!” the silver-haired 63-year-old declaims in an interview with The Independent.
Turner, whose technocratic career has taken him from the CBI, to the Climate Change Commission, to a major government review of pensions, to the chair of the Financial Services Authority, is now chair of George Soros’ Institute for New Economic Thinking. And the economic thinking he’s doing is certainly “new”. Downright heretical, many would say.
So what’s led him to this radical conclusion that we should stop obsessing about productivity growth? The answer is twofold.
First, he suspects automation is happening quicker than is being picked up by our official GDP statistics. Second, he thinks lots of the new service jobs being created as the mechanisable parts of the economy become more efficient are inherently “zero sum”, meaning they are competing for existing wealth rather than creating it.
He gives an example of street sweepers and lawyers: “If we manage to create a totally effective automated street sweeping machine, nobody would have a job as a street sweeper. But if we apply IT to the limit to law, there’ll still be lawyers. It’s just that each of these two highly paid lawyers will now have software that review not simply many cases, but every single case that there’s ever been.
“What do lawyers do? They fight against each other. If you make lawyer A and lawyer B both much more skilled than they were before, you can’t say there’ll be a better product, there’ll just be a more intense fight.”
He thinks that focusing on productivity growth in this context will not help to deliver a higher quality of living for most people. Indeed, he fears it could actually end up harming living standards, citing the example of those who provide social care for the frail elderly.
“What do we do with those jobs at the moment? We reduce their status and their cost. We put them up for competitive bidding. And we bid down the price. And then we do these gig economy games where people being paid to do social care of the elderly aren’t even employed for movement between client one and client two; we say you’re only working when you’re at the client. Then we tailorise their life. We say ‘you’ve got 14 minutes to clean someone’s bottom’…”
The solution, Turner says, banging the desk of his Mayfair office for emphasis, is simply to stop focusing on the bottom line.
“We’ve just got to pay more for social care – we’ve just got to make something which is valued. We’ve got to pay higher taxes to afford it. They’re never going to be high-paid jobs, but we should not be using the techniques of the market to skinny them down.”
He concedes the macroeconomics of his argument, laid out in an extensive lecture in the US earlier this year, is unproven. There are certainly many theoretical and empirical challenges that could be mounted. He also accepts that his thesis – saying we should focus more on distributing the GDP pie than making it bigger – will not be easily swallowed by policymaking classes.
“Ten years ago I said precisely the opposite,” he smiles. “That’s undoubtedly [not] what I would have said when I was director of the CBI. I’m still cautious about leaping to that. But sometimes a useful role in public debate is to throw something deliberately provocative into the pond!”
Turner advises a start-up online bank – OakNorth – which he says has influenced his views on the rapid underlying speed of job-shedding automation.
As chair of a group called Energy Transitions Commission (ETC), made up of public and private sector experts and executives, he’s also advising governments in China and India on decarbonisation.
Despite Donald Trump’s withdrawal of the US from the Paris accord, Turner insists he’s relatively hopefully about the prospects of cracking the problem of a rapidly overheating planet.
“We’re optimistic that there are bits of Indian policy that are heading in the right direction,” he says. “I’m optimistic that China gets it, that they are determined eventually to bring down their emissions, that they’ll develop renewables on a massive scale, that they’ll electrify their bus fleets, etc.
“The thing that frustrates me about climate change is that we could get to 2060 and we could have a pretty close to zero carbon economy. Run the numbers and it’s completely doable by technologies that we know how to do. It is soluble if we just get on with it.”
But what’s lacking from Turner’s employment portfolio is a major, high-profile, public sector job in the UK. Jeremy Corbyn’s Labour seems an obvious fit. They could use someone with Turner’s economic and establishment credentials.
And it turns out there has been some contact. On 19 May (the same day as Harry and Meghan’s wedding) Turner was to be found addressing Labour’s macroeconomic conference.
But could he work with a party of politicians who many in the business world regard as unreconstructed Marxists, a bigger threat to the economy even than Brexit?
“The answer is I’d have to spend a bit more time,” he says, judiciously. “There are some things about some of the people around them of which I am suspicious. There seem to be some people around them who genuinely do believe that Venezuela is a well-run country. You cannot believe that and be sensible. Venezuela is a disaster and it has been destroyed by a left-wing Marxist government that had oodles of oil revenues. You’ve got to say the way that the world is.”
But he’s certainly not shutting the door.
“There are things that make me wary of that tradition on the left which can see no problems with left-wing governments. On the other hand, there are other aspects of what they are saying that do not seem all that extreme or worrying.”
The supreme British establishment technocrat taking a job with a radical left Labour team? That could be a Turner provocation to put all his others in the shade.
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