Meet the new world, same as the old world (only a bit meaner and poorer)?


Four years ago, as the scale of economic downturn and the probable depth and longevity of austerity hit home, there was much speculation about whether this would have a profound impact on key aspects of society: expectations, values, forms of organisation and provision.

There was a widespread view that after the excesses of the nineties and early noughties, a harsher environment might be good for us. Some on the left hoped for a turn against consumerism and the excesses of the wealthy, some on the right for a more active civil society taking the initiative from a shrinking state. There was much talk of a new economy. Peter Mandelson spoke of ‘less financial engineering more real engineering’, business gurus opined that recession is the midwife of innovation. Everyone’s favourite quote was Rahm Emanuel’s ‘never let a crisis go to waste’.

How do things look now as the economy splutters like smouldering wet twigs and austerity is trudging uphill through mud with the mountain peak lost in dark clouds? Here are the key points:

As a society we seem to have become harsher towards each other, we are less sympathetic to the poor, we continue to be obsessed by, and negative towards, immigration. It is true that we have also become intolerant of excess at the top but this is driven more by self-righteous rage than a commitment to greater social fairness.

In terms of austerity, the economic downturn means the state isn’t actually getting significantly smaller as a proportion of the economy. Even now, we are only in the early stages of the full impact of cuts in funding for services and it looks as though many public agencies have been able to preserve most services by being more focussed and efficient. Also, important parts of provision – especially schools and the NHS - are still being protected. But despite all this there are two significant and accelerating shifts. First, forms of public provision deemed to be non-essential are starting to decline and - in some areas - disappear, this includes the youth service, arts provision, libraries and leisure services and various forms of community provision. Second, significant parts of public sector provision – from employment services to health care – are being transferred to the private (and to a much lesser extent) third sector; the announcement today about probation is another important step in this process. So, while large scale examples of civil society stepping up to fill the gaps left by a retreating state or of bold innovations in service configuration (the hopes that some people had three years ago) are few and far between, more conventional expectations of cuts and contracting out are being fulfilled. Given the paucity of evidence that contacting out leads to service improvement or innovation, the public sector is getting leaner but will it be fitter?

In relation to alternative values I can see little or no sign of a shift. Indeed, opinion polls suggest concern about the environment (climate change in particular), which is often seen as the alternative pole to consumerism, has declined in the face of economic concerns. Consumer debt may be shrinking and growth in the consumption of ‘stuff’ may have stalled but this is the consequence of economic necessity not post-materialism.

As for a new economy, it is encouraging that more people want to set up their own business (although probably more are doing so as a last resort), and in a large economy there are always success stories to celebrate. But, as the Government’s frantic search for growth and its gradual reversion to a strategy of restoring state-financed or underwritten capital investment shows, there is little sign of a new ‘real ‘ economy butterfly emerging from the rotting chrysalis of the old debt-fuelled, finance dominated model.

So, two questions: first, am I missing something? Is there a pattern of change out there but I am failing to join up the dots? Second, if there isn’t any change, or any positive change, why not? Is it just too soon to see the adaptation we need?

Were the hopes that our self-inflicted misfortunes would prompt soul searching and a collective stepping up to the plate always misplaced? Would we all just love to go back to the good old days of buying piles of junk, maxing out on credit cards, being made rich by house inflation and reading assiduously (but not resentfully) about the excesses of billionaires and celebrities?

Or has the possibility of new ways of living and thinking been stymied by a lack of leadership; a Tory Party obsessed by its eccentric enemies to the right, a Labour party happy to appeal to its core and rely on negative voting and Lib Dems plesed just to survive?

The core of the RSA’s modern mission (echoing a theme running through its history) is the belief that we need, and that we can achieve, a step change in human capability. This distinguishes us from a paternalistic left which tends to think the problem is not people but the structures in which they live and an economically liberal right which is agnostic about human development, relying on the hidden hand of the market to drive innovation and turn random individual preferences into progress.

I still think the Society’s modern mission is particularly suited to these challenging times, but sometimes, on the bad days, I wonder whether it is a triumph of hope over expectation.

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