Broadway Market in East London has been celebrating its tenth anniversary. Can there be any better regeneration scheme in the whole of Europe? The market has led to a complete transformation of London Fields in Hackney. It is a thriving neighbourhood of cafes, bars, restaurants, great schools, hipsters, freelancers, and park life. This wasn’t driven by some state backed regeneration scheme. It was a community driven initiative. It wasn’t even about regeneration: it was just about having a decent market in the neighbourhood.
In a compelling account of the historical development of the state, The Fourth Revolution, John Micklethwait and Adrian Wooldridge argue convincingly that the modern state can achieve more by trying to achieve less. There provide a raft of evidence for the expansion of the state and its likely continued expansion given democratic, economic and demographic pressures. That is unless we do something to keep it in check. In their words we are ‘substance abusers’ and we have to admit we have a problem. The substance is Government.
Whilst Micklethwait and Wooldridge adopt a classical liberal view of the state their argument should have force across the political spectrum. Why would the left risk overload and feature bloat any more than the right? The argument made in this book applies whether you have a state that is 20% of GDP or 50%. In fact, the two most compelling case studies in the book are both a low-tax social insurance state, Lee Kuan Yew’s Singapore, and the radically reforming Scandinavian states that combine universal coverage with new modes of choice and diversity of provision.
There are some things the state does well. Just down the road from Broadway Market is the Olympic Park. Only state finance, organisation, security and ability to create collective purpose could have secured such a remarkable Olympic games in 2012. Broadway Market is about providing access to space, a platform, then letting micro-businesses and the community do the rest. Both have worked spectacularly well (and the Olympic Park will be a desirable new set of neighbourhoods in the East End within a short space of time).
Whether you are pursuing good governance driven by a passion for social justice or simply want a more limited state that does what it does well, it would be foolish to ignore the warnings in the Fourth Revolution. The argument that state services can become prey to producer (or even organised consumer!) capture is a critical one. This applies to large contracting-out firms such as Serco as much as it applies to the RMT. New technology affords opportunities to massively increase the personalisation and productivity of public services if properly used. For example, the Montefiore Medical Center in New York has used remote monitors to reduce hospital admissions by more than 30 per cent. This all requires a radical decentralisation of power to users and professionals. It will require large-scale change.
Despite ambivalence towards democracy, The Fourth Revolution, comes down in favour of institutional democracy with embedded checks and balances – rightly. We need external help for our substance addictions. Something that Adam Lent, Hopi Sen and I have called for in the past is an Independent Fiscal Council. This would fit in very neatly with a restructuring of the state along institutional democracy lines. Where we need the state - for example, to construct large-scale infrastructure - we should use it. Where it needs to be limited, for example, deploying a 'night-watchman role’ with regards Broadway Market, then it should be restrained. What is important is that people feel a connection to decisions that are made on their behalf. Democracy in a sound institutional context is the best of both worlds: voice and restraint.
The Fourth Revolution argues for a restoration of the liberal state tradition mixed with structural and democratic reform. However, we do face extremely complex challenges: the environment, low pay, debt, structural inequality of wealth, poor public health, and cultural anxiety (as evidenced by the rise of far Right populism). I’m not sure the liberal state is quite sufficient in the face of these challenges. There needs to be a room for activism where the only solutions are collective ones. This would point towards some blend of reformed institutional democracy and active adaptability. Let’s call it an ‘active Republic’.
To put it a different way, when we need Hobbes reach for Hobbes. When we need J.S.Mill reach for him and Beatrice Webb when her universal solutions are required. In the case of Broadway Market, the local community adopted the approach of Jane Jacobs, the American community-led urban theorist. When it came to the Olympic Park, it was to Ebenezer Howard, the innovator of garden cities, that we turned. Just don’t apply Ebenezer Howard to Jane Jacobs-style problems. So we do have to tame Leviathan but we also need to put it to work more smartly.
Micklethwait and Wooldridge conclude by saying: “The West has been the world’s most creative region because it has repeatedly re-invented the state.” So the future of the state is fundamental to enhancing our power to create. That power in action can be seen in Broadway Market. Happy birthday and here’s to another ten years.
Anthony Painter's latest book is ‘Left without a future? Social Justice in Anxious Times’ .