Managing the process of globalisation requires that those who gain from it compensate those who lose. Otherwise we risk not only the rise of protectionism but a loss of social cohesion: both these problems are already evident.
Dear David Cameron,
Your suggestion, as leader of Britain’s Conservatives, that your party should be concerned with general well-being, not gross domestic product, has received a mixed reception. You did yourself no favours by singling out, as an exemplar of the new capitalism, a company that sells £30 T-shirts bearing environmentalist slogans – you need to attract voters who buy three T-shirts from Shanghai for £5 at Matalan. But you have identified an important theme. Here are some suggestions for your next speech.
You might emphasise work-life balance. The main reason economic growth has been slower in Europe than in the US is that in Europe the amount of work done has been falling. Some of this is the result of youth unemployment, which is Europe’s central economic problem: a key component of well-being is having a job when you want one. But most of the transatlantic difference results from shorter working weeks, longer holidays and earlier retirement. In choosing leisure over goods, they choose family well-being over economic growth.
Well-being would be enhanced further if the work itself were more enjoyable. Satisfying employment is based on pride in what you do and autonomy in the workplace. The last Conservative government, which encouraged the belief that the value of an activity was defined in money terms, did much to erode pride; this Labour government, with its emphasis on targets and central monitoring, has done much to erode autonomy.
Autonomy, in the sense of feeling that one has control over one’s own life, is a key component of well-being: people are happiest when they succeed in difficult tasks they have set for themselves. Such freedom is not quite the same as the freedom to choose that comes from being able to buy 50 brands of shampoo. You should emphasise that economic growth in advanced economies is mainly about the quality, not the quantity, of what we consume.
Once basic requirements of food, clothing and shelter have been met – and for most people in Britain they have been – becoming richer means better food, better clothes and better housing, rather than more food, more clothes and more houses. That is why obesity is a problem for the poor rather than the rich, why Marks and Spencer has been forced to revamp its dowdy ranges and why prices of well- located properties continue to spiral.
Well-being also depends on relationships at home and at work: on relative as well as absolute standards of living and on mental health. Government cannot be a principal actor in promoting any of these things, but there is plenty it can do from the wings.
Economic and physical security are key components of well-being. People are constantly told that the economy can no longer afford to provide the economic security to which they have been accustomed. This is dangerous nonsense. Globalisation yields large net benefits, both for the world economy and for individual countries. But managing the process of globalisation requires that those who gain from it compensate those who lose. Without such willingness to share, we risk not only the rise of protectionism but a loss of social cohesion. Both these problems are already evident.
After 10 years in office, New Labour is still struggling to come to terms with capitalism. Tony Blair’s fading authority as prime minister is at last focused on introducing disciplined pluralism in public services, but those Old Labour factions that still believe the answer to economic and social problems is to be found in central direction and political control are gaining strength and influence. Since no one can doubt your fundamental commitment to a market economy, you are the British politician best placed to explain how market forces necessarily operate within a social context. If you can do this, you can determine an economic and political agenda for Europe for a generation. Yours sincerely John Kay