The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [124]
In fact, the loss of trust and the impact of information and communication technologies have caused upheaval in all kinds of organizations in the modern economy, including companies. Some aspects of this are matters for the companies and their shareholders: if they are not as productive as their competitors, there is no wider social issue. Other aspects are matters of public concern, however. In particular, the drive to increase in size in order to take advantage of economies of scale is an issue. There has been a sharp divide among experts on competition policy between those who think that it’s good for consumers that Microsoft is so big, because this means lower prices and the benefits of network effects, and those who think it’s bad for consumers because it hasn’t been possible for new or better operating systems and browsers to serve more consumers.26
There are merits in both sets of arguments. As someone who was a UK competition regulator for eight years in the 2000s, I’ve come to the conclusion that too many companies are simply too big and too similar. Innovation is being stifled. More important, there is a concentration of power in the hands of some big companies. The wider point here is that governance is a central issue in every quarter of the economy. Institutions of all kinds need reshaping if the challenges of Enough set out in the first half of this book are to be tackled.
PUBLIC VALUES AND PUBLIC DELIBERATION
The scale of the problems facing Western societies now is so great that addressing them has to be a shared effort with shared values and ambitions. After the period of the 1990s and 2000s, when politicians and voters broadly accepted that economic growth was the top policy priority and the domain of markets in the way the economy is organized should expand, the pendulum has swung firmly in the opposite direction. But voters will still expect their elected representatives to deliver economic growth. What’s more, the dire situation of most government budgets and the size of the debt burden mean that strong growth is an essential.
This burden will also call into question the assumption of ever-increasing entitlement, especially in societies as diverse and lacking in cohesion as the United States and United Kingdom. Governments will have to cut spending, not increase it. Yet, as we saw in chapter 3, as incomes grow, people’s demand for the kinds of services that are often paid for through taxes, such as education and old age care, will steadily rise. It is difficult to know how these pressures will alter the landscape of political choice. But whatever happens, the issue of how good a job governments do will be under the spotlight. The financial crisis made everyone very aware of the scope for markets to fail. We will soon be reminded about how much scope there is for governments to fail too.
Figure 17. Public space in the ancient agora.
Navigating through the multiple pressures of the years ahead is going to require debate about collective values. This has an old fashioned flavor, after decades in which the dimension of political debate was whether the state or markets were the best way to organize society. I think it is now clear that the “either-or” debate, corresponding to the old left-right divide in politics, is inadequate. States and markets need each other in order to be effective. Managerialism is not an adequate substitute, however. Although complicated modern societies do present many technical problems needing technocrats to solve them, benign experts cannot make the deeper choices involved in social welfare decisions. Also needed is a process of public debate about our underlying values, a forum for reaching something like a consensus about difficult choices—as in the idealized public space of ancient Greece.
There has been an active debate in political science about the scope new technologies offer for citizens to engage in decision-making. The possibilities canvassed range from specific deliberations about particular questions, citizens’ juries, to the mass online organization