WEBVTT - The ‘science’ behind economics explains the big problems we face 0:00:00.080 --> 0:00:12.480 Welcome to zero. I am Akshatrati this week rethinking economics. 0:00:16.680 --> 0:00:19.720 As I've watched world events unfold this past year, I've 0:00:19.760 --> 0:00:24.120 been surprised by the many seemingly economically irrational moves at 0:00:24.160 --> 0:00:28.240 governments and investors around the world are making. The prime 0:00:28.280 --> 0:00:31.320 examples are coming from the US with President Donald Trump's 0:00:31.320 --> 0:00:34.960 trade war or attacks on clean energy, but there are 0:00:35.240 --> 0:00:41.280 many others. The incredible valuation of AI companies, Argentina's extreme austerity, 0:00:41.880 --> 0:00:46.159 inclusion of defense companies in ESG funds, the European Unions 0:00:46.200 --> 0:00:49.280 promised to buy seven hundred and fifty billion dollars of 0:00:49.360 --> 0:00:53.680 liquefied natural gas. The list is long. Each of these 0:00:53.720 --> 0:00:56.960 can be explained in different ways. Perhaps it was for 0:00:57.000 --> 0:01:01.160 a political win, or it was an ideological choice, or 0:01:01.280 --> 0:01:04.759 short term thinking, or investments made because of a fear 0:01:04.880 --> 0:01:08.520 of missing out, or some combination. 0:01:08.120 --> 0:01:09.040 Of those excuses. 0:01:10.160 --> 0:01:14.080 But what if the main reason for these irrationalities is 0:01:14.360 --> 0:01:18.560 much deeper. That's what Abbi Inns thinks. She's an associate 0:01:18.600 --> 0:01:21.680 professor of political economy at the London School of Economics, 0:01:22.120 --> 0:01:24.480 and she came to that conclusion while writing her book 0:01:24.880 --> 0:01:29.399 Late Soviet Britain as unlikely as it might seem. Her 0:01:29.400 --> 0:01:32.920 central thesis is that the UK and other capitalist economies 0:01:33.280 --> 0:01:38.360 are behaving like the ineffective, centrally planned Soviet economy. She 0:01:38.560 --> 0:01:41.600 argues that the market driven economic system that was supposed 0:01:41.600 --> 0:01:45.440 to be the antidote to socialism can never deliver on 0:01:45.480 --> 0:01:48.960 its utopian promises. Ever since I finished reading the book 0:01:49.000 --> 0:01:51.480 earlier this summer, I've not been able to stop thinking 0:01:51.480 --> 0:01:54.480 about it. Though the title refers to the problems in 0:01:54.480 --> 0:01:58.400 the UK, the conclusions that Abbi draws are much more 0:01:58.400 --> 0:02:02.640 widely applicable, and she arrives at them after studying more 0:02:02.680 --> 0:02:06.280 than a century of academic work done in economics. The 0:02:06.320 --> 0:02:08.760 book isn't a light read, but I think it is 0:02:08.840 --> 0:02:11.679 a necessary read for anyone trying to make sense of 0:02:11.720 --> 0:02:14.640 the world we find ourselves in. So I wanted to 0:02:14.680 --> 0:02:16.760 ask Abby to lay out the case she makes in 0:02:16.800 --> 0:02:20.680 her book and explain why governments and corporations aren't taking 0:02:20.680 --> 0:02:24.480 the climate threat as seriously as economists think they should. 0:02:27.840 --> 0:02:28.760 Welcome to the show. 0:02:28.639 --> 0:02:31.079 Abby, thank you very much, thanks for asking me. 0:02:31.160 --> 0:02:34.240 So this is a climate podcast, but folks who work 0:02:34.320 --> 0:02:38.280 on the climate challenge will fully recognize that we live 0:02:38.280 --> 0:02:43.359 in a complex highly connected and interdependent world, and in 0:02:43.360 --> 0:02:47.960 that sense, any climate solution will involve not just change 0:02:47.960 --> 0:02:52.359 in technology, but also changes to how government works, finance society. 0:02:53.200 --> 0:02:57.800 And your book is focused mainly on government, but on 0:02:57.840 --> 0:03:02.639 the economy as a whole, has an intriguing title Late 0:03:02.919 --> 0:03:07.880 Soviet Britain. Before we explore the nuances of the work 0:03:07.880 --> 0:03:09.920 that you've done and the research that led you to 0:03:09.919 --> 0:03:13.119 write the book, could you just tell us how you 0:03:13.200 --> 0:03:15.200 started to work on the book at all and what 0:03:15.280 --> 0:03:18.880 did you conclude after working on it for many years. 0:03:18.639 --> 0:03:21.520 Six and a half years, which was quite a lot 0:03:21.560 --> 0:03:23.160 longer than I thought it was going to take when 0:03:23.200 --> 0:03:27.560 I started it. So the reason it's ended up with 0:03:27.639 --> 0:03:32.600 this very counterintuitive title is that when I started working 0:03:32.680 --> 0:03:35.520 on it, which was after Brexit, what I wanted to 0:03:35.560 --> 0:03:40.080 write about was state failure, and so I thought, well, 0:03:40.200 --> 0:03:43.720 I'll begin by looking at the really obvious sort of 0:03:43.760 --> 0:03:46.320 aspects of that. So I thought I'd start with public 0:03:46.320 --> 0:03:50.400 sector outsourcing. So the more I looked into that, looking 0:03:50.480 --> 0:03:55.840 into these contracting failures and enterprise failures, rising costs, declining 0:03:56.040 --> 0:03:58.880 service quality and so on, I started to get this 0:03:59.000 --> 0:04:02.920 very uncap any feeling that it was very familiar, familiar 0:04:03.000 --> 0:04:06.120 to me as someone with a research background in the 0:04:06.160 --> 0:04:10.320 old Soviet space. I thought, well, this is very strange. 0:04:10.640 --> 0:04:14.360 Meant to be the opposites, right, The neo classical economics 0:04:14.400 --> 0:04:17.599 behind neliberalism was meant to be the as it were, 0:04:17.640 --> 0:04:23.120 the scientific economics that was the antidote really to the 0:04:23.200 --> 0:04:26.320 kind of central planning, bureaucracy and rigidity that we knew 0:04:26.320 --> 0:04:31.640 about from the Soviet experience. And then I realized that 0:04:32.120 --> 0:04:34.800 what they held in common was that they were exact 0:04:34.800 --> 0:04:35.600 mirror images. 0:04:36.080 --> 0:04:38.279 So there are beliney of examples, and we'll come to them. 0:04:38.839 --> 0:04:42.279 One that shocked me as somebody coming to this country 0:04:42.320 --> 0:04:47.080 as an immigrant and then learning that the country that 0:04:47.240 --> 0:04:52.479 built the modern sewage system now spilled sewage in UK 0:04:52.680 --> 0:04:56.720 rivers and seas was an interesting experience. But we can 0:04:56.760 --> 0:04:59.800 come to that failure a little later. There is an 0:04:59.800 --> 0:05:04.200 hour respect of our discussion which is focused on politics separately, 0:05:04.560 --> 0:05:09.240 economics separately. They are usually not put together. But your 0:05:09.800 --> 0:05:14.120 area of study is political economy. And you got to 0:05:14.480 --> 0:05:17.640 the conclusions in the book, which you should briefly mention 0:05:18.440 --> 0:05:20.720 through a circuituous route going all the way back to 0:05:20.760 --> 0:05:21.920 the philosophy of science. 0:05:22.279 --> 0:05:23.440 Why was that necessary. 0:05:23.520 --> 0:05:30.400 So what I became really interested in was how two ideologies, 0:05:31.080 --> 0:05:36.400 so neoliberalism in the West and Soviet economics in the East, 0:05:36.800 --> 0:05:41.800 how they could be rooted in such different metaphysics as 0:05:41.800 --> 0:05:45.839 it were, so Soviet economics being rooted in sort of 0:05:45.880 --> 0:05:48.839 Marxists sociology, which was meant to be dynamic and about 0:05:48.920 --> 0:05:54.240 moving classes and dynamic social systems, and the mathematical economics 0:05:54.279 --> 0:05:58.279 known as neoclassical economics, which sits behind most neoliberal policy, 0:05:58.360 --> 0:06:01.400 which is very much more abstract. It exists in a 0:06:01.440 --> 0:06:05.719 world of logical argument from assumption using either mathematics or 0:06:05.920 --> 0:06:11.200 formal logical argument, and modeling and forecasting. It's an attempt 0:06:11.240 --> 0:06:14.960 to build a kind of predictive analytical science. The idea 0:06:15.120 --> 0:06:17.359 being that you could cut out all this sort of 0:06:17.360 --> 0:06:21.320 empirical noise and get to, as it were, the universal 0:06:21.440 --> 0:06:25.240 truths of the economic world. That's the aspiration, and I 0:06:25.240 --> 0:06:29.360 thought to understand this, to understand how they nevertheless end 0:06:29.440 --> 0:06:35.320 up converging on the same state craft of quantification, output planning, 0:06:35.480 --> 0:06:39.680 target setting, measurement, forecasting. All of this, I'm going to 0:06:39.760 --> 0:06:42.359 have to go back to the philosophy of science to 0:06:42.480 --> 0:06:46.320 figure out how they converge, and the point of convergence 0:06:46.680 --> 0:06:52.240 is that when Stalin moves away from long term determinism 0:06:52.440 --> 0:06:54.279 to the idea that you can have a top down, 0:06:54.720 --> 0:07:00.279 almost completely encompassing, central planning system, you suddenly arrive even 0:07:00.320 --> 0:07:05.640 a world of attempting to create a perfect coordinating system, 0:07:05.760 --> 0:07:10.560 a perfect alecative mechanism using planning, and that is the 0:07:10.680 --> 0:07:14.880 exact mirror image of the aspiration behind neoclassical economics. 0:07:15.080 --> 0:07:18.360 How exactly though, because you are still in the Soviet 0:07:18.400 --> 0:07:23.720 system trying to centrally plan for a state that is authoritarian. 0:07:24.040 --> 0:07:24.480 That's right. 0:07:25.000 --> 0:07:28.080 For socialist outcomes, that's right. And on the other hand, 0:07:28.360 --> 0:07:30.760 the system we live in here in the West now, 0:07:31.480 --> 0:07:33.560 which has been in place for a while but has 0:07:33.600 --> 0:07:38.320 been going towards a particular direction, is market oriented democracies 0:07:38.320 --> 0:07:42.600 where people are choosing these leaders, and the leaders are saying, 0:07:42.640 --> 0:07:46.080 we are going to create offers and options for all 0:07:46.120 --> 0:07:49.240 of you in this competitive space that would allow you 0:07:49.280 --> 0:07:52.240 to make the best rational choices you are. They seem opposite, 0:07:52.520 --> 0:07:53.440 and they are opposite. 0:07:53.440 --> 0:07:56.160 That's absolutely right. So the book is a kind of 0:07:56.240 --> 0:08:00.400 dark historical joke in a way, because the argument is 0:08:00.600 --> 0:08:04.160 absolutely not It would be absurd to argue that neoliberalism 0:08:04.240 --> 0:08:10.040 emerged in anything remotely like sort of totalitarian, oppressive, coercive systems, 0:08:10.480 --> 0:08:14.880 whereas the particularly from the Stolenist era onwards, of course, 0:08:14.920 --> 0:08:20.440 that system is a totalizing regime, very explicitly, so it's 0:08:20.520 --> 0:08:25.280 extremely violent, it's extremely coercive throughout that period. But the 0:08:25.280 --> 0:08:27.760 point I want to make in the book is that 0:08:27.800 --> 0:08:35.199 despite being absolute opposite regimes in political form, the way 0:08:35.360 --> 0:08:38.480 they think about the economy, the fact that they think 0:08:38.520 --> 0:08:46.240 about the economy in deterministic machine forms of reasoning means 0:08:46.480 --> 0:08:50.839 ironically that they converge on the same forms of statecraft 0:08:50.880 --> 0:08:57.920 and reasoning about the economy, which is quantification, target setting, calculation, 0:08:58.360 --> 0:09:00.719 risk calculation, the idea that we don't live in a 0:09:01.440 --> 0:09:04.200 uncertain world, but we live in a computable world. And 0:09:04.280 --> 0:09:08.800 also that if you create systems according to this, as 0:09:08.840 --> 0:09:14.120 it were, the science, then enterprises businesses will only behave 0:09:14.200 --> 0:09:18.480 in a rational, socially productive manner. And the irony of 0:09:18.520 --> 0:09:22.920 all of this is that what hyperneoliberal states like the 0:09:23.000 --> 0:09:27.240 UK and the US produce is Soviet state failures in 0:09:27.440 --> 0:09:28.480 capitalist form. 0:09:28.960 --> 0:09:33.400 Late Soviet Britain tells me Soviet Union had problems, especially 0:09:33.480 --> 0:09:36.880 in its late years, because then it went into collapse. 0:09:37.440 --> 0:09:40.040 And if you are after six and a half years, 0:09:40.040 --> 0:09:43.440 concluding this is where Britain is now, you are saying 0:09:43.520 --> 0:09:47.280 we are heading towards collapse. But sure the country has problems, 0:09:47.960 --> 0:09:50.480 but it's also democracy and as far as I know, 0:09:51.400 --> 0:09:53.120 collapse isn't coming. 0:09:53.240 --> 0:09:57.600 I certainly hope collapse isn't coming. Faith in democracy is 0:09:57.760 --> 0:10:01.200 extremely weak at this point. I think it's fair to 0:10:01.200 --> 0:10:03.400 say it's weaker than it has been than at any 0:10:03.440 --> 0:10:08.280 point since the creation of universal suffrage in the UK. 0:10:07.880 --> 0:10:11.199 And it's an important question as to why that is. 0:10:12.200 --> 0:10:14.840 And the argument I make in the book is that 0:10:16.200 --> 0:10:21.079 what has really changed significantly is that the mainstream parties 0:10:21.200 --> 0:10:23.920 in Britain over the last forty five years have all 0:10:24.040 --> 0:10:30.760 more or less adhered to a single economic blueprint. There 0:10:30.760 --> 0:10:34.600 are important differences between labor and the conservatives on that, 0:10:34.679 --> 0:10:39.559 but probably the most important distinction within it is between 0:10:40.360 --> 0:10:44.439 so called Camp one and Camp two, or a first 0:10:44.440 --> 0:10:47.920 burst world or second best world neoclassical economists. And let 0:10:47.920 --> 0:10:51.240 me explain what I mean by that. So, if you're 0:10:51.240 --> 0:10:55.080 in the first best world, those positions tend to assume 0:10:55.280 --> 0:10:58.880 that the more the state withdrawals, the more the market 0:10:59.000 --> 0:11:04.600 is a perfect active mechanism, that individuals within market systems 0:11:04.600 --> 0:11:10.040 are basically rational, that we can navigate our way round 0:11:10.559 --> 0:11:15.719 highly competitive markets, and that this is the supremely efficient 0:11:16.000 --> 0:11:20.360 system of allocation in the world. And historically now that's 0:11:20.559 --> 0:11:24.880 as it were, the radical free market position. Over time, 0:11:24.960 --> 0:11:27.640 it's become an increasingly dogmatic position. 0:11:28.000 --> 0:11:31.400 And that's also from the political perspective. Margaret Thatcher here 0:11:31.400 --> 0:11:34.120 in the UK and Ronald Reagan in the US in 0:11:34.160 --> 0:11:38.480 the nineteen eighties absolutely trying to bring what is labeled 0:11:38.480 --> 0:11:42.360 as neoliberal economics to the political sphere. 0:11:42.400 --> 0:11:46.760 That's right, they're the radicals in neoclassical economics, but the 0:11:46.800 --> 0:11:51.200 mainstream position is not really. The most mainstream economists who 0:11:51.400 --> 0:11:55.560 work in companies and government, treasury and so on, tend 0:11:55.559 --> 0:11:59.720 to be so called second best world economists, and they 0:11:59.880 --> 0:12:03.480 are are more skeptical of the idealized image or even 0:12:03.480 --> 0:12:08.320 the possibility of perfectly efficient markets, perfectly rational individuals. However, 0:12:09.000 --> 0:12:12.280 they maintain the basic methodology, which is the idea that 0:12:12.520 --> 0:12:16.600 using mathematic or modeling and argument from assumption that might 0:12:16.640 --> 0:12:19.920 be formal prose argument or it may actually use mathematics. 0:12:20.080 --> 0:12:25.400 Their assumption is that that methodology is incredibly useful for 0:12:25.480 --> 0:12:28.640 figuring out how markets fail. So what they're interested in 0:12:29.520 --> 0:12:33.160 is using the ideal types, as it were, the perfect markets, 0:12:33.200 --> 0:12:37.360 the perfectly informed individual as a heuristic device as a benchmark, 0:12:37.640 --> 0:12:41.559 so that you can then develop theory of why markets 0:12:41.559 --> 0:12:42.000 will fail. 0:12:42.040 --> 0:12:44.400 In practice, the Tacher era, you get a ton of 0:12:44.440 --> 0:12:47.920 privatization because that's the goal of that station out of 0:12:47.960 --> 0:12:51.280 the way, right, and the water companies are privatized, and 0:12:51.480 --> 0:12:53.720 you know, we know what happened to the sewage problem. 0:12:53.800 --> 0:12:58.120 As a result, railways are privatized. Utilities parts of them 0:12:58.240 --> 0:13:02.680 start to get privatized, the power utilities. Then come the 0:13:02.760 --> 0:13:06.480 labor years and they realize not all of that privatization 0:13:06.760 --> 0:13:09.720 was good, or there are things that the economy hasn't 0:13:09.760 --> 0:13:14.000 been considering, like greenhouse gases. You know, labor in the 0:13:14.080 --> 0:13:17.559 later years puts a price on carbon on coals specifically 0:13:18.000 --> 0:13:23.120 to try and include what later on economists Nicholas turn 0:13:23.360 --> 0:13:26.640 labels the greatest market failure, which is taking greenhouse gas 0:13:26.640 --> 0:13:30.640 emissions outside the economic system, clearly when it has an 0:13:30.640 --> 0:13:32.960 impact on the economic system. So they try and fix 0:13:33.000 --> 0:13:35.520 these market failures. But what you're saying is they're still 0:13:35.800 --> 0:13:41.920 trying to get back to this perfect world of perfect 0:13:42.000 --> 0:13:48.120 rational people operating in a perfect market, and that would 0:13:48.120 --> 0:13:51.600 be better for everybody. So there's really not that much 0:13:51.679 --> 0:13:55.920 difference between the political economy of labor and conservatives over 0:13:55.920 --> 0:13:58.400 the last forty five to fifty years. 0:13:58.679 --> 0:14:03.080 That's very nicely set out. That's exactly right. And the 0:14:03.120 --> 0:14:07.160 point I want to make is that labor and social 0:14:07.160 --> 0:14:09.200 democratic parties more generally. This is true of the New 0:14:09.200 --> 0:14:13.080 Democrats in the US, it's true social democratic parties really 0:14:13.160 --> 0:14:16.320 across Europe and beyond found it very appealing the idea 0:14:16.320 --> 0:14:18.680 that you could have this kind of technical science of 0:14:18.720 --> 0:14:20.480 how you would improve markets, that you would get the 0:14:20.520 --> 0:14:24.480 best of markets and states, that you would use the 0:14:24.640 --> 0:14:28.680 state only in these efficient ways of mending market failures. 0:14:28.720 --> 0:14:31.320 But the point I make in the book is that 0:14:31.320 --> 0:14:35.000 that's a confusion of something that is logically valid with 0:14:35.160 --> 0:14:37.840 something that you can actually reproduce in the social world, 0:14:37.880 --> 0:14:43.440 because the fallacy is that by mending a market failure, 0:14:43.520 --> 0:14:48.920 you're taking society closer towards the efficiency horizon of a 0:14:49.360 --> 0:14:53.640 perfectly complete market or a perfect system of allocation. And 0:14:53.680 --> 0:14:55.320 the point I make in the book is that's the 0:14:55.360 --> 0:14:59.560 Soviet fallacy too. It's the high modernist fallacy that we 0:14:59.600 --> 0:15:04.640 live in a computable world and perfect efficiency is humanly possible. 0:15:04.720 --> 0:15:06.600 If we get all the information, we'll make the right 0:15:06.640 --> 0:15:10.080 decisions as a result. So talk me through a failure 0:15:10.160 --> 0:15:14.720 that may explain it. The water utilities here have been privatized. 0:15:15.120 --> 0:15:18.160 They have been pretty profitable for the shareholders who then 0:15:18.200 --> 0:15:22.080 took on the ownership of these utilities. Add the cost 0:15:22.240 --> 0:15:25.760 clearly of service to people because we have sewage in 0:15:25.800 --> 0:15:28.640 freshwaters and we have a ton of leaks of fresh 0:15:28.720 --> 0:15:31.720 water into the pipe system which has been been fixed. 0:15:32.680 --> 0:15:38.200 How exactly to camp one Camp two thinking lead to 0:15:38.280 --> 0:15:40.960 a corporation a public good that has to be a 0:15:41.000 --> 0:15:43.960 regulated monopoly if it has to be privately owned or 0:15:44.200 --> 0:15:46.840 just a state owned company, because you can never have 0:15:46.960 --> 0:15:48.320 competition there happen. 0:15:49.160 --> 0:15:54.480 So the sort of idealized version is that markets are 0:15:54.520 --> 0:15:59.560 always functionally and morally superior to the state because instead 0:15:59.640 --> 0:16:02.160 of having the fear being that you would have this 0:16:02.240 --> 0:16:06.240 kind of monopoly state that would set prices for a 0:16:06.320 --> 0:16:09.840 nationalized water system that it would probably overinvest, that it 0:16:09.880 --> 0:16:13.160 would be this kind of misallocation of resources that a 0:16:13.360 --> 0:16:18.120 market system of supply and demand would somehow resolve in 0:16:18.160 --> 0:16:22.520 a more efficient way, so the assumption being that market 0:16:22.520 --> 0:16:27.320 provision will somehow be more alecatively efficient. The trouble with 0:16:27.440 --> 0:16:30.800 things like water and natural resources like that is that 0:16:30.840 --> 0:16:34.720 they are natural monopolies in terms of provision and supply 0:16:34.920 --> 0:16:36.720 and the networks that go with it, and so on 0:16:36.720 --> 0:16:42.080 and so forth. But the issue was also that the 0:16:42.160 --> 0:16:47.600 assumption is that firms of all sizes are as it 0:16:47.600 --> 0:16:52.600 were productive stewards of the real economy, so that even 0:16:52.600 --> 0:16:56.880 if you had a monopoly firm, the discipline of its 0:16:56.920 --> 0:17:01.160 wider participation in markets would lead it to invest in 0:17:01.200 --> 0:17:04.480 a rational way for the long term. This isn't something 0:17:04.520 --> 0:17:09.000 that's very easy to describe within neoclassical modeling. So the 0:17:09.080 --> 0:17:12.480 short termism of shareholders and the idea that they don't, 0:17:13.640 --> 0:17:17.840 as it were, think in universal welfare improving terms when 0:17:17.840 --> 0:17:20.879 they think about returns is something that seems to have 0:17:20.920 --> 0:17:23.400 been missed. But it's been a fairly fatal mistake for us. 0:17:23.480 --> 0:17:27.960 So it's a government failure here. What could the government 0:17:28.000 --> 0:17:30.879 have done differently to actually make it work? 0:17:31.240 --> 0:17:33.440 So this brings us to the second best world right 0:17:33.560 --> 0:17:39.199 where these kind of contractual failures or regulatory failures. The 0:17:39.240 --> 0:17:41.920 assumption is that there must be something in the incentive 0:17:41.920 --> 0:17:46.840 framework that is inadequate, so you correct the incentive framework. 0:17:47.640 --> 0:17:50.600 And that's logical, that makes perfect intuitive sense. So you 0:17:50.680 --> 0:17:54.800 try and do that. You create targets, or you create 0:17:54.880 --> 0:17:59.520 certain incentives or even disincentives, so you have the threat 0:17:59.520 --> 0:18:03.359 of five means for example, or you demand more information. 0:18:03.560 --> 0:18:05.159 There are all kinds of things you can do to 0:18:05.240 --> 0:18:08.879 try and sort of correct the framework. What neoclassical models 0:18:08.920 --> 0:18:12.159 of that cannot begin to describe, though, is the power 0:18:12.200 --> 0:18:17.280 relationship between a monopoly provider and a government who will 0:18:17.320 --> 0:18:23.159 be held ultimately legally, fiscally and politically liable for the 0:18:23.240 --> 0:18:27.199 non delivery of that service. So what we see in 0:18:27.359 --> 0:18:32.080 real historical time is that the British government tries to 0:18:32.119 --> 0:18:37.080 exert a fine and the regulator makes kind of rude 0:18:37.080 --> 0:18:39.840 noises to the company, and the company says, well, we 0:18:40.680 --> 0:18:44.440 realize we've miscalculated in some way and we would pay 0:18:44.440 --> 0:18:47.960 the fine, but that would rebound on higher bills or 0:18:48.119 --> 0:18:53.040 it will restrict our capacity to invest. And it's the 0:18:53.119 --> 0:18:55.800 investment famine that's been so damaging over time to the 0:18:55.880 --> 0:18:58.560 nature of the fundamental assets like the non building of 0:18:58.600 --> 0:19:01.520 reservoirs in the UK case. So government tends to retreat 0:19:02.400 --> 0:19:06.680 because it is caught between a rock and a hard place. 0:19:07.000 --> 0:19:10.159 But is there something that you see or something that 0:19:10.200 --> 0:19:12.160 you can see in history in the late Soviet Union 0:19:12.440 --> 0:19:14.560 that you are seeing in today's Britain. 0:19:15.000 --> 0:19:22.000 Yeah. I think there are concentrated corporate interests as they 0:19:22.000 --> 0:19:24.680 were in the old enterprise planning system of the Soviet Union, 0:19:24.720 --> 0:19:26.919 that kind of military industrial complex if you like, of 0:19:26.960 --> 0:19:30.720 the Soviet system. But I guess the British system would 0:19:30.760 --> 0:19:34.600 be a mix of, as it were, the least socially 0:19:35.440 --> 0:19:42.080 constructive corporate, financial and fossil fuel interests who are absolutely reactionary, 0:19:42.880 --> 0:19:48.399 who would rather dig in politically, even if it means 0:19:48.800 --> 0:19:52.879 the overthrow British democracy. That like corporate interests and fossil 0:19:52.880 --> 0:19:57.080 fuel interests supporting Trump in the US, they would rather 0:19:57.240 --> 0:20:02.840 back an authoritarian to sustain their economic and financial privileges. 0:20:03.640 --> 0:20:10.040 Then admit that those privileges have occurred at the exclusion 0:20:10.160 --> 0:20:15.480 of social cohesion and a sustainable form of economic development, 0:20:15.840 --> 0:20:19.919 and it's time that they were readjusted and changed and 0:20:20.040 --> 0:20:21.360 effectively broken up. 0:20:21.680 --> 0:20:26.120 It leads to frustration among the public and a desire 0:20:26.160 --> 0:20:29.560 for a solution, and the rise of populism. There is 0:20:29.680 --> 0:20:32.720 Farage in the UK, Trump in the US, Maloney in Italy, 0:20:32.880 --> 0:20:37.719 More in India, Aduan in Turkey. Why is it that 0:20:37.760 --> 0:20:41.720 their message lands so well? Why is it right wing 0:20:41.760 --> 0:20:45.960 populace and not so much lefting populist who get their 0:20:45.960 --> 0:20:48.679 message out? Why isn't there like a climate populist. 0:20:49.080 --> 0:20:53.399 Well, there's again a slightly horrifying analogy with the Soviet system. 0:20:53.560 --> 0:20:56.119 In the Soviet system, you had decades of trying to 0:20:56.160 --> 0:21:00.240 mobilize people according to Marxist Leninist economic promises right that 0:21:00.359 --> 0:21:04.080 in the Soviet space, economies would become more and more wealthy, 0:21:04.200 --> 0:21:09.320 more and more and more fraternal, and ultimately the state 0:21:09.359 --> 0:21:12.439 would wither away and lead to communism, which was like 0:21:12.520 --> 0:21:17.760 an Edenic condition of a spontaneously for eternal and equal 0:21:17.840 --> 0:21:22.280 and fair and just and happy society. Right, The thatch 0:21:22.359 --> 0:21:25.680 right promise is never that extreme, but it is a 0:21:25.720 --> 0:21:29.600 promise of the Reagan and the Thatcher revolutions that by 0:21:30.600 --> 0:21:34.439 removing the states, not completely, but by rolling back the 0:21:34.480 --> 0:21:38.920 post war state, by rolling back social democratic values, that 0:21:39.000 --> 0:21:44.000 all boats would rise on a rising tide continuously and 0:21:44.119 --> 0:21:47.719 so we had decades of great economic optimism, but then 0:21:47.720 --> 0:21:51.200 you get the global financial crisis, which is pretty cataclysmic 0:21:51.240 --> 0:21:54.080 in terms of the legitimacy and credibility of this system. 0:21:54.880 --> 0:21:59.920 And that creates a pretty fundamental problem for neoliberal political 0:21:59.840 --> 0:22:03.560 parties after the global financial crisis, which is, how do 0:22:03.640 --> 0:22:08.439 you continue to legitimize a materialist utopia in non economic terms? 0:22:08.760 --> 0:22:11.280 So you do what the Soviets did, and what the 0:22:11.320 --> 0:22:14.240 Soviets did in the nineteen eighties was increasingly moved to 0:22:14.400 --> 0:22:20.159 nationalist forms of mobilization and racism, so ethnic mobilizations, ethno 0:22:20.240 --> 0:22:25.240 nationalist mobilizations, and that's what you're also seeing on the 0:22:26.119 --> 0:22:29.879 neoliberal right. It's what happened to the Republican Party in 0:22:29.920 --> 0:22:33.159 the US, it's what happened to the Conservative Party. And 0:22:33.760 --> 0:22:36.719 I think part of the appeal of ethno nationalist and 0:22:36.800 --> 0:22:41.760 racist politics for political parties that don't want to change 0:22:41.760 --> 0:22:48.359 the economic paradigm fundamentally is you can make huge expansive promises. 0:22:48.720 --> 0:22:53.359 You can, as it were, create combat tasks that replace 0:22:53.440 --> 0:22:57.439 the old economic combat tasks. You can create enemies foreign 0:22:57.440 --> 0:23:00.959 and domestic. You can mobilize people, you can divide your societies. 0:23:01.000 --> 0:23:04.040 It's a wedge issue. And you can do all of 0:23:04.040 --> 0:23:07.800 this without making a lot of economic promises except that 0:23:08.080 --> 0:23:12.560 things will get better because instead of dealing in an 0:23:12.600 --> 0:23:15.920 honest way about the failures of the economic paradigm of 0:23:15.960 --> 0:23:19.639 the last forty five years, it's how much easier to 0:23:19.720 --> 0:23:27.040 blame it on immigrants or excessive immigration, to resurrect great 0:23:27.040 --> 0:23:29.600 task historic injustices like the. 0:23:29.760 --> 0:23:31.359 Or net zero by twenty fifty. 0:23:31.800 --> 0:23:34.639 This is fascinating to me that net zero instead of 0:23:34.680 --> 0:23:37.919 taking the science seriously as natural science, but because it 0:23:37.960 --> 0:23:41.560 had become infected by socialism, right, that socialism had killed 0:23:41.600 --> 0:23:45.239 the entrepreneurial spirit of the West. That's the argument, and 0:23:45.320 --> 0:23:48.119 the net zero a socialism argument is a kind of 0:23:48.200 --> 0:23:53.680 recalibrated version of that. So it's not that there's an objective, 0:23:54.280 --> 0:23:58.960 empirically verifiable reason to be pretty critical about our current 0:23:59.040 --> 0:24:03.440 economic status. So no, it's a socialist conspiracy. So zero 0:24:04.359 --> 0:24:08.800 is particulated by right wing interests who wish to preserve 0:24:08.920 --> 0:24:12.240 the privileges that they've gained, particularly obviously sort of carbon 0:24:12.400 --> 0:24:16.520 fossil fuel interests wish to maintain subsidy and privilege and 0:24:16.560 --> 0:24:21.000 so on. To reconstitute that argument that this isn't you 0:24:21.119 --> 0:24:24.760 know this science is this is just socialism under a cloak. 0:24:30.280 --> 0:24:32.680 Join us after the break for more of my conversation 0:24:32.960 --> 0:24:37.320 with Professor Abby Innes, author of Late Soviet Britain. Thank 0:24:37.359 --> 0:24:39.920 you to everyone who has written a review of Zero recently. 0:24:40.280 --> 0:24:43.960 We appreciate all of them and please keep them coming. Recently, 0:24:44.000 --> 0:24:48.840 Sheila wrote Zero's crystal clear reporting presented with reflection and serenity, 0:24:49.280 --> 0:24:52.040 must be the best climate crisis information available. 0:24:52.480 --> 0:25:04.639 Thank you, Sheila. 0:25:06.040 --> 0:25:08.679 In the Climate Circles, one diagnosis of the problem that 0:25:08.720 --> 0:25:13.160 has gained traction recently is that governments, whether left or right, 0:25:13.560 --> 0:25:19.719 have made it harder to build things. Infrastructure everywhere is creaking. Yeah, 0:25:19.800 --> 0:25:23.159 it's private companies sometimes that are actually responsible for that infrastructure, 0:25:23.200 --> 0:25:26.639 like the sewage system here, but it's really governments and 0:25:26.680 --> 0:25:33.320 their overburdened regulation that has made it obstructionist rather than 0:25:34.000 --> 0:25:37.600 rules that came from the right place. At one point, 0:25:38.400 --> 0:25:42.879 this is broadly called the abundance agenda, taken off in 0:25:42.920 --> 0:25:45.960 the US a lot, and the solution is, if only 0:25:46.040 --> 0:25:48.960 there were fewer regulations in place, we will all have 0:25:49.080 --> 0:25:53.360 clean energy, healthy world that we all want to live in. 0:25:53.960 --> 0:25:56.879 And the left could actually deliver on the promises that 0:25:56.920 --> 0:26:00.760 the left has made for decades. Now make it concrete. 0:26:00.800 --> 0:26:04.560 From a climate perspective, it's the idea that even though 0:26:04.920 --> 0:26:08.960 Joe Biden signed what was the US's biggest climate bill, 0:26:09.400 --> 0:26:12.199 the Inflation Reduction Act, in twenty twenty two, by the 0:26:12.240 --> 0:26:15.600 time the twenty twenty four election rolls around, very little 0:26:15.600 --> 0:26:18.720 has been built, not much of the money has been spent. 0:26:19.040 --> 0:26:23.720 People haven't seen the benefits. So no wonder Trump gets elected. 0:26:24.080 --> 0:26:26.840 Do you think that diagnosis of the malays is right? 0:26:26.920 --> 0:26:29.280 It's a great question. I think I'd adjust it slightly, 0:26:29.320 --> 0:26:34.399 which is, we have to ask where the regulatory brittleness 0:26:34.480 --> 0:26:38.280 and complexity came from. And again it's one of the 0:26:38.400 --> 0:26:43.720 points of Soviet analogy. So what Soviets and neoliberals both 0:26:43.800 --> 0:26:47.240 do is try and set up their idealized system of coordination, 0:26:47.920 --> 0:26:51.240 whether it's the state and command planning in the Soviet 0:26:51.280 --> 0:26:55.840 system where it's via increasing market power. But what happens 0:26:55.880 --> 0:26:59.400