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Quack medicine and British politics

There is a running joke in this household that there are a number of secular texts that I hold to be almost sacred. One is Bad Medicine by Ben Goldacre. Quite often, in the dark hours when the house is quiet and there may be a black dog lurking in the shadows I’ll take my battered, dog eared copy off the shelves and read it the way a religious person might read a genuinely sacred text, using the familiar narrative and parables as guides to my thoughts and practice.

British politics is not so much the last refuge of the quack, the charlatan and the bluffer as their institutional home. Never in the field of human endeavour has so much time and space been given to people who quite often haven’t the slightest clue what they’re on about. I don’t mean this in the pejorative sense, but in the sense that the entire institution is built around a preference for style over substance, for rhetoric over evidence and for theatrical performances over performance management.

Let me give you an example. Unemployment and welfare reform. Ask Ian Duncan Smith if, when claiming that less people are unemployed because of his policies, he has considered the Hawthorne Effect.* You won’t get a straight answer. Not just because Ian Duncan Smith is allergic to the truth, although his CV proves that to be the case, but because he shares, with most British politicians a belief that evidence is hard if not impossible to obtain, and that the answer therefore is to trust a curious mix of gut instinct and fashionable techniques to measure the state of the nation that are of no more proven efficacy than dowsing.

The arguments for cities and high speed transport between them emphasizes this perfectly. The mania for mergers in Britain that began in the 1950s and 1960s, which was based on an assumption that economies of scale would always deliver better shareholder value,wiped out, amongst other things, all the regional banks south of the Scottish Border. Even regional financial services champions, such as Williams and Glyns in the north west, and Yorkshire Bank, were not independent of outside ownership, and the locus of British finance was London, and, to a lesser extent, Edinburgh.

What’s this got to do with quack remedies and politics?Well, the latest quack remedy being offered to Britain’s economic problems is high speed rail. Apparently, we need to spend more on cities because workers there are more productive, and they are centres of wealth generation.

To me, this is based on a simple misunderstanding of where and how value is created in our economy. Ask the Board of Directors of a company, and they will tell you they are the wealth creators, and their work is amply rewarded, usually by higher than average pay rises, by bonuses and by perks that reflect their view of their own status. And how could we prove them wrong?

Let’s imagine a small experiment to test who is most essential to a car making company, the workforce who assemble cars, or the board of directors. Imagine our car factory at eight am on a Monday morning. If the Board of Directors don’t turn up to their offices in London, how many cars will be made? Conversely, if the workforce don’t turn up at the factory, how many cars will be made? The Board even make this point clear for us, by having executive and non-executive directors. Non-executives only turn up to meetings, and do no more work than to offer their opinions. They don’t even need to have relevant qualifications. I have tried offering myself to Nissan as a non-executive engine technician, citing my ability to turn up occasionally and, in return for a fee, to offer unqualified but well-intentioned opinions about engine management system installation. Oddly, they did not return my call.

Much of what is claimed as real profit made by companies headquartered in London, at their London headquarters, is the product not of wealth generation but internal transfer pricing intended to justify the salaries of the managers in the London headquarters. On the basis of that elaborate, but well-remunerated fiction we are all supposed to sign up to another round of disproportionate investment in London’s transport, and to the bizarre, cargo cult fantasies of city leaders in Manchester, Newcastle and all places in between that if only they build something that looks like London’s infrastructure they will reap the same economic benefits as London. This belief has no more evidence than any of the other fashionable ideas, and may even be positively harmful, since the failure to invest in smaller towns and communities may lead to them becoming harder to live in, driving people into cities with their diminished quality of life and housing stock problems.

So next time a guru like Andrew Adonis goes public and says high speed transport is the answer to all our problems, remember the wise words of Edward Deming, the man who popularized the HAwthorne Effect – ‘We call people gurus because charlatan has too many letters’

 

*As a small aside, I stopped and thought about this because of two bits of contradictory evidence. According to government statistics, wages are falling and employment is rising. Now, even in times when there is a large reserve army of labour, the case is usually the opposite, that rising employment leads to rising wages, especially at a time when inflation is endemic, and higher than economic growth. Something is happening that doesn’t quite fit the easy explanations, and in the absence of better evidence, we have to include the Hawthorne effect in our considerations.

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This entry was posted on August 17, 2014 by in Uncategorized.

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