Commentary on Political Economy

Wednesday 20 March 2024


 The era of the unfixable problem Janan Ganesh · Mar 20, 2024

The Urban Development Corporations. The Regional Development Agencies. The Local Enterprise Partnerships. Then, in the last decade, as merciful relief from this grinding, almost Soviet language: the “Northern Powerhouse”.

Whatever they called it, every British government in my lifetime has built an empire of high-powered quangos to revive the deindustrialised regions. Each has assigned a person of clout — a deputy prime minister in John Prescott, a chancellor of the exchequer in George Osborne, the elemental force that was prime-age Michael Heseltine — to lead the mission. And still, in 2024, if you want some dirt-cheap applause, just accuse politicians of “ignoring” people outside London and its halo of commuter counties.

How does this lie about the political class manage to live on? Because the alternative is too painful to countenance. The alternative is accepting that the problem of left-behind regions might have no solution. That is, the state, though it should never stop trying, can only do so much against foreign wage competition, technological automation and the other global forces that have eroded a certain kind of blue-collar community.

The project to “level up” the UK regions is going to flop, again. But it does serve as a parable for something wider in the world.

This is the era of the insoluble problem. Consider the baby bust. Birth rates in rich countries are too low to maintain populations at their current level. You needn’t take a Muskian view of this trend (“a much bigger risk to civilisation than global warming”) to want to change it. How, though? If subsidised childcare and other pronatalist policies made a difference, Nordic nations would be ultra-fertile. As it is, Sweden and Denmark have the same birth rate as the US. Governments could offer unprecedented cash incentives to procreate, but at huge upfront fiscal cost, and the pique of non-parents. Which leaves the state with what policy instrument? Moral exhortation?

At some point, the childless or onechild trend has to be seen for what it is: a byproduct of affluence and secularisation. Undoing these things, even if we were minded to, would require a bizarre kind of government.

And even this isn’t the ultimate case of an insoluble problem in the modern world. No, that plays out every day along the southern US border and on Mediterranean shorelines. It is impossible, politically if not physically, for America or Europe to accept all, or most, or even a large percentage of the people who seek refuge there. At the same time, it is unconscionable to leave them in poverty, in catastrophic climates or in bandit-ravaged failed states.

And so we have the purest example of an intractable situation in the world today. Mock, if you wish, the UK’s plan to send asylum seekers to Rwanda. But alternative ideas seem to range from the hopelessly small-time (such as processing asylum claims quicker, as though that answers the problem of demand) to pie in the sky stuff about investing in the Sahel to reduce incentives to leave it. The ultimate source of refugee flows isn’t this or that western misjudgment but tectonic stuff: the geographic proximity of rich places to poor ones, and the fact that Africa is bucking the worldwide decline in birth rates.

There are such things as intractable problems. There is such a thing as rational despair. Saying so marks one out as callous. But not saying so, pretending that all questions have answers, is worse, because if a problem persists, it must mean that politicians are incompetent or don’t care. From an essentially positive premise — that nothing is beyond human ingenuity — we arrive at a cynical and acrimonious atmosphere.

I am well-located to understand that sometimes there is no good move. With high public debt, the UK can’t make big net tax cuts or borrow much more. With a high tax burden, it can’t raise taxes to improve public services without compromising incentives and animal spirits in business. Brexit has turned out to be a giant clucking turkey of an idea (32 per cent of voters now think it was right to leave the EU) but there is little stomach for the national rancour involved in trying to undo it anytime soon.

Is there a high-income country on Earth that is so exquisitely checkmated? I can’t think of one. But this does make Britain a good place from which to observe a fact of world relevance. Some problems can’t be solved, just mitigated at the edges. Pretending otherwise isn’t “optimistic” or enlightened, it is poisonous to a nation’s civic health. Oh, for more of the can’t-do spirit.

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