32 Britain The Economist October 9th 2021
Toilingtowards the sunlit uplands
J
oseph schumpeter, one of the 20th century’s greatest econo
mists, argued that capitalism is shaped by two countervailing
forces: creative destruction and popular resentment. Creative de
struction drives economic progress but also whips up resistance
by destroying old ways of doing things and creating giant for
tunes. The historical role of the right is to promote the destruc
tion; that of the left is to mobilise resentment. Schumpeter
thought that the left would win in the end. “Can capitalism sur
vive?” he asked himself glumly. “I don’t think it can.”
Schumpeter reckoned without the Conservative Party’s shape
shifting powers. In the 1980s Margaret Thatcher turned it into the
party of creative destruction. Boris Johnson rode into power on re
sentment against globalisation and technological change, win
ning first an intraparty power struggle over Brexit and then a gen
eral election. Conservative mps now represent parts of northern
England that were once flattened on the Thatcherite anvil.
The Tories’ next task is to tackle the root causes of the resent
ment they so successfully articulated. Critics like to dismiss their
stated priority, “levelling up”, as a mere slogan. But as their confer
ence in Manchester, which ended on October 6th, showed, they
are as serious about it as their predecessors were about deregula
tion and privatisation. Levelling up was not only the theme of Mr
Johnson’s rollicking address, but also of many of the hundredodd
meetings on the fringe. These featured champions of levelling up,
such as Paul Ormerod, an economist who runs the Rochdale devel
opment agency and owns the local rugby team. And they were re
markably policyheavy, with references to Michael Porter’s work
on clusters and postneoclassical endogenous growth theory.
Levelling up means different things in, say, a village with a
strong sense of identity but no transport links, and an anonymous
housing sprawl near a motorway. Unlike opportunity, ability is
evenly distributed, Mr Johnson likes to point out: levelling up
means closing this gap. Michael Gove, the secretary of state for the
new department of Levelling Up, Housing and Communities (the
“Housing and Communities” bit is silent) adds community to op
portunity: “You shouldn’t have to leave the places you love to en
joy the future you crave.” Neil O’Brien, the new minister for level
ling up, promises a white paper that will not just give a clear definition of levelling up, but also suggest ways to measure it.
The conference saw some bold examples of what it might mean
in policy terms. The most striking was the prime minister’s insis
tence that he would not buckle to employers’ demands for more
immigration: he wants to move from an economic model where
immigration is high and wages, skills and productivity are low to
the reverse. Three more emerged on the fringe. The first was a shift
in focus from the golden triangle of Oxford, Cambridge and Lon
don to many miniclusters, such as wind power in the northeast,
plant science in Aberystwyth and nuclearsubmarine technology
in BarrowinFurness. George Freeman, the minister for innova
tion, pointed out that Britain is good at disruptive innovation,
such as fintech, but that such clusters may call for the sort of in
cremental innovation that require close coordination between
entrepreneurs and local authorities.
The second is that levelling up cannot work without handing
power to local government or community associations. Until very
recently, it looked as if the government was pulling back from rad
ical devolution in favour of a more topdown approach. But the
overwhelming consensus of the conference was that the grip of
the gentleman in Whitehall must be loosened. Mr O’Brien waxed
lyrical, not only about giving more power to existing mayors (who
represent 40% of the population and a slightly higher share of the
economy), but about extending devolution to the counties.
The third is that levelling up is as much about quality of life as
about infrastructure and economic development. Rachel Wolf,
one of the authors of the party’s 2019 manifesto, argued for paying
close attention to small signs that a community is cared for or ne
glected—such contrasting indications as the prevalence of hang
ing baskets and graffiti on war memorials. This way of thinking
not only strengthens the case for giving people power to make de
cisions about their own communities, but shifts the policy focus
away from conventional tools of regeneration, such as building a
new retail park, to smaller, bespoke ways to improve lives.
Is Britain capable of levelling up? It has a long record of promis
ing, and failing, to decentralise its economy and to upgrade tech
nical education. The prime minister’s determination to cut off
cheap foreign labour could also prove counterproductive in the
short term by starving care homes of carers and roadbuilders of
navvies, and, in the longer term, by slowing growth. Mr Johnson’s
allies claim that depriving the labour market of workers will force
companies to increase productivity. But economywide improve
ments will not be easy. The population is much older than in the
1980s, when the Tories last set about restructuring Britain. In
creasing productivity is also much harder in a serviceoriented
economy such as Britain’s: such obvious measures as shifting to
remote consultations in the health service and remote lectures in
universities have provoked widespread opposition.One more heave
As a classicist, Mr Johnson will be familiar with the tale of Sisy
phus, who was punished for cheating death by being forced to roll
a boulder up a hill, only to have it roll back down every time it
neared the top. There is a good chance that, thanks to Britain’s
longstanding bias towards London and problems with productiv
ity, levelling up will amount to another such endless, thankless
grind. There is no reason to think the economy is less London
centric now than it waswhen Mr Johnson took over. But there is al
so no doubt that theConservatives are determined to put their
shoulders to the task.nBagehot
The Tories are deadly serious about levelling up