speri.comment: the political economy blog

Don’t depoliticise inclusive growth!

The endeavour to set out and implement a new vision for more inclusive growth will fail if it is not treated fundamentally as a matter of political economy, rather than an aspect of social policy

Professor Tony Payne, Professorial Fellow, SPERI

Tony PayneThe inclusive growth agenda is undoubtedly being talked about in a more mainstream way than was the case even a few years ago when the concept was first framed, but it now faces the real danger that it will stumble and run into the ground if it is excessively depoliticised.  It needs instead explicitly to be made more political and to join and win the relevant political battles.

That was the conclusion – both optimistic and pessimistic at the same time – that I drew at the end of a very interesting day spent in Glasgow last month as a delegate at what was described, with genuine national pride, as ‘Scotland’s Inclusive Growth Conference’.  It was highly appropriate as well that all of us had to walk past a statue of Adam Smith, the University of Glasgow’s most famous alumnus, as we gathered on the first floor of the University’s remarkable Gilbert Scott Building, itself a magnificent expression of the Gothic Revival movement.  Throughout the day speakers could not but reach for Smith quotes to embellish their arguments.

The conference was opened by Scotland’s First Minister, Nicola Sturgeon, the leader of the Scottish National Party (SNP), who spoke in her usual calm and yet incisive fashion.  She noted that inclusive growth was now much more than the ‘niche subject’ it had been when the Scottish government first started talking about it around three years ago and claimed with fetching modesty for a contemporary political leader that Scotland was ‘doing relatively well’ in its pursuit (she stressed the word ‘relatively’).

I don’t have the knowledge of Scotland’s contemporary political economy to offer an informed judgement of that claim, but I do know that the First Minister was right when she insisted that ‘inclusive growth isn’t and cannot be separate from other strands of our economic strategy’.  She referred in this context to the revision of Scotland’s economic strategy announced by the SNP government in March 2015.  It sets out four priorities – the four i’s, as Sturgeon described them – namely, innovation, internationalisation, investment and inclusive growth.

So far, so obvious, one might say, but still good.  Gabriela Ramos, Special Counsellor to the Chief of Staff of the Organisation for Economic Cooperation and Development (OECD), spoke next and focused in similar fashion on the political economy of inclusive growth, taking an international perspective. The current growth model deployed across the OECD world was ‘just not working’, she said.  It needed to change because ‘the tide will not lift all boats’.  As a result, governing was becoming more difficult everywhere.  In particular, the people increasingly don’t believe experts, and she accepted that ‘that’s our problem’ as experts.

However, after these keynote speeches the conference discernibly changed tone with the focus shifting thereafter to the practical matter of ‘delivering’ more inclusive growth.  This was when I began to sense the existence of a major conceptual problem, something which I think is absolutely foundational to the whole inclusive growth agenda.  The point, put bluntly, is this: inclusive growth can’t ever be ‘delivered’.  Instead, it has to made and sustained politically.  That’s harder both to think through and pull off, but it’s the only way forward.

The Glasgow conference preferred to ignore this insight.  Once Sturgeon and Ramos had spoken, it was as if all the political stuff that needed to be said had been said and good people could then address the many social policy challenges of creating more inclusiveness in society.  As such, a series of committed and earnest speakers talked us through the merits of social interventions in the ‘early years’, the underappreciated creativity of local entrepreneurs, the exciting things that energetic non-governmental organisations could do to ameliorate social problems, and so on and so forth.  Inclusive growth was even heralded at one point as offering ‘the tantalising prospect of a win-win scenario’.

I don’t intend at all to demean these approaches.  They reflect great concern and professional commitment.  In the most moving talk of the day, Sir Harry Burns, Professor of Global Public Health at the University of Strathclyde and a former Chief Medical Officer for Scotland and now also a member of Nicola Sturgeon’s Council of Economic Advisers, spoke about the crises of the country’s ‘most chaotic families’ and revealed in answer to a question that he still spent ‘every waking hour’ thinking about how their plight could be improved.  All of this, and more, will undoubtedly be needed if the inclusive part of inclusive growth is to be made a reality.

The trouble, however, is that the growth bit can’t simply be presumed, or expected just to happen ‘as usual’, with all the effort then being put into attempts to make it more inclusive.  The truth is that you can’t expect to deal with the noxious fumes coming out of a car just by being ready to spray air freshener around the exhaust pipe: you have to redesign the engine of the car and maybe at some point you even have to ask whether cars, as we know them, are still needed, which are altogether more difficult things to do.

Perfectly understandably in professional terms, the social policy establishment has jumped upon the inclusive growth agenda in exactly the way that the ‘development’ community feeds off social and political crises in the poor world and security experts turn on to the announcement of a new ‘war’ against drugs or terrorism.  From a cynical perspective, they can see the many opportunities it creates for the knowledge they have and the line of work in which they engage.  From a more tolerant perspective, they just want to be useful in the face of an acknowledged problem.

After the Scotland conference, though, I’m worried that this approach to bringing about inclusive growth will become dominant and will squeeze out the politics.  My view is that inclusive growth as an agenda is unavoidably political.  It has to be more than for inclusiveness, which means that it must at heart be against exclusiveness.  The key is actually to try to find and follow a growth model in the political economy that does not drive exclusiveness, but instead supports a process of greater inclusiveness in the very way it generates growth.  In such a context, good social policy-making can kick in helpfully to address the most difficult residual problems of an unequal society.  But it isn’t ever going to be powerful enough to eliminate, or even reduce significantly, the extensive exclusiveness that neoliberalism inevitably brings about.

In other words, supporters of inclusive growth need now to move the debate more firmly on to political terrain.  The concept has successfully been put on the table and the political obstacles to its achievement have now to be identified and tackled.  We need to talk more about such matters as fairer taxation, excessive corporate power and weakened, diminished trade unions.  We need to explore again what an empowering and interventionist state can do to regulate markets and chart industrial strategy.  We need to call for nothing less than the forging of new political settlements in countries that want inclusive growth to happen and to recognise as well that a new international political settlement will also be required to ensure that those inclusive growth experiments that do take off at national level, such as Scotland’s, are permitted to continue.

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