The Oxford (& Cambdrige ) Union Debates, at their best , free up curiosity way beyond conventional wisdom. As it
increasing looks as if globalisation's conventinal wisdom spun a wrong spiral, now would be the best of times if people
everywhere were empowered by this excellent dialogue format
Growth depends on
never letting politicians spend more than one quarter of GDP
Oxford Union Debate of 30 May 1996
For the motion : Norman Macrae (CBE and Japanese Order of the Rising Sun), economist, market
futurologist, writer of over 2000 editorials, mainly retired after 5 decades of journalism at The Economist and The Sunday
Times
Against the motion: Rt Honourable Michael Foot, UK Member of Parliament for Plymouth (1945-1955), Ebbw Vale (1960-1983),
Leader of the Labour Party (1980-1983) and succeeded by Rt Hon Neil Kinnock (1983-1992)
Original
text for debate forwarded by Norman Macrae
"Mr President, Sir,
On the night I was conceived in
1922, by a then junior British diplomat in New York, the lucky Americans similarly enjoying themselves around him had only
8% of their GPs spent by politicians. So Americans in that decade brought the world's cleanest environment revolution,
as they triumphed over that pollutant vehicle the horse, put mankind on motor cars' wheels, and built sudden industrial
strength which alone meant that Hitler, who by my 18th Christmas in 1941 held Europe from Atlantic to 20 miles from Moscow,
was not quite strong enough to shove into gas ovens tiresomely argumentative people like me - and it would later, sir, have
been you and all those so happily arguing still in this House.
After the war, we dinosaurs doddered. As I think the
second oldest speaker tonight, I am properly desolate, sir, that we hand on to you of my granddaughters' generation an
advanced world, at present divided into what comprehensive schoolteachers would call three halves.
In the 15 countries
of our west European home, politicians spend between 42% and 63% of our GDPs, in deadening ways so job-losing and so sclerotic
that - has old Oxford not noticed this, or does its brain hurt? - unemployment, especially for those whose European youth
has been less gilded than yours, rises at each comparable stage of each successive trade cycle, and must thus continue until
you see why.
Politicians' spend of GDP dwindles to "only" 35% in Europe's next two clear
competitor countries. In America and in Japan which I briefly economically advised 35 years ago when its real GDP at yen exchange
rate was one eighth of what it is now. The surge after 1950 by Hiroshimaed Japan in (eg) life expectancy (49 years for a Japanese
in 1950, way over our 79 for its old ladies now) - plus its leapfrog beyond us in living standards, in education for its humblest
inter-city children circa six times better than ours, in lower crime - was to us who tended it then by far the most exciting
sudden forward leap in all the economic history of the world. Do note that it started, and had its main impetus, when its
politicians spent only 24% of its GDP. In both Japan and America state spending has been subjected to an upward creep - a
good soubriquet, that, for Clinton and Blair and Hashimoto - but since politicians' GDP pinch is still curbed to only
35%, both still exceed Europe in faster innovation and thus fuller employment.
The 1950s-1960s role of
Japan is now carried forward by the third group of competitors poised to pinch our patrimony. The Hong Kongs and Singapores,
which were coolie countries when I first saw them, have duly passed Britain in living standards, in inner city non-yobdom,
in far better education than ours for the mass of their 17 year olds - even though, no sir, because their politicians spend,
by IMF valuation, only 18% of their GDPs.
Has the penny really not dropped among Oxford's dreaming spires? When
technology surges forward as in this computer age, the new wealth of nations springs from three main manifestations of human
wit. One, a relentless daily search among a million competing profit centres on how best next to improve use of that technology
next morning. Second, maximum competition in forecasting and guessing and experimenting with what the future may bring. Never
allow politicians' monopoly in that. Third, I am sorry if this offends, avoid yesterday-cuddling trade unionisation of
who does which, when, at what fixed price, and traditionally how. In our lifetime, it has been proven (a) that free markets
bring forth those three qualities circa six times more efficaciously than when politicians say "let's appoint a monopoly
organisation to produce some bright wheeze like a channel tunnel", ooh; and proven (b) that international institutions
and politicians (of all parties) fib incredibly about the statistical results of this.
When Brussels said
that communist East Germany had surpassed Harold Wilson's Britain in prosperity, and Ted Heath and a credulous BBC trilled
agreement, I went to East Germany. Anybody who noticed a Trabant was not worth a Mercedes, could see East Germany outproduced
even Wilson's Britain only in pollution and steroid-drugged lady shot-putters. In its most showpiece factories I assessed
productivity at some one-sixth of Wilson's Britain's factories per man and per almost every other unit of input. When
the Berlin Wall came down, my assessment proved to have been a little too kind to socialism as usual. If you compared the
state factories of North Korea with the private factories of South Korea, you'd get the more dramatic figures typical
of Asia. In the early 1990s the nationalised telephone utility of India had 40 times more employees than the privatised telephone
utility of Thailand, although little Thailand was then just passing mighty India in the number of telephones actually working.
In Europe, we have the usual figures which might seem rude to the right honourable ex-member of Ebbw Vale.
In the dozen years since British steel was privatised, its productivity per man has risen six times. If he says this is because
of wicked sackings and shuttings, remember that Oxford's Attlee in 1947 told Britain's then 367,000 coalminers that
coming public ownership would ensure nobody producing such valuable stuff as coal would lose his job this century. It is only
the long overdue privatisation that can save even 12,000 of those jobs now, but don't let me claw at scabs of old wounds.
The question for your generation, sir, is whether you are going to drive ever more underclass Britons
into unemployment by allowing five vital industries (accounting for three quarters of public expenditure) to be run by politicians
at circa one sixth the efficiency that freer markets would bring. These are (1) social security insurance; (2) education;
(3) health insurance; (4) a regulatory bureaucracy now five times larger than in Kaiser Wilhelm's Prussia; (5) crime non-prevention.
In education you will have to move to competitive vouchers, with payments highest for those who set up
competitive schools in the worst inner cities, where state teaching of both facts and behaviour has incredibly declined in
the past 50 years, while private industry has spread once unimaginable durables like colour tvs from 0 to 98% of households.
One part of education (assessing by computer a particular child's learning pattern, seizing from that the next questions
or facts to impart) will become telecommunicable from far countries. Bovine politicians don't see the same is true of
social security insurance (if clients choose to stick to behaviourial norms like staying in married families, you can insure
them and theirs far more cheaply against most social ills), and in health insurance (where doctors from Singapore will diagnose
the right medical and diet regimes for the tummy from Wigan just X-rayed down their screens). The world's greatest experts
on these three and other telecommutable subjects will congregate in the lands with lowest taxation, and all of you voting
against tonight's motion will just be brutalising, ruining and killing poorer people if you say that's jolly unfair
to British politicians' monopoly welfare state.
Crime rates will depend on whether you elect over-arrogant
politicians. In the first decade of my life America produced gangsterdom as well as boom, because its politicians (in a folly
my dad said would never be repeated) decreed alcohol could only be sold by Capone's vicious criminals. In this last decade
of my life two-thirds of British crime is drug-related, because politicians decree sales of other drugs must be profitably
reserved only for criminals. Under any sensible tax plus licensing regime such as we now have for alcohol, you don't get
15-year olds hooked on a wild and muggery-necessitating £200 a day alcohol mania, because a pub, fearing a loss of licence,
would refer any such client for special treatment. In crime prevention we will also have to move to the methods of Japan,
which has one seventh as many lawyers as we, a court system based on "did he do it, and how most cheaply to stop him
doing it again?" which does not include stuffing hordes into expensive British prisons which statistically make inmates
more likely to reoffend.
Can you see any other trade apart from heavily trade unionised British prison
screws who have actual negative gross production? Yes, a few feet away. A chart from that Swedish Royal Commission chaired
by the profs who award the Nobel prize in economics showed that the most effective number of members of parliament for a country
of Britain's size would be 90-something. We have 651, and for the imminent general election they have pushed it up to
659 jobs for the boys.
I'd like to end on a more kindly note. If I'd been told in youth that politicians
would spend 42% of Britain's GDP, which is more than Hitler spent of Germany's GDP in 1937, I'd have assumed we
would by now be living under a monstrous tyranny. After 50 years of reporting on parliament, let me end with my favourite
story which shows it just as an elephant's joke. The story is denied by the two self-credulous politicians concerned,
but confirmed by the Americans who observed it. One day in the mid-80s, a party of American tourists was as usual being shown
reverently around the palace of Westminster. The Lord Chancellor of England appeared in full gig on a staircase above them,
and he needed to talk, on some matter of altering a timetable, to the Right Hon gent's successor as Labour leader who
was disappearing down a corridor the other way. so Lord Chancellor Hailsham, in full-bottomed wig and black and gold robe,
called to the other by his Christian name. Over the heads of the American tourists, he bellowed "Neil".
Instantly,
and without hesitation, all the American tourists in the middle fell fully to their knees. A similar obsequiousness is not
required to all the forecasts I have shouted at you this evening. A small genuflection will suffice to the simple rule by
which your generation could octuple Britain's real national income during the 40 years of marvellously increasing computer
technology which will be your working lives. That rule, sir, is never, never, allow politicians to pinch and spend more than
a quarter of GDP. Everything will be so easy for the poorest of your contemporaries if only you understand that."
Questions
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How can we help you frame (and replay in many cities hungry for something bother than old global) a Debate today chris macrae Info@worldcitizen.tv
