Neil O’Brien is MP for Harborough.
I’ll tell you what I want, what I really, really want. I want someone to drive a stake through the heart of the 1990s. Why, you ask, do we need to kill off a decade which technically ended twenty years ago? The problem is the ideas of that decade are still with us, staggering around like a zombie in a garish “Global Hypercolor” t-shirt.
In the aftermath of the fall of the Berlin Wall, the west collectively came to believe in some over-optimistic assumptions. Policies based on them are still kicking around, like a badly-chipped “Friends” coffee mug. During the 90s, we were told we’d reached the end of history, and could look forward to the “universalisation of Western liberal democracy as the final form of human government.”
Instead, we’re in a world where the rising superpower is a communist dictatorship. Rising wealth hasn’t led to democratisation in China. Instead, human rights are going backwards under China’s President-for-life Xi Jinping.
Yet amazingly, you still hear those complacent 90s arguments trotted out: “if we engage more, they’ll become more like us.” In reality, whether it’s firms like HSBC backing repressive new laws in Hong Kong; or episodes of western TV shows being censored for fear of China; or countless western firms grovelling to Beijing for supposed slights… it’s clear we got it the wrong way round: they’re making us more like them.
The rise of China exemplifies other zombie assumptions from the 90s. The idea that industrial policy can’t work, for example. During the 90s, our future was thought to be all about services. Financial engineering, not actual engineering.
That assumption is one reason Britain deindustrialised more than any other G20 country since 1990. People still trot out the line that “government can’t pick winners, losers pick governments” like it’s some great flash of insight.
So explain how Huawei went from an idea in 1987, to the world’s most powerful telecoms firm today? Answer: lucrative contracts from the People’s Liberation Army, massive state subsidies, a developmental state investing heavily in R&D, and a bit of industrial espionage.
More relevantly for us, other democracies have has successful industrial policies. In 1990 South Korea’s GDP per head was 41 per cent of the UK. It’s now 85 per cent. How did it catch up so fast? Industrial policy.
How did Taiwan, with no computer chip making industry in 1987, come to have the world’s leading chip maker, TSMC? Industrial Policy. The US may have the strongest industrial policies of all, with an incredible military/innovation complex teeing up the successes of silicon valley firms. The 90s consensus ignores all this.
Don’t get me wrong: Britain’s post-war industrial policies were awash with failures. But we ignore other countries successes. We don’t notice that, since 1997, manufacturing has provided 40-50 per cent of all productivity growth in places like the North West, West Midlands and Wales.
We don’t even remember our own successes. Saving Rolls Royce was a good investment. Margaret Thatcher’s interventions to promote microcomputers led to tech firms like ARM, plus a strong games industry (and this fun video of her showing off the ZX spectrum to the then Japanese Prime Minister).
Her bungs to get Nissan to Sunderland transformed the car industry and more. She even set up set up a successful state-backed biotech firm, Celltech, to build a UK beachead in the industry. Yet think tanks in thrall to 90s thinking tell us these are things no Thatcherite should endorse.
In the 1990s, people thought things could be “designed in California, assembled in China” – as it still says on Apple products. We missed the importance of the industrial commons: the links between designing and making. So we made trade policy in the overconfident belief that the west would keep all the good jobs.
Bill Clinton said of letting China joining the WTO that: “Economically, this agreement is the equivalent of a one-way street.” He was right. He just got the direction of the traffic wrong. China was let into the club, but never obeyed the rules.
Many other 1990s legacy policies are also built on dated assumptions that the West dominates the world economy – the mental equivalent of still carrying a blockbuster video card in your wallet.
Take the Kyoto Protocol, signed in 1997. Under it, developed countries in Europe and North America would set targets to reduce their emissions. But other countries would not have such targets. It was vaguely assumed that they would be persuaded to follow by the force of our example. Or something.
In an east-shifted world it just didn’t work. That’s why world emissions are still rise with global growth. That’s why China is in the process of adding more coal power plants than currently exist in Europe.
As Greta Thunberg (born after the 90s) points out, progress in reducing emissions doesn’t look so good when you look at all the emissions (and industry) that have simply been offshored to dirtier economies.
Remember how the “Information superhighway” would be a force for liberty and international friendship? In reality, Twitter is a Hobbsian war of all against all, populated by armies of state-funded bots pumping out disinformation.
We worried about the Millennium Bug. We didn’t know about filter bubbles or “pile-ons” or aps for kids made addictive by design.
The “world wide web” was going to promote competition in business. Turns out, in a frictionless world, the forces tending towards giant monopolies are strong. During lockdown I rewatched late 90s classic, You’ve Got Mail, in which little bookshop owner Meg Ryan falls in love with big bookshop owner Tom Hanks over a succession of newly trendy takeaway coffees. Little do they realise that Amazon is about to stomp them both flat.
Years on, we’re still debating the right way for competition policy or the tax system to respond to these monopolising forces. Optimistic assumptions have held us back. In the 90s we thought the future belonged to young, globalised urban graduates, and that the future was post-national.
Take British Airways. In 1997, it replaced the Union Jack with funky new “Utopia / World Image” tailfins for its planes. In 2020, Britain has left the EU.
There’s been a populist backlash from disenfranchised blue collar workers across the west. British Airways Union Jack theme is back and it’s keen to “big up” (to use 90s speak) its “Britishness”.
The future isn’t what it used to be, but we’re still struggling to find an alternative way to reunite the nation. The protests, fights and statue-toppling of recent weeks, and the bafflement of many less urban voters about it, reveal a country in which large numbers of people are no longer even able to understand one another: no longer part of the same conversation.
Part of it is about the vast expansion of universities, believed in the 90s to be an unalloyed good, but today leaving too many young people feeling mis-sold, in debt, and cheesed off.
Part of the splintering is national. In the 1990s we were told “devolution will kill nationalism stone dead”. This has not proved to be the case.
Yet, sad as a dead Tamagotchi, the assumptions of the 1990s linger on somehow. Like fax machines, pagers and your old “macarena” CD, it’s time for them to go in the bin.