Abby Innes, "Late Soviet Britain: Why Materialist Utopias Fail" (Cambridge UP, 2023)
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Welcome to the New Books Network.

Hello, everyone. Welcome to another episode of New Books Network. This is your host, Morteza Hajizadeh from Critical Theory Channel. Today, I'm honored to be speaking with Dr. Abby Innes about a wonderful book that is recently published with Cambridge University Press. The book is called Late Soviet Britain, Why Materialist Utopias Fail. And

And Dr. Abby Innes is an Associate Professor of Political Economy in the European Institute at LSE. Abby, welcome to NewBooks Network. Thank you for asking me. This is such a fascinating topic, and I must say that I was really intrigued by the title, The Late Soviet Britain, because these two countries might sometimes be considered as archenemy when it comes to economics, right?

So can you just briefly introduce yourself, tell us how the idea of the book came about and what does late Soviet Britain mean? It's a very reasonable question because it sounds slightly crazy. So it does take some explanation. So a bit of background. My research really for most of my career was on Central Europe. So I was really interested in the

post-communist transition. So the big system transitions from Soviet-style central planning in Central Europe to advanced capitalist democracies, ideally. That was the hope. But I was fascinated by the tensions between trying to deconstruct a Soviet socialist system

and to really radically liberalize the economy, which was the orthodoxy at the time, while also trying to become democratic states, while also trying to create popular, inclusive, as it were, socially embedded political economies. And from the beginning, there were massive tensions between the pressures to liberalize and the social consequences of liberalizing.

And at the same time, that parallel desire to try and create not just a functioning democracy, but a stable democracy that might be consolidated and command real democratic legitimacy.

So that's my academic background. And then Brexit happened. And it suddenly felt a bit ridiculous to be, as a Brit, writing about the problems of corporate state capture and political legitimacy in a region when my own country had just committed this astonishing act of political economic self-harm. So I thought...

that I was going to write a book about state failure because my sort of opening intuition was that Brexit was the wrong diagnosis of a real crisis. And the crisis was a crisis of the state, of state failures to really intervene in our economy in such a way that it was remaining unresolved.

productive, that you had high quality employment, that it could deal with inequality. And instead, what we had had since the Thatcher period were sort of deepening problems of social and economic development, but in a process of continuous reform. So I was sort of fascinated by how you could have endless reform of the state

in search of efficiency and yet end up with what were clearly increasingly socially dysfunctional outcomes. And that paradox really sort of fascinated me. And I thought, right, I'll try and write about the nature of the evolving state since Thatcher. And so I started more serious research into it. And then I started to get this very peculiar sensation that the pathologies that I was seeing, the state, the forms of state failure,

and corporate failure that I was seeing were weirdly familiar. And they were increasingly just reminding me of Soviet enterprise and state failures. And I thought, well, this is insane. That can't be the case. These are, as you said, completely opposing regimes. One is

you know, an attempt at total command planning in order to take the society from socialism to communism under a totalitarian political regime. And here I am living in a country with one of the oldest liberal histories in the world. It's one of the most open societies in the world. How on earth can this be possible?

So I realized I was going to have to write a much longer book than I was expecting to because I realized I was going to go all the way back into the metaphysics, the economic metaphysics between, sorry, behind sapient and behind neoliberal economic thought in order to try and do a sort of synoptic account of

The progress from ideology through the really existing regime through to its political outcome. So neoliberalism, exactly as you say, is the antithesis in many ways to Soviet socialism. And it's often framed as the victorious doctrine against Soviet communism. It's meant to be its nemesis and its kind of antidote.

But what I try and do in the book is examine how Soviet and neoliberal economics rooted in neoclassical economics, so sort of mainstream neoclassical economics, how they understand the nature of political economic reality. So the ontology and epistemology in these economic regimes. And when you do that, I think what you find is that they're incredibly exact mirror images. They are both...

basically misadventures in high modernism. So they're based on closed system reasoning about the political economy. Both of them assert that there are predetermined laws of the economy that each doctrine alone can apprehend. And because they're machine models of the economy, they both require an incredibly reductionist model of human motivation, of sort of absolute perfect human rationality. So

In the Soviet case, that's a socialist rationality. And in the neoclassical case, that's a utilitarian rationality. And one of the sort of paradoxes or tensions that you endlessly come back to is both systems need those forms of rationality to work in a pristine way for their economic recommendations to function the way they're supposed to function.

But of course, that's not how human motivation functions. So you have this paradox that on the one hand, as it were, as charismatic political regimes, they're both sort of appealing to a state of nature in which we're meant to have this kind of pristine form of motivation. And at the same time, those systems have to construct that form of motivation.

So because they're circular, basically tautological or so, you know, yeah, they're tautological forms of reasoning in both cases, even though they have very different philosophical backgrounds, they end up in this equally tautological space. Yeah.

then they hit some remarkably similar metaphysical problems, which is that the correct consciousness doesn't exist in the schemes that are dependent upon it. And so what both systems do is bring in a world of unintended and unanticipated consequences. So

In both cases, we've been trying to implement materialist utopias. And what we've ended up with is a caricature of their promises in both states. And that's why you call them material utopias, because they both promise a utopic vision of society, material utopia, which obviously hasn't happened yet.

Well, and they're both, I mean, obviously the Soviet system is rooted in Marxist thought and in terms of the Soviet system, particularly Marxist-Leninist thought.

And this is a materialist theory of human development through from feudalism through to capitalism through to the late stages of capitalism, ideally through to socialism. But the idea of the sort of Leninist intervention in Marxist thought is

is the idea that rather than waiting for the end stages of capitalism for the socialist revolution to happen, you can intervene, you can build a socialist version of the capitalist state and, as it were, engineer the socialist revolution. The flip side of that, neoclassical economics is arguing that we are motivated by cost-benefit analysis around our essentially material interests.

different debates within economics trying to extend that definition of utility. But both are fundamentally arguments about the efficient allocation of things, right? I mean, they're both utopias.

in how to create real human societies that optimize the allocation of things. So in both cases, we move from the sort of art of government, if you like, as an imperfect activity in an imperfectible world to the idea that we can have the correct governing science in the efficient allocation of things. And so, yes,

So that's the materialism in both cases. And part of the debate in the book is when I look at the practical policy outcomes and also what it does to our understanding of

human behavior and human motivation is it's also very dehumanizing in both cases in different ways, but profanely dehumanizing in both instances because we end up with very sort of robotic understandings of ourselves as part of this kind of clockwork cosmos of efficiency creation, basically. I have another question. When I was, I don't know if it's the right time to pose this question or not.

It's an argument, I guess, among some economists as well. You mentioned that both systems, Soviet system and also new classical economics, they think of economy as a set of predetermined laws that determine...

that they plan maybe to predict human behavior. Maybe the question I should pose at the beginning is that, do you think that economics is a science similar to hard sciences, which has this, you know, irrefutable facts, you can come up with these formulas, apply them to society, hope for an optimal outcome? Yeah.

It seems that both neoliberals and also the communists in Soviet Union had this idea of economy, set of rules they can apply to get the optimal outcome.

Exactly. No. And I think that's a really it's a really important question. And it was part of my realization when I was trying to figure out how to make a case that persuaded me above anything else. I mean, the book took six and a half years to write and I spent the first four years convinced that I must be wrong because I thought if.

If this comparison was right, someone would have made it before. There must be some rebuttal out there that I'm just too stupid to figure out. So part of me trying to really convince myself was going all the way back to the philosophy of science in order to help me sort of navigate that. And there is an entire discipline, the philosophy of science, philosophy of knowledge, which is entirely about this question.

And it would tend to argue that the constraints on social science in becoming, as it were, a hard science are much more significant than they are for the natural sciences, but they also exist in the natural sciences. So from all the way back through the sort of Kantian tradition in the philosophy of science, we have this inescapable problem that

Nobody can find some kind of Archimedean point where they can read the way the world works like a book of truth, basically. All

All our theory is built on the shoulders of previous theories. So we can't escape the history of our own curiosity in that sense. And that means that to hope to come up with a predictive science, as it were a kind of robust science, we need to be able to isolate the causal, the kind of generative mechanisms behind a given event that we're trying to observe.

Or there need to be natural laws at work that are incredibly robust over time and that under continuous testing and observation remain robust. And this is where we get the split between the natural sciences and the social sciences, because in the natural sciences, that ability to isolate causal phenomena has been more possible for reasons I'll get into in a minute, but clearly they found...

instances of enormous consistency, whether it's about how certain chemicals react with each other or around thermodynamics or gravity and

The existence of the natural laws that are remarkably robust over time or endlessly repeatable experiments that produce the same outcomes, these things allow scientists to develop theory building based on those sort of solid, relatively solid grants, not least around climate science, for example.

The problem with doing that in the natural sciences when we're looking at people is that people are imaginative. We're trying to investigate people who are also investigating themselves and the world and changing their minds. We're in an imaginative world. That creates an inescapable contingency in the study of other people, in the study of social behavior, of political behavior, of economic behavior.

And it does mean that the aspiration in neoclassical economics, which came at the end of the 19th century and really wanted to imitate physics. I mean, the ambition behind developing neoclassical economics was that by using mathematics, you would somehow cut out all the sort of social noise that

Somehow, by looking at how a rational individual might navigate commodity space, you could basically borrow metaphors from physics and Newtonian mechanics. You could swap out energy for utility and use mathematics as a way of trying to map out how such an individual would navigate their way around different conditions, different situations.

and create a universal science that was good for all times and places. And it's important to really notice something about that project, which is it doesn't use the scientific method as we normally understand it. So most social sciences do what most natural sciences do, which is they use the scientific method. They observe the empirics of something. They look at what's happening on the ground.

And they try and observe patterns in it. They then consider those patterns in relation to existing theories about what those patterns tell us. And then they try and modify that theory. So it's a process of observation, theorization, and continuous review and error correction. And at MACE, what we're really aspiring to do there is a kind of problem solving, a practical problem solving, rather than coming up with universal truths that are good for all times and places.

Neoclassical economics doesn't do that. It's axiomatic deductive. It's not hypothetical deductive.

So it is logical reasoning from axiomatic assumptions from certain postulates, which are themselves utopian, such as the idea that human made of it, you know, take rational economic man who can rank order their preferences. I mean, I don't know about you. I struggled to rank order even two or three preferences, let alone to be able to do that continuously. And as it was sort of perfectly throughout my day, it's just not a good description of how we operate.

Also, it refutes the idea that we might have imaginative thoughts that aren't any part of that sort of cognitive practice. But it does mean you have a whole body of, you know, have a whole century plus of theoretical development that is based on argument from assumption using formal mathematical logic, which is then

then and only then taken into the empirical world and sort of tested against the empirics. But that's where the circularity comes in, because if you're using economic modeling, using mathematics, you basically need to close the model. You need a way of writing in all the behavioral assumptions and the kind of parameters of the economy and

so that you can, as it were, tell a mathematical story about what happens given certain stimuli or given certain constraints. So it's, I mean, the comparison in the Soviet system there too is that

So early Marxism-Leninism is about classes, of course. It's not methodologically individualist. It's about the developmental dynamics and emerging conflicts between classes. But there's a long-range sort of historical determinism in it.

Where we end up on the same drawing board as neoclassical economics is with Stalinism, with the attempt to foreshorten that long-range historical development and basically have total command planning in order to have a fully socialist economy. And then what they're basically trying to do is to lay out on the planning table every single aspect of the social production regime, the economic production regime,

that gets disappeared, discreetly disappeared behind all the mathematical models.

in neoclassical economics, which are about the same closed commodity space. So actually, there's an economist, Vilfredo Pareto, in 1902, who said, look, as a matter of kind of formal theory, the perfect social plan and the perfectly free market are formally identical. They're the same thing. And what he was observing then was purely a kind of academic observation. It was a kind of a nice theoretical observation.

I don't think what he was expecting was that you would then have a Soviet system that would try and make that perfect social plan be real. And then decades later, a neoliberal revolution in economics that took the most idealized form of market reasoning in neoclassical modeling and theory and tried to make real societies then conform to that theory.

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No lengthy onboarding. Beautiful reports in minutes. Custom workflows you can build on your own. Easy to use, prompt-free AI. Huh. Turns out you can love a work management platform. Monday.com, the first work platform you'll love to use. It was a great and comprehensive response to the question. And you actually touched up on some of the questions I wanted to ask later on.

more about those affinities between the two systems. One of them that you discuss in the book is the theory of general equilibrium, right?

which is the foundation of neoliberalism. I was wondering if you could tell us what that is, if it's still a viable theory or not. And you do find the power for this theory in Soviet economics, which is there, it is called balanced plan. And I guess even in terms of general equilibrium, balanced plan, more synonym as well. So can you talk about these two, please? Absolutely. So it's Pareto's point, isn't it? That they're, oh, look, we're trying to do the same thing here.

So the idea of general equilibrium is the idea that all markets can clear so that you would have a perfect allocation of supply and demand. So there's really a kind of an optimal allocation. And it had become a bit of a sort of holy grail, if you like, that a proof could be made, a mathematical proof could be made of the logical possibility

of such an event occurring. I think it's important here, and I try and do that in the book, that often in some of the most important models and theories, the economists themselves who were writing them knew that they were just thought experiments. So Arrow and Dubrow come up in the 1950s with a mathematical proof of general equilibrium. If you go to the model itself, if you go to the theory itself,

What will strike you is the outlandish nature of the underlying assumptions in the model that you need in order for the model to work. So one of them is that all trades take place at the beginning of time, right? So this is a timeless setter. And of course, that's a feature of neoclassical modeling in general. It operates in logical time and not historical time, which turns out to be a problem if you try and build public policy on its basis.

So all trades take place at the beginning of time. There's no money in the system. This is a kind of exchange model. You have perfect asset markets. So everything that anyone might want to trade is absolutely available. Firms can exit and enter markets in a completely frictionless way. There are no barriers to entry.

So there's a whole list of preconditions for the model to work. And having set up the model...

and managed to sort of close it, as it were, then both authors say, look, let's be clear that no real economy can work this way. They were very clear that it was a thought experiment. And actually, in the 1970s, Sonnenschein, Mantle and Dubrow, and it's the same Dubrow who had worked with Arrow in the existence proof,

disproved it, basically said, no, this isn't even formally coherent because as soon as you add any complexity to the model, you get chaos. So the idea that general equilibrium can be some kind of stable, continuous process is simply not even mathematically coherent. And that's really important because

the, as it were, the revealed prophecy of general equilibrium, the idea that if the state gets out of the way, markets will tend to

towards an ever greater, more frictionless, more efficient allocation of things. It is the core justification of neoliberal political economy. The idea that the state, as soon as the state enters into regulation or control of market activity, it is somehow intervening in the mechanism of general equilibrium.

That's the sort of deep in the small print of neoliberal justification. But neoclassical economists, which is the kind of thing, you know, the trouble is as an undergraduate, you learn general equilibrium theory. And when you do a PhD, you learn Sonnenschein-Matt-Vanderbrough. And that's arguably, that's a problem. And you've got, obviously, you've got lots of developments around general equilibrium. You had a move to partial equilibrium models

And the problem was always that of aggregation. How do you come up with a realistic model that moves from individuals to sort of society-wide modeling of how this might play out? And one bit of kind of impractical magic around that in neoclassical economics is to use the idea of the representative agent. So instead of trying to imagine how thousands and thousands of firms would behave in a model, you take one firm in a model and it's representative of all firms.

So in order to try and get around the problems of kind of mathematical chaos, modeling is always forced back to these highly reductionist sort of mechanisms and assumptions in order to try and make them practical. But again, it's sort of booby traps policy when policy is based on those theories, because in real economies, one firm isn't representative of all firms, right? We have enormous differences between firms, between sectors.

and the constraints that they need. The other thing that's worth noticing in general equilibrium is that, again, if we contrast it with planning, it is about the price mechanism. It's about the idea that the price mechanism is this kind of magic sorting machine. And you have to ask yourself what gets lost if you sort of think in those terms. And

What you're basically missing out is the production regime. You miss out all the challenges that real governments and real societies face around investment and innovation and employment, around corporate dynamics, corporate behavior.

So all of those things that are sort of on the planning table in the Soviet system, we're stripping out in our economic theory to focus on price mechanisms and rational actors within competitive markets and ideally perfectly competitive markets in order to bring excess profit taking there. So it's a remarkable way of unlearning all the things we learned in the post-war era about

about development, basically, about the nature and the complex, interdependent, evolving nature of economic development.

So there is a kind of process of organized forgetting in both methodologies, both in Soviet planning and in neoclassical economics. And there's another aspect to these being circular economies, which is, again, it's important not to caricature neoclassical economics. Economists make a distinction between so-called first best world and second best world neoclassical economics. It sometimes gets called neoclassical.

freshwater economics, which is associated with the sort of Chicago school and Friedman and the kind of real leaders of sort of neoliberal thought.

And the saltwater school and the difference there is that the most radical, and we can associate that with the most sort of right wing versions of neoliberalism, presume very idealized markets, right? They presume that people are well informed. They presume that markets are competitive if the state gets out of the way, right?

they tend to be very neglectful of the possibility of market failures. Most professional economists, right? If you look at the treasury in Australia or in the UK or, you know, international financial institutions, most professional economists

are so-called second best world economists. The way they think is that the idealized first best world of general equilibrium and perfect information, but this is utopian. This is not realistic. However, in order to carry on using mathematics and axiomatic deduction and the entire technique

What they argue is that these are nevertheless useful heuristics for trying to figure out how markets fail. So the idealized version becomes the benchmark for the development of theory around all kinds of market failures. So that develops a whole literature and a whole policy analytical toolkit for thinking about missing markets or failures.

Negative externalities like pollution, things that are not included in pricing that maybe could be brought into it if we start pricing nature, for example. They worry about incomplete contracting, asymmetrical contracts. So the players within contracting don't have perfect information or equal information. They'd look at collusion. They'd look at hold up problems.

all of these kinds of things. The problem with that is that's not actually any more metaphysically neutral than the fully idealistic version because it has this conceit that if you mend the market failures, you're mending the machine. You're reconstituting the connections of a perfectly functioning market. Now, the trouble with that is that would only be true if we lived in a machine closed system world where the past was a

accurate statistical shadow of the future.

And that's not the world we live in. We live in an evolving social world that's always becoming something else. And there's a perfect affinity there with the Soviet economic development, which is having come up with the model of the central plan that then failed to play out the way it was supposed to because of human imagination and incredible informational bottlenecks and unexpected events, exogenous shocks, you name it.

It's in the nature of the reasoning, as it is in neoclassical reasoning, that the assumption must be that what we're missing is information. So the later generations of Soviet economists spent their lives obsessing about how to get better information back into the plan.

Under the conceit that you could then make the plan work in this frictionless, perfect way, or even a halfway effective way. I mean, the ambition sort of declined over years, right? Let's just make the thing sort of function at all. But similarly, if you look at the intellectual history of neoclassical economics, so much of modern theory, not least around how we manage climate policy, for example,

is around mending informational failures. But there's a fundamental misconception in both systems from a philosophy of science point of view, which is that you can do that. The idea that we live in a computable world. And I think that's the most deeply dangerous utopian assumption in both theories, actually, because it leads us wholesale away from thinking in more strategic and precautionary terms

under radical uncertainty. And in reality, we live with radical uncertainty. Climate scientists know the trends in the ecological crisis, but because it's unprecedented, we don't know the timing or the magnitude of tipping points in the biosphere. But in the meantime, we think that the leading edge of regulating financial markets around the ecological crisis is

is mandatory disclosures around climate risk on the basis that they will converge on the correct pricing of risk, as according to the efficient markets hypothesis. And it's a really extraordinary conceit. It's superimposing the machine logic of neoclassical reasoning onto the biosphere in all its complexity and saying, yes, we can integrate that. We can calculate all the future risks around that.

and somehow converge on the internalization of those externalities in the way we price things. It's really outrageous. You would need a kind of godlike omniscience to be able to do that. But it's the way we're thinking about it now, even now. That's a very long answer. No, that was great. I was just thinking when you were talking about this system thinking of societies as some kind of machines, right?

It was a few years ago, I think it was like 10 years ago, I watched this documentary. I think the documentary was a BBC production by Adam Curtis, if I'm not mistaken. Shock. It was about economic shocks, yeah. And it was fascinating, I mean, shocking as well, when I was watching it in America in 1960s or 70s, if I'm not mistaken. They were doing economic planning and they were basically throwing dice. Literally, they were throwing dice and playing with numbers. I guess it was like a game theory, trying to come up with rules, right?

I was just shocked to see how they tend to think of society and how society works, given the enormous wealth of literature that was available kind of refuting this idea. And I don't think it's a new trend. I don't know much about the economic history, but I guess even a century ago, even in psychology, the founders of psychology thought that they could come up with these universal formulas, truths to predict human behavior, but it just didn't happen.

But I guess economists still kind of insist that it's possible. And I guess with every economic shock or like COVID-19, whenever something like COVID-19 happens, it's a complete collapse of all those economic theories. I mean, neoliberal economic theories mainly. You need the government to invest enormously to kind of save all these huge businesses. But again, we tend to forget that.

And that's all technically good. Maybe you wanted to add to this or? Well, just to sort of pick up that point, because it's one of the, so it's the sort of dark historical joke in the book that because Soviet and neoclassical economics believe that we are living in a computable world, that we can calculate risk,

to lead to meaningful forecasts because we can sort of frame the probabilities around the economic future as if it was somehow independent of nature, for example. So because of that, the crowning historical irony is that they converge on the same statecraft because if you believe we live in a computable world, then the logical statecraft is one of quantification.

It's one of quantification, output planning, target setting, the assumption that enterprises and firms are a priori rational, productive actors. They can't have sort of weird dynamics or authorities of their own. In fact, no sort of social sphere will go off in some internal culture of its own. So we are...

For 45 years in the more neoliberal economies, we've been using a statecraft that is basically sort of Soviet statecraft, but in capitalist form, you know, that's using price as the coordinating mechanism.

But as I get into in the middle of the book, which is about the real policy areas and where this has been applied, it leads to the actual recreation of Soviet planning structure. So part of the idea in neoliberalism is obviously that you want to shrink the state, that the state is a monopoly actor.

because it's conceived in purely economistic terms, not in historical terms or in terms of its real historical complexity and all its complex functions. So in neoclassical modelling, in so-called public choice theory, it gets reduced to a further...

firm, a monopoly firm that abuses all of those kind of monopoly powers. And so new public management in neoliberalism is the project to basically divest the state of as much power as you can and return it to what are presumptively efficient markets.

forms of coordination. So either through privatization, but once you've done as much privatizing as you can politically get away with, then you're in a world of public sector outsourcing and of delegated governance in governments where you're trying to create agencies within government that can be made either to compete with each other or to mimic firms through target setting and output planning. Of course, that's Soviet architecture.

The neoclassical theorizing around outsourcing was that you would get this efficiency gain from competing companies providing public services to consumer users, to end users. And this would be a kind of market interface and that would bring all the disciplines of the market to bear so that you'd get better services that cost less. That was the theory.

Because that's the only interface in outsourcing that you can model in a neoclassical way. So that's where all the theory of that was coming from. But when you're talking about publicly funded services that are being produced by private companies, the only actual economic relationship there, the only financial relationship there is between the central state or the local authority and companies.

And so what you're basically enacting there is Soviet enterprise planning. So you're making the state a giant of public procurement to companies. And so you're reproducing the Soviet enterprise planning architecture, but now with added profit taking. So one of the things that I look at in the book in terms of secondary education and the academy school system is,

but also in general in the kind of new public management outsourcing chapter, is how exactly we've reproduced the Soviet failures of asymmetrical information between the planner and the producing enterprise, and then how enterprises gain that rationally, how difficult it is to write complete contracts when you're in a service area that's very complicated, that has care in it,

It's very difficult to codify in health and in education. How do you codify many aspects of what you want schools to be able to do that are nevertheless not quantifiable? And if you start quantifying them, maybe you get really perverse incentives around teaching to the test and all that kind of thing.

So that's, again, a long digression on your point about quantification. But that's the point. It starts to go deep into the structures of the state and at the same time disables the capacity of the civil service and of local authorities.

To think in more three-dimensional terms, right? That if you get regulation... So we had a process in Britain called one in three eight, where for every regulation that government was to introduce, it had to calculate the net annual cost of business of that regulation and strip eight three regulations that were the equivalent net annual cost. And that was a regulatory rule across the entire country.

Every single central government department. And it's a kind of idiocy when you're looking at environmental regulation or, you know, regulation around fire hazards and cladding, because it was a contributory factor in the Grenfell Tower disaster in the UK.

To only think about net annual cost of business, you're stripping out the capacity to think about precaution, about the complexity of the sectors that you're trying to regulate, about the kinds of uncertainty that they face and how you might want to make those sectors resilient. You know, it's

In the NHS, the national health system, if you're looking purely at cost in the short term in a model, it makes a lot of sense to run hospitals hot so that you try and get 95% bed occupancy, which is great.

until you have not even COVID, until you have a flu outbreak or the novovirus or something like that. And at that point, you have hospitals that are actually breaking at the seams and that are no longer having emergency beds available for accidents and emergencies because they've run so hot, they've got no spare capacity. So we've a bit like how we've forgotten how to think about the complexity of economic development.

We've also gained a lot of avoidable ignorance about resilience and adaptability in organizations that are always and inescapably coping with uncertainty and incomplete information around the things that are coming down the pipe at them. And that's as true of corporations as it is of organizations.

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Gain skills you can learn today and apply tomorrow. Get ready to go from make it happen to made it happen and keep striving. Visit Strayer.edu/JackWelchMBA to learn more. Strayer University is certified to operate in Virginia by Chev and as many campuses, including at 2121 15th Street North in Arlington, Virginia. Speaking of that, when you were talking about the health system and all that problem with quantifying, again, it was, I guess, in the same documentary.

And I could be wrong. This is what I roughly remember, that police officers in the UK, they had to meet a certain quota. So they started arresting people for violations which they didn't used to because they had to meet a quota. Again, nurses or doctors, the quality of the health service they provided declined because they had to meet a larger number of people over a shorter period of time to prove they are efficient. So very much you could see parallels with this.

with the way, you know, economics work in the Soviet Union. And just that parallel, I'm not a huge fan of the late Roger Scruton, if I'm not mistaken. He hated anything remotely related to the left, but he did have that Christian ethic. So he did believe that the government has a role to play in helping

the poor the needy and i think in one of his writings he just very briefly you know compared that kind of harsh neoliberal economics of margaret thatcher to to a marxist or a stalinist system of central planning i think he made a brief reference to that

So he was critical of that aspect of it. And whenever I argue with my friends who are, you know, advocates of free market, I say, look, even Roger Scruton, that you really love because you hate the life, you love him. He also made the same point. But I'm glad that you wrote this book. So now I have a whole book to introduce today. One of the things we haven't talked about, which I do talk about in the book, is of course there are different reservoirs of freedom.

intellectual thought that go into neoliberal argument. The other main strand, apart from neoclassical economics, would be Hayek, would be the Austrian school. That's very different because Hayek was really a philosopher of knowledge, first and foremost.

And although he started out sympathetic to the neoclassical project, it was actually the theory of general equilibrium that disillusioned him about it and made him take a different path because he looked at general equilibrium theory much as he looked at developing Soviet socialist thought and said, well, just the informational constraints in this make no sense. For general equilibrium to work, all the actors within it would have to be

Perfectly informed, not just about past and present prices, but future prices in order to know what the perfect allocation for them would be again, sort of for all time. So he was kind of radically sceptical about that. And so his view of markets is is subtly different, which is that he.

He's basically arguing that markets are the least bad, the most capable mechanism for dealing with our inescapable ignorance. So the idea is that if we're all inescapably ignorant, if we all see through a glass darkly, which is a pretty tenable philosophy of knowledge position,

then the idea is that we can navigate markets with much more freedom

than if the state arrogates to itself the authority to know, as it were, to have more knowledge. And the Keynesian critique of that is it's not that states are perfectly knowledgeable, that they transcend the knowledge problem. It's that they're the organization that has the power, effectively,

to deal with the irrationality of markets, the fact that you get booms and busts in financial markets that state interventions could modify in a reasonable way. So it's not that Keynes had such a different view of knowledge. He also believes that we live in a world of radical uncertainty, but he was much more skeptical than Hayek that we could all navigate our way through life via the providential light of the price mechanism.

And Hayek has to end up being very selective in the sense that if you sort of ask Hayek, well, how do you get social order? It's not just going to be pure markets, right? He's not a bourgeois anarchist where it's just nothing but markets. He's basically arguing that it's almost a Darwinist argument that social order will come from the best social traditions.

from the sort of guarantees of property rights and sort of basic constitutional norms. But beyond that, he's looking for a very minimalist state on the basis that the best social traditions will survive and create order. And there's a great critique of that by John Gray, where he's basically pointing out that nothing upends social and cultural traditions as thoroughly as capitalism, right? They're not harmonious. One, it's extremely disruptive,

And also, speaking as a female author, I found it kind of almost charming, the idea that only the best social traditions survive, not those that are in any way...

you know, empowered by might or cultural power or sort of authority that may be less than sparkling for, you know, certain groups in society. So I think he's, as a critic of neotaskal economics and of Soviet economics, he's incredibly insightful.

But he takes a very odd step, which is to move from that criticism to a normative position, which is equally utopian. It's just a different kind of utopia. The idea that very deregulated free markets and highly stable, wonderfully functional social traditions will be enough to keep society stable in an era of radical technological development and endless evolution. I think it's very optimistic.

And you mentioned high and neoliberalism. So I'm keen to ask you about this question, which you discuss in the book, that they thought that they have the neoliberalism thought they had it had its scientific approach to economy.

But the new classical theory and new liberalism was used in the political agenda of the new right in the 1970s. So I'm interested to know how they use those economic theories, how they informed or, let's say, fed new right agenda in the 1970s. Yeah, it's a great question. I think it's one of the peculiar aspects of this utopia is that, well,

Well, one of the reasons in a way we don't see how totalizing, I'm not going to say totalitarian, but totalizing this theory is and how much it's embedded in the way we think about things is because a lot of the basic precepts have their roots in really quite inaccessible economic theory.

And so what's really important in the 1970s are these think tanks and these kind of transmission belts, if you like, that took a lot of the economic theory and then created these more sort of popular, if not populist, sort of narratives around it. And you see that happening in the US and the UK through the 1970s. Margaret Thatcher set up her own think tank in order to be part of that process in sort of changing the debate.

And a bit like Soviet thought, Leninist thought, the neoliberal arguments on the right have always been a kind of unstable combination of scientific arguments about the efficiency of markets versus, and at the same time, it's kind of charismatic arguments. And the charismatic arguments in the neoliberal case were very credible in the era of the Cold War because they were about the socialist Leviathan,

And the kind of threat of socialism, the idea that socialism was going to slowly but ineluctably erode and crowd out our liberty. And that we were in Britain in the 1970s, which was suffering a lot of structural shocks from, you know, emerging markets and inflation. You know, you have the Nixon shock, you have oil shocks, you have all kinds of big structural shocks.

shocks as competing economies start to catch up to the UK developmental level in manufacturing, for example, and compete. We have all of these things. And neoliberalism offers this wonderfully simple explanation, which is that there's too much state, there's too much government, and that we've crowded out. And this is the charismatic side, the kind of entrepreneurial, free-trained genius of

of the British spirit. So there's appeal to, you know, our sort of grand national past. And of course, that's writing out all of the colonial history and the naval supremacy and the racist violence that underpinned, you know, British economic success historically.

Anyway, conveniently setting aside all of those things and saying in a charismatic way, but drawing on theoretical promises from neoclassical economics, that we have an entrepreneurial spirit that has been crushed by the post-war order, which is infected by socialism.

So, you know, that's that's the argument there. And I think what's really striking is that obviously we had, you know, Margaret Thatcher won three elections followed by John Major. So we have this big, long period of transformation, according to the precepts of politics.

New public management, neoliberal policy, privatizing, outsourcing, but also viewing the bureaucracy as the real seat of power in an overly socialistic system. So the idea that you've got to deconstruct the power of the state. And of course, you've got a perfect mirror image there with Leninism, which is that Leninism, like Thatcherism, basically says, yes, bureaucracy is

bourgeois, you know, Thatcher wouldn't use that term, but bureaucracy is the real seat of power in the pseudo-liberal democracies. And of course, you have to oppose it because it basically blocked the way to your more revolutionary agenda because it's more empiricist and it's going to have concerns about what you're trying to do.

And so there's this perfect mirroring again in Leninist and neoliberal thought, which is bureaucracy is the real seat of power and the idealized constitution is one of a minimal state. And of course, in the Soviet system, you never get to the withering away of the state. But it was the point. I mean, the idea was that you would create democracy.

A socialist version of the bourgeois capitalist state, which once it had socialized everyone into socialist thought, would then wither away because it would no longer be necessary. You would end up with this kind of spontaneous communist state.

where planning would be no more complicated than kind of post office functions, you know, because everybody would understand the logic of the system and operate according to it. So you have this exact affinity, this exact isomorphism. Not surprisingly, really, because you're trying to convert the really existing historical state and its complex political economy into this kind of utopian form and

So you've got to somehow deconstruct that central state logic. So Weber, the idea of a rational, legal, modern state that you just need to cope with modernity, that's out of the window. You're in this critique. So exactly, through the 1970s, you have, and it's a very attractive agenda, right? If you read political economists in the 1970s,

who think in three-dimensional historical developmental terms about the British economy, they're basically arguing that Britain needs to recalibrate its whole economy and that's going to take a lot of investment, both in the public sector and in the private sector. You're going to have to go further up the value chain in your manufacturing sector. You're going to have to do lots of complex re-engineering and it's going to take taxation

to do it it's going to take investment in a serious way

And at the same time, you have this wonderful, simple panacea coming in from the neoliberal right, which is, no, you just need to dismantle the state, roll the state back, liberate markets, and you'll get this kind of revealed prophecy of self-sustaining, self-improving prosperity. But that's not what we've had. We've had rising levels of inequality, inequality

The UK has an investment famine at this point, both in the public and in the private sector. We have this thing called, that economic sociology is called financialization, where large publicly traded firms in particular have basically been cannibalizing themselves rather than really investing in their own sustainable development. So they've been paying ever higher profits and at the same time reducing their investment in

R&D, in high-quality employment, in technological improvements, infrastructural investment, all of those things. So you basically get a kind of hollowing out of the productive engines of the corporate economy by the maximization of shareholder value and a culture of profit extraction. And of course, in neoclassical, in first-best-world neoliberal reasoning, all investment

Sorry, all profit becomes investment. But one of the reasons for thinking that way is dynamic stochastic general equilibrium models and computational general equilibrium models of the macroeconomy can't include financial markets. Financial markets are often disappeared in this way of thinking about things.

But when John Kay did a review of banking several years ago, he found that only 3% of banking activity was going into the real economy. It's investment activity. And 3%, which is astonishing. So the vast majority of it was in much more speculative financial activity, which is highly lucrative, but it's not doing a lot for human development within the UK economy.

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That's astonishing and it's scary as well. And I guess during COVID, I live in Australia, when the banks released their annual reports during COVID, when the interest rates went up, people's financial situation deteriorated. Even in a relatively wealthy country like Australia, banks made record profit during that time, but nothing was really going back into real economy as you mentioned then.

I have another question, which is about, we touched upon the failures, let's say, of market now and then, neoliberal market. It's quite interesting that when you talk about UK's Conservative Party, they embrace strategies similar to what Soviet Union did when the neoliberal markets failed. Can you tell us what are some of those strategies when faced with market failures?

Failure, that is similar to late Soviet regime. And again, I sort of, you know, when I got to the final two chapters, which are about really the political consequences of systematic failures in the economic orthodoxy, you know, what

What has been the impact on party competition, on political culture, on public discourse of having 45 years of economic doctrine that has systematically failed to work in the terms by which it was justified? This is not quite equally but powerfully a problem for New Labour as well, because New Labour adopted the second best world position. The argument was you could get a third way, or

where, yes, Thatcher had been too utopian because this economics didn't understand market failures, at which point labor then becomes absolutely fixated on mending market failures at the microeconomic level, some of which led to improvements, but a lot of which actually leads to this strange phenomena of more regulation, more oversight, more synoptic targets. So you actually reproduce the Soviet...

later Soviet period of trying to solve informational problems again, which is that you develop these bureaucratic exoskeletons around the basically misconceived corporate structures that you've created. So, you know, again, you end up with not the best of both worlds, the best of states and markets, a lean state and a massively efficient market. You get the worst. You get the most rigid bureaucratic state that's lost its capacity to think strategically. And

Concentration, monopoly and kind of abuse of deregulation in corporate governance and financial markets. So if you have this and you have this long enough, you end up with a loss of public belief and faith in the promises of neoliberalism.

what Jens Beckert calls the promissory legitimacy of neoliberalism begins to collapse, just as it did in the Soviet Union, you know, by the 1980s, really no one's

You know, Christophe had argued that communism would occur by 1980, you know, but the state would have withered away and you'd get this kind of Judeo-Christian Eden, socialist version of Eden in which everything was sort of harmonious and free and everyone had an absolute ample sufficiency. But of course, nothing like that is happening by 1980. The state is at its most sclerotic. And of course, in Britain, we have the global financial crisis and then we have austerity.

So you have a really deep crisis in living standards and in legitimacy for the policies. But you basically have had multiple elections in which new generations of conservative MPs are coming in who are really schooled in Thatcherism. You've lost

by generation the one nation Tory beliefs of the post-war era that believe in, you know, that come out of noble-assidu-liege traditions, but basically believe that the state does have a role, but there probably isn't any such thing as a scientific economics that's kind of Burkean, pragmatic, sceptical, and that has a degree of traditionalist nature

faith, not least sort of Christian thought in it that would be about the need for consensus. So not as left wing as the Labour Party by any means, but really not like the kind of radical neoliberal thatch right argument. So that generation of politicians is moving out. There are a few younger ones who come in with that ethos. Someone like Rory Stewart would be like that. Probably Dominic Greed's

Grieve, David Gauke, they come from that one-nation tradition, but really crowded out by very committed neoliberals, who then find themselves increasingly unpopular. And so what they do is what the late Soviet Communist Party did.

which was to start using nationalism. Because if you use identity politics, it gives you an alternative combat task, right? It gives you enemies, foreign and domestic. It allows you to come up with mobilizing strategies that

that systematically divert attention away from your deep economic dysfunction. If you want an argument as to why the national health system is failing, oh, it's because there are too many migrants, even though actually the NHS is run very significantly by migrants.

extremely high skilled migrant populations without which it would collapse. Setting that aside, it's easier to do that than to admit the failure of your own policies over decades. So you end up with this sort of terrible ratchet effect, really, which I think we've also seen with the

evolution of the Republican Party in the US and ultimately the election of Donald Trump, which is that you have to give up the scientific economic, the sort of pseudoscientific arguments of your economics as the mainstays of your popular campaigns because they're no longer popular. So you have to move to the more personalistic, charismatic, scapegoating, populist arguments that focus on identity politics.

Because it doesn't force you to change your economic perspectives. And like the Soviet system,

We also have to remember that neoliberal institutional development over time has created a lot of vested interests in the status quo, both financial and corporate interests. Four out of the five biggest funders for the Brexit campaign, for example, had backgrounds in the financial sector. And a big motivation, I mean, one of the extraordinary things

And I'm not really joking. The argument to make in the book is that Brexit is an attempt at revolutionary completion. Basically, it's a last gasp attempt to get away from the regulatory constraints of the European single markets to sort of complete the patriotic revolution. So I would basically argue it's

It's an attempt at neoliberal Bolshevism after 35 years of failed neoliberal Menshevism. It's a truly radical project and it's worked out about as well as you would expect.

But what it's led to, as in the US, is an absolute divorce between the public political speech of the neoliberal right and social reality. You know, we've entered that exactly as the Soviet system did. We enter a kind of political theatre of the cruel and absurd as a way to try and deflect public attention from the realities of our socioeconomic

stagnation and failures and sort of open failures and I think the problem for the conservative right is exactly as it is for the GAP in the US as it was for the Soviet Union which is until those parties fundamentally reappraise their own most deeply held economic beliefs uh

There's no alternative for them but to go the route towards authoritarianism because there is not a legitimate democratic mandate for the economic programs that they espouse. And that's what I argue in the book. I argue that neoliberalism may begin in open democratic societies.

But if governments insist on pursuing it in the face of its own failures, it ultimately sets them on a course to authoritarianism. And the question is, what gives first? Because if you're a true believing neoliberal, you believe that the economy is the true republic. You believe the free market is the true republic.

And that democracy is only legitimate insofar as it elects people who understand that. And that's a fundamentally undemocratic idea because it's basically confusing your own normative political beliefs for a kind of universal scientific truth, just as true believing Soviet communists did, right?

It becomes a religious faith that can admit of no heresy, rather than just another political position in a functioning liberal democracy.

So I think we're at a really dangerous point, and I think America has overstepped that point. I think now they have a government under Trump that is supported by the financial and corporate interests created after decades of neoliberalism that mobilizes the language of bureaucracy as somehow communist rather than just a necessary part of a functioning modern state that

demonizes everything that is not sort of pro-corporate in that sense as somehow kind of radical far-left. But because this has moved, as the Soviets did, into the kind of more open kleptocracy, they're also abandoning principles of neoliberal economics in order to kind of shore up the possibility of oligarchy and so on, hence tariffs and the rest of it.

So you go from, so again, and I'm not really joking, you can see Thatcher and Reagan as the kind of Leninists, the true believers, but also politically brilliant in the way that Lenin was. They understood when to make two steps forward and one step back.

Then you have the clear failures of the new orthodoxy. Blairites are a bit like Khrushchev. They're coming in with a kind of trying to make a more inclusive version of the orthodoxy, a more technocratic understanding of the orthodoxy, but

In the meantime, they're continuing to implement the basics. Under New Labour, we were still decanting more and more public authority to the private sector, which then singularly failed to behave in the way that theory predicted that they would. But then after that, you get, as you had in the Soviet Union, you have a kind of neo-traditionalist reaction.

So you get a consolidation of the regime, a kind of abandonment of the idealism within it. So you get sort of the Brezhnev era. My penultimate chapter is called Neoliberalism, the Brezhnev years, which is the sort of recent conservative governments. But yeah, that's the real risk. I think it takes us to a threshold of authoritarianism and authoritarianism.

And I think what we're seeing with Labour under Starmer in the UK is that there are still a lot of Blairites within this government, and it still thinks in very neoclassical second best world terms. And that analytical toolkit is simply not fit for purpose for the scale of structural crises that the UK now has, which it has in almost every country.

economic sector and in every aspect of the state. And we have the ecological crisis on top of that. So the risk is that Starmer's Labour end up as kind of stretcher bearers, you know, the kind of ambulance chasing, trying to tinker at the margins of a system that needs fairly fundamental and radical reforms to

put it back into a virtuous cycle of human development and a more innovative private sector, a more functional financial system that actually has an interest in the real economy rather than just splicing off profits for an ever declining proportion of the population. So yeah, we're at a real tipping point, I think.

And it's sort of, I'm perversely optimistic. I'm not quite sure why. Because I do feel like it could go either way. I don't think it's doomed. But one of the reasons I wrote the book is I hope that if people understand that we don't live in a predetermined economic world, you know, we don't need to think of ourselves in neoclassical terms. We don't need to go around asking ourselves, have I lived?

am I optimized myself? Am I productive in my relationships? Have I invested enough in my work? Have I, you know, am I this kind of two-dimensional functional cog in an economic wheel? It's nonsense. It's a utopia. It's,

Part of how we free ourselves from thinking in these terms is to realize that we can and that we don't breach any natural economic laws when we say, yeah, maybe corporations need to have social responsibilities in addition to

maximizing shareholder value, right? Maybe they could have ecological and social duties written into their fiduciary rules. A bit like we expected in the post-war era. It's not like it's never happened before. It's what we used to do. British firms in the 70s used to reinvest 90% of their profits. And they don't do that now. It didn't, you know, it didn't...

So, you know, I think we've been trying to implement a kind of two-dimensional rationalistic machine model and expecting society to conform to it. And as long as we keep doing that, the more we're going to bend society out of its three-dimensional, imaginative, creative, cooperative self.

So, my very strong recommendation at the end of the book is let's get rid of this economic orthodoxy. I think it is done. And I think the longer we stay with it, the more harm we're going to inflict, not just on ourselves, but also on the biosphere on which we absolutely depend. I mean, Herman Daly.

It's quite nice to think of him as human daily. He argues that the economy is a wholly owned subsidiary of nature. And I think until we remember that, we're just going to get reminded of it in increasingly dramatic term. And it's another abject failure in classical reasoning that it can't integrate that fact.

But we really need to start integrating it. So that strikes me as a good basis for developing actually not a new economic science. The last thing we need is to say the old science is dead. Long live the new science. Almost the biggest lesson we need to learn is that in a world of radical uncertainty in which we are imperfect people in an imperfectible world,

with absolute limits on social science. What we need is analytical pluralism. We need different voices in the room. We need different perspectives in the room. We need the experience of people who are in the sectors that policy touches. We need much more inclusive policymaking from the ground up.

And it would be a win-win. It would help re-legitimize democracy in the midst of its deepening crisis. But it would also just make better public policy because nobody has a monopoly on truth. So you need to figure out ways.

of bringing different forms of expertise and experience into policymaking processes. And away from the center, again, one of the ironies of British neoliberalism as a critique of socialism is the British state is bigger and more centralized than it has ever been. More expensive, it's more bureaucratic, and it's bigger. And one of the things I'm trying to do in the book is explain how on earth that's possible. You could...

literally create the opposite of what you were promising at the beginning of the neoliberal revolution. When the game tips off, the NBA action is just beginning on FanDuel, America's number one sportsbook. Because FanDuel is your home for NBA live betting, however you want to play. Now is the perfect time to join. Make every moment more with FanDuel, official sports betting partner of the NBA.

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It's interesting. Most of the things...

that you've discussed and you've also outlined. It's already happening, the rise of nationalism. And I think it's that identity politics have become the battleground for different political parties. And that's a perfect way to deflect attention from real issues that matter, which is the economy. And people easily get dragged into these traps, let's say. They're trapped by these debates and they start

playing the blaming game, migrants, minorities, religious, sexual minorities, which is sad. And I live in Australia. It's not as bad as in the US, but you can see traces of that. You can see traces of such kind of, you know, victim blaming,

especially when it comes to issues such as housing, because it's one of the sectors that the Australian government has literally invested for long, long decades, for two or three decades, has completely ignored. And they have always tried to increase the population. It's a huge country, great resources, and can support and it can help economic boost, economic development as well.

But now they have realized that there's an issue. And whenever the media talks about housing crisis, it's the migrants, it's international students who are coming to the country. But it really discusses the real issue, which was that neglect in this sector and a lot of, even the money, when the money was invested, it was given to the private sector, which was not really efficiently invested in proper housing development. And I'm going to just end with one last question. I'm going to play the devil's advocate here.

You do see a lot of parallels between neoliberalism and what happened in Soviet Union. But the same old question, there's no other alternative. Well, communism collapsed, but as you can see, people predicted that capitalism would collapse, but it hasn't. It's still neoliberalism, despite all its problems, it's still the only viable solution, and it's still being practiced in many countries today.

What is your response to that? And how do you see the future of neoliberalism? Well, it's a really important question. And I think one of the sort of the double-edged sword, if you like, of neoliberalism occurring in open democracies

is that precisely because the UK is an open society, it's possible to have many alternative explanations of why things are the way they are. And that's very different from the Soviet system. In the Soviet system, because it was a total state system, near total, and employment, welfare, all of these things were organized through the state.

When the economy was failing, everyone knew why it was failing. Everyone knew it was the state because it couldn't have been anything else. So when the Soviet system, regardless of which country within either the Soviet Union or within the satellite states of Central Europe,

it was very clear where failure was occurring and where corruption was occurring, where, uh, you know, the, the real dysfunction lag, but it's in the nature of a market system where it's really, you know, a complex, open heterogeneous system in so many ways that we can come up with multiple different explanations of what's causing it. And so of course we do. And, and I think, um,

I also don't think it's a coincidence that you get a lot of conspiracy theory in late neoliberal regimes in the US, but also in the UK, and obviously why these are kind of actively peddled as well through, you know, they're also pushed. But I think one of the reasons they resonate is that in the post-war era, the political culture was very analytically pluralist, right? You had different parties that had very different agendas, right?

that offered very substantial choices in terms of economic and social and cultural policies. So people had real choice and representation was arguably kind of much more effective. When you have an orthodoxy that becomes to a striking degree, a kind of bipartisan consensus between the new, between sort of Blairite left and neoliberal right in terms of

The market is a privileged domain that shouldn't really have a lot of state intervention in it. When that fails, you have, because it's been associated with a language of science around the economics, it's really tricky because you're actually damaging public respect for science as such.

more robust sciences get damaged by association just because the terminology of science is, I think, damaged.

And conspiracy theories tend to be total explanations for social dysfunction unmoored from reality, right? It's really X. It's really Y. And that takes the same normative shape as neoliberalism. It's a total explanation for why the old society was bad and the new society is good. So they're kind of totalizing images. So I think we have a real problem, which is that

We have a public discourse which is very chaotic. We have a public discourse with a lot of conspiracy theory in it.

We have a mainstream government left-wing critique of the past that is very weak as a critique. It's basically still a technocratic critique. It's not really challenging the orthodoxy as such. And I think what that leads to in kind of the wider political culture is just an incredible amount of frustration and argument and disagreement between

about what's going on, you know, we're in the kind of maximum hiatus where everybody knows practically that things don't work. There's no agreement on why they don't work. Neither of the mainstream political, in fact, none of the mainstream political parties

have gone for a systematic critique of the last 45 years. So we're in this sort of strange interregnum. And in the meantime, there are, without a doubt, powerful lobbies in the vested interest created by the last 45 years who are very resistant to change. And it's a vertiginous political moment in that sense.

And I wouldn't call it resilient. I mean, that's, you know, it's a kind of resilience compared to the Soviet system because it's not such an open and shut case as to,

what's wrong, but it could go in a lot of different directions. Historically speaking, this is when ideas really matter. In periods of stability and consensus, then analysis and new ideas quietly trundle along with the consensus.

But in periods of radical instability like this, where there isn't a consensus, there's a lot of distrust, there's a declining faith in the political system as such, in democracy as such, then there's a lot of jeopardy. But the flip side of that is that there's also everything to play for. And we have a restriction in having a first-past-the-post electoral system.

which is not good in allowing new ideas and new critiques to come to the fore, you know, new ways of accounting for where we are. So I think one of the best things the UK could do that would kind of liberate the debate and our understanding of where we are would be proportional representation. But in the absence of that, it remains an interesting moment. One of the reasons I stay optimistic is that

The UK has an amazing amount of really interesting economic innovation from the ground up, partly because the state has been so dysfunctional. A lot of people have been developing coping mechanisms in the form of social enterprises and B Corps. Britain has the largest, fastest-growing sector of B Corps that are much more ecologically and socially interesting than normal corporations.

And so you have social enterprises, you have NGOs, you have a lot of local initiatives that are very innovative. So there's lots of innovation happening. One of the poorest local authorities, Barking and Dagenham, completely transformed itself over the last 15 years in a very radical way, rejected new public management and just kind of reconstituted itself. There's a wonderful article by Chris Naylor called Only We Can Save the State about the

that experiment in remaking local government. And they went from being nearly bankrupt and being nearly taken over by the far right in later elections to actively saving money and being one of the biggest builders of social housing in the UK within 15 years. So they absolutely turned it around. So it's not like there aren't great ideas on the ground.

But we need the mainstream parties to open their eyes, understand that they can carry on circling the drain governmentally and economically, or they need to start taking some risks. We're at a time where a bit of moral risk would go a long way. I think a bit of ethical risk-taking is where we're at. And we've done it before. We did it after the Second World War, creation of the welfare state.

I think we can do it again. It would be good not to wait for an absolute catastrophe before we do it.

I wish our politicians were just as wise as you are. And we sort of ended on a positive note. So let's keep it on a positive note when we end the interview. Dr. Abiy Ines, thank you very, very much for taking the time to speak with us. Really enjoyed reading the book and really, really enjoyed listening to you about the book. And I must just emphasize to the audience

listeners that what we did here, we just tried to cover some of the themes in the book. It's a fascinating book, lots of food for thought and also very much relevant to what's happening not only in England but also, I guess, in most liberal democracies around the world, America, Australia, New Zealand,

Europe. So I'm sure all the listeners will find something engaging to think about and discuss with their friends. The book we just discussed was Late Soviet Britain, How Materialist Utopias Fail, published by Cambridge University Press in 2023. Thank you very much for your time to speak with us on New Books Network. Thank you so much for asking me. It was really fun.