The curse of the intangibles - a short analysis of what might be going wrong in Britain
Britain was the first country to industrialise and then became the first industrial country to become post-industrial, its economy ever more based on ‘intangibles’ of knowledge and creativity.
But while the industries based on intangibles have created wealth and jobs, and against the odds turned around what at one point looked like inexorable relative and even absolute decline, they may in an odd way now have become our undoing. Because the strange thing that’s happened, which no one predicted, is that the world of intangibles and representations is starting to wreck the world of reality on which it’s based. We may, in other words, be suffering from an ‘intangible curse’ that’s corroding our nation’s ability to distinguish what’s real and what’s merely a representation.
Intangibles are such things as data, designs, words and images. They now dominate our economy: intangible investment long ago overtook tangible investment and, whether in the form of films, software, designs, musicals or inventions, they represent a large and growing share of GDP. The growth of this creative economy in all its forms has been one of the great success stories of recent decades, even if the benefits haven’t trickled down. I’ve been closely involved in this field for years, from designing some of the first city strategies for the creative economy in the 1980s to making policies in government through to acting as investor, funder and researcher at Nesta. So I don’t need much convincing of the value and virtues of intangibles.
My big concern, however, is that these fields, in which the representation of things is the reality, may now be corrupting other parts of British life. This is happening through four main routes:
The first is politics, where journalists have become the most powerful and influential figures in the land. The Prime Minister and his de facto deputy, Michael Gove, are clever and often engaging, but their main profession is as writers whose metier is the opinion column that offers a vivid and entertaining 800 or 1200 words but who never needed to worry too much about what would actually happen or indeed whether anyone would remember their words a month or a year later. Their world view now dominates our country – not the world view of managers, business leaders, engineers, trade unionists, lawyers, teachers or all the other groups who might have thought they were in the running (and who run many other countries).
In the world of comment and opinion representation is treated as partly autonomous from reality. So it’s not surprising that we get government by slogan and speech layered over a machinery that is ever more visibly broken. Moreover, because their natural home is in the world of representations, they prefer political battles that are essentially about intangibles too – attacking PC attitudes or cancel culture for example.
The second, related, field is the media, where a generation of owners, led by Rupert Murdoch, have proved that in a world saturated with information it is more, rather than less easy to spread lies and half-truths. They have encouraged a culture where what’s published may have only a distant relationship to reality; where morals are thought to be a sign of weakness; and where owners show a ruthless commitment to using their outlets to promote their own commercial interests. Again, representations are treated as independent of reality, an autonomous almost self-referential world. Fortunately, there are plenty of exceptions, not least the BBC. But the leading outlets in every market are now essentially subordinated to their owners’ whims; what effect they achieve matters more than whether what they say is true.
The third field is finance which has, notoriously, become ever more a world of representations with only a loose relationship to underlying value or reality, whether in the form of markets that trade vastly more value than the real economy, or whole new sectors based on futures, shorts, hedges, derivatives and so on: all essentially representations at two or more removes from the real value we experience as consumers. The UK, and London in particular, have done very well out of this shift in the relationship between finance and the rest of the economy. But it has, again, encouraged a looking glass mentality where representations can for long periods drift unmoored from any concrete reality.
The fourth field is social life, transformed in the space of a generation by social media. These have many virtues but their vices have also become ever more apparent – whether in spreading lies, promoting compulsive behaviours or circulating information that bypasses the many institutions designed to protect a modicum of integrity and impose a reality check on daily life (from trading standards to audit and accounting).
In all four of these fields representation and reality have been pulled apart. Indeed, you could say that Britain now has a new problem of two cultures, rather different to the one CP Snow wrote about in the mid-20th century.
On the one hand are the many millions whose working life is engaged with a very objective reality – doctors and nurses curing and caring; engineers; builders, plumbers, police, farmers all doing things that can’t easily be fudged and faked, and learning to respect the realities they work with, whether they’re human bodies, the land or physical things (I'm now based in an engineering department at UCL, so very much surrounded by people who learn to be humble in relation to external reality).
On the other hand, are a much smaller group whose job it is to fashion things out of thin air.
The latter are now in charge, though not the latte-drinking, metropolitan PC brigade but rather a parallel, reactionary wing, rooted in the public schools, Oxbridge and the media, who like to think of themselves as rebels but are in many ways even more of a detached elite than the cosmopolitan bourgeoisie they disparage. They are classicists and literary types; scribblers and bloggers; erudite and articulate; curious about the world though largely ignorant of such things as how buildings are built or how software is written. Their views have mainly come from their social circle and reading rather than from direct experience, let alone historical experience.
Their rise has transformed the Conservative Party. For most of the last 150 years Tory governments were full of business leaders – usually men – who had run mines, manufacturing, breweries and banks – and were single-minded in pursuing their own interests and also good at spotting bullshit a mile off. Edward Heath fought in the Second World War. Margaret Thatcher trained and worked as a chemist. The current leadership group, by contrast, have spent their whole lives in the intangible miasma of politics and media and have now succeeded, remarkably fast, to pull asunder the age-old links between the Conservative Party and business interests.
Their success means that Britain may be going through one of the strangest acts of national self-harm seen in recent history. They succeeded in achieving Brexit against the warnings of most of the business elite and now, having departed the European Union with only a sketchy agreement in place, have left the UK looking increasingly weak relative to the big powers of our time, especially the US which will be utterly unsentimental in getting the best possible trade deal they can, but also Russia (whose 'intangible' strategy of a 'permanently operating front through the entire territory of the enemy state, as well as informational actions, devices, and ... actions of informational conflict', as set out by General Gerasimov in 2013, is working rather well). Meanwhile, having cut our links with the EU, we are now also quickly cutting our ties with the key economic superpower of this century, China.
Despite airy talk of creating ‘Singapore on Thames’, the UK now has no very evident economic strategy: it’s unclear which sectors are expected to drive growth in the next few years and, despite welcome talk of levelling-up, no one can articulate how this will be achieved. Indeed, although our journalistic leaders are good at talking in vague terms about reform and transformation, when you dig a bit, there's not a lot there.
This is the world of the Wizard of Oz rather than Machiavelli. The shocking truth may be not that there is a cunning, evil plan, but rather that there is no plan at all. Indeed, one of the big surprises is how little sense of direction the government has. In the past civil servants could at least deduce what was wanted of them from Thatcher, Major, Blair, Brown and Cameron. But, beyond Brexit, the instincts of this government are impossible to guess, and civil servants struggle to work out when they should take the rhetoric seriously, which has left the direction of travel not so much intangible as indecipherable.
I don’t doubt that at some point the Conservative Party will rebuild itself, possibly becoming a more conventional Christian Democrat-style party under someone like Rishi Sunak and ditching its current leaders as unceremoniously as it once ditched Margaret Thatcher.
Whether or not that happens, however, I wonder if historians will see the current shift, which is disrupting Britain’s core institutions ability to distinguish representation and reality, as an odd revenge of the world of the intangibles, a kind of ‘intangible curse’ that may perhaps be appropriate for the world’s first post-industrial nation. I only hope I’m wrong.