Waiting on the market?

The UK government has finally declared a climate emergency. This is great news of course, but what does it really mean in practice? And what is this doing on a blog about law and economics?

The government in the UK has subsidised the purchase of new electric and low emission vehicles in a a bid to support and stimulate the market. But at the end of 2018, the government reduced the available subsidy rates, the makes and models of cars that were eligible, and capped the number of vehicles that could be purchased under the scheme. It’s really no surprise then that the rate at which electric and plug-in hybrid vehicles have been sweeping the market has fallen since the subsidy reduction. Indeed, sales of plug-in hybrid cars fell by one third in the period to April 2019. This is, of course, against the backdrop of a clean air crisis, a backlash against Diesel engines and emissions scandals, and the Extinction Rebellion protests calling for every tighter emissions limits.

So, it would make sense for the government to support the clean(er) transport industry, including electric and low emission vehicles. More to the point, the industry seems to be crying out for a level of oversight, investment, and general co-ordination. While some companies have started to set up charging networks across the UK, these are often not cross-compatible, resulting in up to 15 different types of charging points that drivers of electric cars have to navigate. What’s more, charging points tend to congregate in wealthier areas of the country, while residents in poorer areas struggle to find a single charging point. On top of this, most experts agree that if the electric car revolution is to take off, fast charging – or the ability to charge a car to 80% in 30 minutes – is essential for the success and sustainability of the network. The problem is that the national grid in the UK is simply unable to support the required wattage, or provide the increased levels of electricity required. We would, literally, face a melt down. The answer is a massive investment and overhaul of the underlying infrastructure.

So here we turn to economics. Once again, the problem is not technology. We have the knowledge, the tech, and the skills to make the green revolution happen. It comes down to economics.

The UK government has repeated its mantra that it is waiting for “the market” to step in and develop the charging networks for electric vehicles. Meanwhile, “the market” currently complains that there is insufficient basic infrastructure available for them to build on. This is not a new dilemma, and as Mariana Mazzucato has documented, a great deal of the tech that has driven progress over the last half century has developed out of state-funded R&D. Steve Jobs did not “invent” GPS or the touch screen; he took the technology and packaged it up in a shiny box.

It feels too obvious to state that a network of charging points for electric vehicles across the UK needs to be integrated and cross-compatible. It also feels obvious to state that this network needs to be connected to a grid that has the capacity to charge the nation’s cars, if we actually want people to move to cleaner, greener, options. It also feels like common sense to point out that this level of integration, planning, and investment needs to come from the state, as the only entity with sufficient oversight, patience, and funding. Or, at very least, it needs to come from “the market” working closely with the state to achieve clearly set targets that can establish a nationwide network that avoids duplication and achieves integration for the greatest value and usability.

The markets for broadband and mobile phone coverage are instructive here. There are still areas in rural Somerset in 2019 that have no mobile phone coverage. Understandably, where the market is left to decide where to invest, it will do so where the returns are greatest, and this is in towns and more densely populated areas. Given the basic underlying premises of business and shareholder value maximisation, this is to be expected.

The problem arises when ideology and a die hard belief in neoliberalism takes hold and denies the valuable role that state involvement can play. Writing in 1944, Karl Polanyi emphasised the utopian nature of the ideological divide between state and market, and criticised the belief that the free market was entirely self-regulating. He pointed out that both market and state relied on the other, and that some degree of state oversight and involvement was necessary if society was to avoid the worst effects of the free market. To use the example of the telecommunications failures, the government can step in at this point and regulate the operation of the market to ensure that everyone has access to broadband, whether they live in London or rural Somerset, and regardless of the cost to the company bidding for the contract.

At the same time, the market benefits from state involvement, and the examples of infrastructure such as an enhanced national grid, green power and a network of clean vehicle charging points on which the green transport industry can flourish is an archetypal example of where the close collaboration between the two spheres has never been needed more.

Group think, and the state of sociology

Five eminent sociologists recently reviewed the state of sociology for the Times Higher Ed. You can (and should) read the post here. It makes for interesting, if slightly depressing, reading. For those fond of the tl;dr approach, each of the five sociologists review their experiences of sociology teaching and research today, and recount the somewhat inferior position to which sociology has been resigned within the social sciences. This is for a variety of factors, but I want to dwell on two in this post; the diversity (or fragmentation) of the subject, and the unavoidable political accusations that are inevitably hurled at it (just see the comments on THE).

Fragmented sociology

Much in the same way as the social sciences have fragmented, drifted apart and become silos of endeavour over the past century, sociology has more recently succumbed to a similar fate. We have a sociology of sport, a sociology of arts and music, a sociology of x, y, and z that talk at, rather than to, each other. At the same time, we have economic sociology, legal sociology (or as it tends to be referred to in the UK, sociolegal studies), and then the discipline struggles to distance itself from anthropology and offer something different (apart from research into the present day and the present society).

But what does it really do? Why do we need it? And why is it fair to level the same accusations at sociology as we would at, say, a badly conducted physics experiment?

The political connection

There is always a political connection – politics is about social rules and beliefs, and sociology is about understanding these. They are two sides of the same coin. Look at the impact of Anthony Giddens’ “third way” in forging New Labour’s direction in the years after Blair’s election to power.

And this tends to be one of the main accusations thrown at sociology for why it should not be publicly funded in the same way that STEM subjects are – that we would be funding “socialists”, “Marxists”, and look where that experiment ended… (I paraphrase here). The comments in response to articles banging the drum for public funding of the social sciences generally have at least one reference to socialism.

But wasn’t the notion of the free market also derived from the social sciences (economics)? Hayek and Polanyi published in the same year (1944) but Hayek’s Road to Serfdom received much greater acclaim at the time than Polanyi’s The Great Transformation. Arguably, 99% of us are the poorer for this, and still feeling the impact of this twist of fate. But the politically motivated accusations against public funding of the social sciences recur consistently, and in a way that does not seem to apply to capitalism, neoliberalism or the rise and rise of neoclassical economics. These seem to be treated as the natural order of things these days, backed up by the received wisdom of neoclassical economics and the laws of social interaction it has “discovered”. Any investigation into performativity will tell you differently.

Can we study societies? No? Then why bother?

What is the point then? The point is that we need to shout louder about what sociology – and the social sciences more broadly – can do for society. About what it already has done. And about what we stand to lose without publicly funded research into the social sciences, both to understand society and to shape the type of society that we (collectively) aspire to. Do we value the rule of law? Do we value independence of the judiciary? Parliamentary supremacy? The free market? Labour regulation? Because these all started out as “good ideas” that someone had. You may not agree with all of these, but if we had never had “the social sciences”, chances are we would not even have “the State” now. We would still be living in a Hobbesian state of nature.

The response to this is that we have all these “good ideas” and solid institutions that we value now, so why continue funding investigations into how society works? This is a little like Francis Fukuyama’s end of history argument, that has been roundly debunked, notably by John Gray’s argument that history is cyclical. The things that we value need to be protected, otherwise they begin to disappear. And that means shouting loudly about what they have done for us, especially in the face of nationalistic, populist sentiment. Politics in the United States has shown that, and the neoliberal drive to set markets free and dial back the state in the UK has seen inequality rise and the safety net of the welfare state feel less secure than ever.

Why publicly funded?

Michael Burawoy’s chapter about the future of the university as a centre of knowledge production in an age of marketization and regulation makes some interesting points about the funding of research. Marc Spooner has also written an interesting post on the drive to publish and the perverse incentives now in place in higher education and research. Taken together, these posts provide an overview of the direction the sector is moving in, and the question that we keep coming back to is “for whom”? Who is paying for the research? Who is paying for the publications? And does this matter?

The Coburn Amendment in the US has seen a scaling back of public funding for social research into anything that does not directly apply to the national economy or the national defense. In Australia, the “national interest” test has prompted fears that curiosity-driven research will be pushed out altogether. In both Australia and the UK, there are ever higher demands for researchers to demonstrate the impact of their work and its benefit to society. The (somewhat flawed) riposte that is habitually trotted out here is Newton’s discovery of gravity; what is the impact of this? How does it benefit society? Newton would have failed under the current research excellence framework, and would probably not have convinced a funding body – let alone a Research Council – to pay him to study this.

The marketization and commercialization of the entire HE sector raises a number of questions that should probably be saved for another post. The point is that the application of the free market to the production of knowledge about society and for the good of society will produce skewed results. Yes, industry can and does fund social research – into how to market products and services more effectively, how to sell more, and how to understand consumer behaviour. Industry is unlikely to be interested in funding research into the big issues mentioned above – the big issues central to society. Why would they? These are things that we are mostly unaware of but impacted by every day. These institutions, beliefs and policies shape our interactions, our ambitions, and the options available to us in almost every aspect of our lives. The welfare state actively funds the companies to pay lower wages and remove labour rights through the very provision of the welfare state. The production of social knowledge is therefore, I suggest, a public good that should be publicly funded.