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The arrogant Cnut prevails over our economic stewardship

As legend has it the 11th century English/Danish monarch Cnut the Great (aka King Canute) placed his throne at the edge of the shoreline and commanded the sea to halt its tidal wanings to spare himself from wet feet. The sea continued unabated and ultimately Cnut found himself washed over by the ocean. He is said to have jumped back from the icy waters exclaiming ‘Let all men know how empty and worthless is the power of kings, for there is none worthy of the name, but He whom heaven, earth, and sea obey by eternal laws.’

The story of Cnut is probably apocryphal, although a 12th century chronicler, Henry of Huntingdon, has anecdotal accounts of the event. The story is usually inveighed against the arrogant, assuming that Cnut thought his divinity was of sufficient power to halt the tide. Yet the allegory also has an opposite reading: that Cnut was nobly demonstrating the limits of his power as absolute monarch, reminding onlookers only a force as powerful as God could halt the tide.

Either way, Cnut’s story is a useful metaphor for modern day economic stewards to reflect upon when considering the regional imbalances in the economy. Many of the UK cities and larger towns, particularly outside of the south east corner of England, are in a state of long term decline. The tide of economic history has been lapping at the shores of industrial Britain for over a century. With each wave of the economic cycle the tide washes away more of the economic base, making revival more remote.

Population trends continue to show most northern cities hemorrhage economic capacity through internal migration to the south. What is left of industry in the north is so highly productive by comparative to earlier years that it takes just a small fraction of the labour to produce the same output. The shift in emphasis to the service sector has made little difference. While it is true everywhere has changed, this is also the the problem: change in the former industrial areas has to keep pace with change elsewhere. It just doesn’t.

James Derbyshire and myself have deployed the ‘Red Queen Effect’ as a metaphor to explain this problem. In Lewis Carroll’s Through the Looking Glass, Alice is compelled to enter a race with the Red Queen. Even though Alice and the Red Queen run as fast as they can the landscape appears to be moving with them:

‘Well, in our country,’ said Alice, still panting a little, ‘you’d generally get to somewhere else — if you run very fast for a long time, as we’ve been doing.’
‘A slow sort of country!’ said the Queen. ‘Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!’

This is the predicament that has beset the UK’s poorer regions. No matter what economic regeneration happens in northern cities and towns – and active intervention has been taking place since the 1930s – this decline continues. The effect of path-dependency, or the cumulative effect of previous decisions, is strong and this makes correction difficult or impossible. Even when relative growth in the poorer areas outpaces the affluent areas it is never enough to close the historical gap that has opened up in any meaningful timescale.

It was recently reported in the papers that Geoffrey Howe, now Lord Howe of Aberavon, proposed a period of ‘managed decline’ which included an evacuation of Liverpool’s population after the riots 30 years ago. It has been widely noted in the media and blogosphere, if somewhat sardonically, that Liverpool (and much of the UK outside of the south east corner) has been in managed decline ever since. It appears whatever the ambition and intent of economic intervention, the reality has always been some what muted by historical conditions.

Much hard work has been undertaken in trying to stem the tide of economic history. Much imagination and ingenuity has gone into tackling the structural realities and trying to do something that would ignite new course of history. Sadly, this has been like striking a match in a gale force wind.

While creative and adventurous, much economic stewardship of the former industrial areas, by central and local government and supported by the business community, has also been subject to a misguided optimism. The revival story of the north is as apocryphal as Cnut’s attempt to turn back the tide and as much dependent on anecdote as Henry’s chronicle.

I’m not suggesting the course of economic history in former industrial cities and towns could not be altered.  It is constantly being altered. The issue is how much alteration is needed over any given time period to deal with the extant conditions. To reverse the situation would need interventions of epic proportions equal to the cumulative effect of many decades of decline. If you want to change history, you must make history.

Current coalition policy of re-balancing is little more than wishful thinking, a misplaced faith in the potency of the private sector to step into the vacuum of investment and not enough of a plan to make for major economic change. A true re-balancing would need to see a fundamental policy shift at national level with a multi-decade programme that would see the London and south east export jobs and value to the rest of the UK.

The government is not afraid of long-term initiatives: the high-speed rail initiative will take 14 years just to get to Birmingham and at least 2 decades to arrive in the North. However, HS2 is pertinent reminder of limited thinking.

Yet the size of HS2 and other infrastructure projects is not large enough to ameliorate the gap that will be added between now and when the first passenger is transported let alone the cumulative gap of many decades. While the slow tidal erosion of productive capacity and its negative consequences for community cohesion remains much in evidence, the political vision which is needed to deal with the situation is very much absent.

So I remain reminded of Cnut the Great. Unfortunately very few of our political/economic/social leaders are willing to take the noble path and recognise their renaissance-inspired interventions are in vein: too little and in many cases too late. As a result we will not get an active programme of stewardship focused on transition and resilience. This should be a pressing objective of local economic thinking. Sadly, we’re in for more of the same: the arrogant Cnut prevails over our economic stewardship.

Garry Haywood
Garry Haywood is a partner at So-Mo, a network development company, and a researcher on local economies combining an evolutionary and complexity based approach.

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Chail Hyland
Chail Hyland
12 years ago

I agree with what you say, and it is very sad it will take two decades to modify a train link. Considering It took less than a decade for the Americans to land on the moon. The business mind-set has been not to manufacture products in this country. My father worked as a fitter in the 70s and 80s and he spent years stripping factories in the NW of plant to be shipped to the east, leaving third world countries to supply the cheaper unskilled labour to manufacture products, thereby reducing so called local cost and pollution. With India and China’s loose environmental controls the low cost will come back to haunt us. With the natural rotational path of the earth the current unprocessed pollution will not be far behind. ie Chernobyl with the welsh lambs, and the container of plastic ducks.

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