“My plan will secure our status as a science and technology superpower, providing opportunity and spreading prosperity in every part of our United Kingdom”. So spoke Prime Minister Rishi Sunak during the Conservative election campaign in August[1]. During the same month, senior Conservative politician William Hague argued in the Times that ‘The next PM must deliver on the promise that Britain will be a scientific superpower: our prosperity depends on it.’[2] If he is right, there can be few more pressing macroeconomic questions for citizens and the state. But with pressure on budgets, will the Science Superpower plans survive? Can it be more than just a slogan?
Hague’s article referenced the recent House of Lords Science and Technology Committee report that asked whether the Government’s vision that the UK will be a ‘science and technology superpower by 2030’ was more than a slogan.[3] The report commended various initiatives, critiqued the lack of strategy, and the lack of a definition and metrics for what being ‘a science superpower’ means in practice, but did not question the underlying premise: whether such a goal is feasible, or desirable. Others are.
Commentator Sam Bowman describes this debate in the UK as between ‘Boosters and Doomsters’, groups that cross traditional left/right political divides, but split on whether policy changes can revitalise the U.K.’s growth. Boosters argue yes, if a serious attempt at doing so is made. Doomsters judge that policy changes would have modest effects and only ever be partially implementable in our current political economy.[4]
In macroeconomics, this is not a new debate. No-one disputes that technological advancement is the engine of human progress, of nations’ power and prosperity. In this sense, ‘Science Superpower’ is just a slogan recentring an old idea. The difficulty is in implementation. In macroeconomics, Science Superpower is largely a question of way and means, not ends.
Adam Smith, argued in 1776 that ‘a great part of the machines made use of in those manufactures in which labour is most subdivided, were originally the inventions of the common workmen…’[5]– centring invention as the product of workers, rather than corporations or the state. A debate that still resonated in the 1990s, when Japanese corporations, then in the ascendent, credited most of their innovation to worker-driven invention not corporate R&D.[6] Such a view also fits with Smith’s view that subsidies and tariff walls reduce the efficiency of the market, leading to reduced prosperity for all.[7]
Schumpeter argued that growing demand for welfare in capitalist societies would divert investment from innovation to protect people from the ‘creative destruction’ on which economic growth depends. Schumpeter was building on the work of Smith and other classical and neo-classical economists: the market was the way, and provided the means, not the state.[8]
A somewhat caricatured version of Smith and Schumpeter’s ideas was revived in the economic orthodoxy 1980-2016, oft accredited (politically) to Regan and Thatcher, holding that the market knows best, an extrapolation from Friedman’s 1970s essay that launched his eponymous doctrine, where the idea was that a company’s only duty is to its shareholders, to profit.[9] The Doomsters have it again. The market is what matters.
By the 1990s, twenty years after, publication, Friedman’s ideas had been pushed so far that their originator was coming to be regarded as relatively moderate.[10]
The response to an alternative perspective, introduced in 1990 by strategist and historian Edward Luttwak, is instructive. Luttwak introduced the concept of ‘geo-economics’. In this he anticipated a post-Cold War world in which the methods of commerce would displace military methods as the primary means by which states compete – where capital replaced firepower and where ‘the logic of conflict’ would be found ‘in the grammar of commerce’. Scientific and technological advancement would be the key metrics of national power. Going to war for resources would no longer make sense, since the most important resources were systemic: the ability to innovate could not be seized by force. Instead, we would see trade wars, competitive technology projects, competition in education systems and infrastructural development.[11].
With a caricature of Friedman and Thatcher’s ideas ascendant, the concept found limited favour in the UK. Hidden beneath the glittering generality of the coalition Government’s ‘openness’ as a moral good was the enduring influence of Vince Cable’s 1995 repudiation of Luttwak[12]. In Cable’s view, countries and trade blocs did not compete but cooperated their way to prosperity, and he dismissed geo-economics as “the pursuit of adversarial goals with commercial means”. In repudiating Luttwak’s geo-economic view, Cable was not arguing about policy differences but—as he recognised—advancing “a fundamentally different view of what matters and how the world works”. This view informed policy from 1997-2019 until the recent, abrupt ending of the ‘Golden Age’ of Anglo-Chinese relations.[13] Cable’s view is now demonstrably naive. China has consistently pursued an explicitly competitive, adversarial economic strategy,[14] one of asymmetric, or weaponised, interdependence.[15] From the early 2000s, Russia was doing much the same.[16]
As Mark Carney, former Governor of the Bank of England reflects in his book Value(s), quoting Italian Minister of Finance, Tommaso Padoa Schipoa, belief in the market had gone too far, ‘when we grant an entity infinite wisdom, we enter the realm of faith.’ But Carney says, while faith can guide life, it blinds policy. [17]
In launching the Science Superpower vision, the UK’s Integrated Review, its international and security strategy, also contained four references to Luttwak’s term, ‘Geoeconomics’.[18] In this, it can be seen as a repudiation of Cable and Friedman, and a nod to the neo-Keynesians. Science Superpower replaced faith in the market with a newly cleared-eyed approach to policy. It was more than a slogan.
Keynes’ arguments centred the need to sustain and stimulate demand as the engine of economic growth.[19] Keynesians, such as Robert Solow[20] showed that economic progress was more than just a function of labour and capital, but rather dependent on technological progress. Paul Romer’s model showed that per capita GDP, our prosperity as citizens, depends on the total stock of ideas in the economy. Ideas create positive feedback loops, in which old ideas create new ideas and so forth, giving increasing returns to the economy over time.[21] Romer’s work showed that persistent economic growth required Government intervention in R&D and supportive regulation.[22]
Such ideas may be ascendent in the Science Superpower debate, but how much UK policy can achieve may be limited by the macroeconomic concept of ‘convergence’. Convergence is the rapid growth as seen in less-developed economies when they get the fundamentals right, but which peaks and levels off once they match performance, converge, with richer economies. Beyond this point, there are diminishing returns to capital in advanced economies. Risk-seeking capital seizes the best high-risk/high-pay-off investments,[23] and so further investment is less and less productive, and money begins to flow overseas in search of profit. Consequently. modern growth theorists argue, rich economies get richer only by growing the global store of ideas and collective wealth.[24]
Some modern Keynesians on the Left agree with the Science Superpower ends but question its feasibility. Brett Christophers argues that for all the noise, British Governments remain on the side of the current economic model – rentier capitalism – as he calls it, corollaries of which are historically low government investment as a share of GDP in the UK, that continues to be below the OECD average, and has been consistently falling.[25] Christophers’ ideas owe more to Marx – that the problem is economic, but capitalist politics prevent its resolution.
Source: OECD National Accounts Statistics (database).
Consequently, for Christophers, the ambitions expressed in fellow Keynesian Marianna Mazzucato’s Entrepreneurial State, which sees State as the key actor in economic growth through the generation of new technologies, are right in theory but likely to be underinvested in, so wrong in practice.
Macroeconomics shows us that the Science Superpower agenda is not new, nor will it be easy to implement. It is a marriage of competing schools, an acceptance of the role of the state, and the potential for state intervention to do harm. There is a dynamic and rigorous evidence base on which to draw in attempting this synthesis. Former Science Minister David Sainsbury attempts just that in arguing for a reshaping of economic incentives and Government support in his Windows of Opportunity: How Nations Create Wealth.[26] More recent contributions such Anirudh Shah’s Great Tech Game: Shaping the Geopolitics and Destinies of Nations, also take a macroeconomic lens to understand where policy can and can’t help. Prof Richard Jones’ Soft Machines blog is another source of the kind of detailed analysis required to make Science Superpower more strategy than slogan.[27]
From Sainsbury to Soft Machines a broad trend is discernible in the Science Superpower debate. What these articles have in common with each other and macroeconomic analyses, is the centring of human agency and a recognition of the role of the state.
Cable’s recent book, Money and Power: the World Leaders who Changed Economics, is itself instructive – Cable centres on leaders, nations and their agency, not the market.[28] ‘Science Science Superpower’ is an attempt to move From Ideas to Growth[29], harnessing an emergent macroeconomic synthesis, and a repudiation of previous orthodoxy. Doing so requires engagement with the macroeconomic roots of those ideas, and the recent historical context – that shows just how difficult such policy is to implement.[30] More than slogan, but Science Superpower is not yet a clear and coherent concept. Whatever it is called, it’s guiding ethos must feature centrally in the forthcoming budget. As William Hague put it ‘our prosperity depends on it’.
References
Aitken, A., Foliano, F., Marioni, L.S., Nguyen, D., Rincon-Aznar, A. and Vanino, E., 2021. From ideas to growth: Understanding the drivers of innovation and productivity across firms, regions and industries in the UK. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1023591/niesr-report.pdf
Bowman, S. 2022. Boosters and Doomsters: the Real Divide in British Politics. Substack. https://sambowman.substack.com/p/boosters-and-doomsters
Butler, E., 2012. The condensed wealth of nations. Centre for Independent Studies. https://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/56fbaba840261dc6fac3ceb6/145933406
5124/Condensed_Wealth_of_Nations_ASI.pdf
Cabinet Office, 2021. Global Britain in a Competitive Age: The Integrated Review of Security, Defence, Development, and Foreign Policy. London. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975077/Glo
Cable, V., 1995. What is international economic security?. International Affairs, 71(2).
Cable, V. 2021. Money and Power: The World Leaders Who Changed Economics. Atlantic Books.
Christophers, B., 2022. Rentier capitalism: Who owns the economy, and who pays for it? Verso Books.
Carney, M., 2021. Value (s): Building a better world for all. William Collins.
Flanagan, K., Clarke, S., Agar, J., Edgerton, D. and Craig, C., 2019. Lessons from the History of UK Science Policy.
Ford, J., Hughes, L. 2020. UK-China Relations: from ‘golden era’ to the deep freeze. FT.
Friedman, M., 1970. A Friedman doctrine: The social responsibility of business is to increase its profits. The New York Times Magazine, 13(1970), pp.32-33.
Hague, W. 2022. It’s time to do for science what we did for sport. The Times, London. https://www.thetimes.co.uk/article/its-time-to-do-for-science-what-we-did-for-sport-f0hh0pmm9 go
House of Lords Science & Technology Committee, 2022. ‘Science and technology superpower’: more than a slogan? https://publications.parliament.uk/pa/ld5803/ldselect/ldsctech/47/47.pdf
Howell, M.J., 2020. Capital wars: The rise of global liquidity. New York: Palgrave Macmillan.
Ioffe, J. 2017. Russian Money in Silicon Valley. The Atlantic; Foxall, A. 2015. The Kremlin’s Sleight of Hand: Russia’s Soft Power Offensive in the UK. Henry Jackson Society.
Jones, C.I., 2021. Macroeconomics: Fifth international student edition. WW Norton & Company.
Jones, R. 2022. Soft Machines. http://www.softmachines.org/wordpress/
Keynes, J.M., 2017. The General Theory of Employment, Interest and Money: With, The Economic Consequences of the Peace. Wordsworth Editions Limited.
Krugman, P., 2020. Arguing with zombies: Economics, politics, and the fight for a better future. WW Norton & Company.
Luttwak, E.N., 1990. From geopolitics to geo-economics: Logic of conflict, grammar of commerce. The national interest, (20).
Romer, P.M., 1990. Endogenous technological change. Journal of political Economy, 98(5, Part 2), pp.S71-S102;
Romer, P.M., 2000. Should the government subsidize supply or demand in the market for scientists and engineers?. Innovation policy and the economy, 1, pp.221-252.
Sainsbury, D., 2020. Windows of Opportunity: How Nations Create Wealth. Profile Books.
Schumpeter, J.A. (1976). Capitalism, Socialism and Democracy (1st ed.). Routledge. https://doi.org/10.4324/9780203202050;
Smith, A., 1976 [1776]. An inquiry into the nature and causes of the wealth of nations: a selected edition. Oxford: Clarendon Press, in Todd, B., 1999. New ideas from dead economists: An introduction to modern economic thought. Penguin, Great Britain. p. 26.
Solow, R.M., 1956. A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), pp.65-94.;
Solow, R.M., 1957. Technical change and the aggregate production function. The review of Economics and Statistics,.
Todd, B., 1999. New ideas from dead economists: An introduction to modern economic thought. Penguin, Great Britain.
Tobin, D. 2020. How Xi Xingping’s ‘New Era’ Should have Ended US Debate on Beijing’s Ambitions. U.S.-China Economic & Security Review.
Vaz-Curado, S.F.L. and Mueller, A.P., 2019. The concept of entrepreneur of Schumpeter in comparison to Kirzner. MISES: Interdisciplinary Journal of Philosophy, Law and Economics, 7(3).
Wigell, M., Vihma, A., 2016. Geopolitics versus geoeconomics: the case of Russia’s geostrategy and its effects on the EU. International Affairs, 92(3), pp.605-627;
[1] Valero de Urquia, B.2002. Rishi Sunak pledges to make the UK a ‘science superpower’ if made PM. E&T, the IET, London. https://eandt.theiet.org/content/articles/2022/08/rishi-sunak-pledges-to-make-the-uk-a-science-superpower-if-made-pm/
[2] Hague, W. 2022. It’s time to do for science what we did for sport. The Times, London. https://www.thetimes.co.uk/article/its-time-to-do-for-science-what-we-did-for-sport-f0hh0pmm9 go
[3] House of Lords Science & Technology Committee, 2022. ‘Science and technology superpower’: more than a slogan? https://publications.parliament.uk/pa/ld5803/ldselect/ldsctech/47/47.pdf
[4] Bowman, S. 2022. Boosters and Doomsters: the Real Divide in British Politics. Substack. https://sambowman.substack.com/p/boosters-and-doomsters
[5] Smith, A., 1976 [1776]. An inquiry into the nature and causes of the wealth of nations: a selected edition. Oxford: Clarendon Press, in Todd, B., 1999. New ideas from dead economists: An introduction to modern economic thought. Penguin, Great Britain. p. 26.
[6] Todd, B., 1999. New ideas from dead economists: An introduction to modern economic thought. Penguin, Great Britain. pp. 26-27.
[7] Butler, E., 2012. The condensed wealth of nations. Centre for Independent Studies. https://static1.squarespace.com/static/56eddde762cd9413e151ac92/t/56fbaba840261dc6fac3ceb6/1459334
065124/Condensed_Wealth_of_Nations_ASI.pdf
[8] Schumpeter, J.A. (1976). Capitalism, Socialism and Democracy (1st ed.). Routledge. https://doi.org/10.4324/9780203202050; Vaz-Curado, S.F.L. and Mueller, A.P., 2019. The concept of entrepreneur of Schumpeter in comparison to Kirzner. MISES: Interdisciplinary Journal of Philosophy, Law and Economics, 7(3).
[9] Carney, M., 2021. Value (s): Building a better world for all. William Collins. pp. 134-135; Friedman, M., 1970. A Friedman doctrine: The social responsibility of business is to increase its profits. The New York Times Magazine, 13(1970), pp.32-33.
[10] Krugman, P., 2020. Arguing with zombies: Economics, politics, and the fight for a better future. WW Norton & Company. pp. 133-134.
[11] Luttwak, E.N., 1990. From geopolitics to geo-economics: Logic of conflict, grammar of commerce. The national interest, (20), pp.17-23.
[12] Cable, V., 1995. What is international economic security?. International Affairs, 71(2), pp.305-324.
[13] Ford, J., Hughes, L. 2020. UK-China Relations: from ‘golden era’ to the deep freeze. FT.
[14] Tobin, D. 2020. How Xi Xingping’s ‘New Era’ Should have Ended US Debate on Beijing’s Ambitions. U.S.-China Economic & Security Review.
[15] Chang, C. C., Yang, A. H. 2020. Weaponized Interdependence: China’s Economic Statecraft and Social Penetration against Taiwan. Orbis, 64(2), 312–333. https://doi.org/10.1016/j.orbis.2020.02.002
[16] Wigell, M., Vihma, A., 2016. Geopolitics versus geoeconomics: the case of Russia’s geostrategy and its effects on the EU. International Affairs, 92(3), pp.605-627; Ioffe, J. 2017. Russian Money in Silicon Valley. The Atlantic; Foxall, A. 2015. The Kremlin’s Sleight of Hand: Russia’s Soft Power Offensive in the UK. Henry Jackson Society.
[17] Carney, M., 2021. Value (s): Building a better world for all. William Collins. pp. 134-135; Friedman, M., 1970. A Friedman doctrine: The social responsibility of business is to increase its profits. The New York Times Magazine, 13(1970), pp.32-33.
[18] Cabinet Office, 2021. Global Britain in a Competitive Age: The Integrated Review of Security, Defence, Development, and Foreign Policy. London. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/975077/G
[19] Keynes, J.M., 2017. The General Theory of Employment, Interest and Money: With, The Economic Consequences of the Peace. Wordsworth Editions Limited.
[20] Solow, R.M., 1956. A contribution to the theory of economic growth. The quarterly journal of economics, 70(1), pp.65-94.; Solow, R.M., 1957. Technical change and the aggregate production function. The review of Economics and Statistics, pp.312-320.
[21] Jones, C.I., 2021. Macroeconomics: Fifth international student edition. WW Norton & Company. pp. 146-152.
[22] Romer, P.M., 1990. Endogenous technological change. Journal of political Economy, 98(5, Part 2), pp.S71-S102; Romer, P.M., 2000. Should the government subsidize supply or demand in the market for scientists and engineers?. Innovation policy and the economy, 1, pp.221-252.
[23] Howell, M.J., 2020. Capital wars: The rise of global liquidity. New York: Palgrave Macmillan. Pp. viii-ix.
[24] Jones, C.I., 2021. Macroeconomics: Fifth international student edition. WW Norton & Company. pp. 58
[25] Christophers, B., 2022. Rentier capitalism: Who owns the economy, and who pays for it?. Verso Books.pp.396-297.
[26] Sainsbury, D., 2020. Windows of Opportunity: How Nations Create Wealth. Profile Books. pp. 209-241.
[27] Jones, R. 2022. Soft Machines. http://www.softmachines.org/wordpress/
[28] Cable, V., 2021. Money and Power: The World Leaders Who Changed Economics. Atlantic Books.
[29] Aitken, A., Foliano, F., Marioni, L.S., Nguyen, D., Rincon-Aznar, A. and Vanino, E., 2021. From ideas to growth: Understanding the drivers of innovation and productivity across firms, regions and industries in the UK. https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/1023591/niesr-report.pdf
[30] Flanagan, K., Clarke, S., Agar, J., Edgerton, D. and Craig, C., 2019. Lessons from the History of UK Science Polic