The economist Tyler Cowen is skilled at explaining how the world works and has an uncanny knack of spotting important trends. It’s why so many people read Marginal Revolution, listen to Conversations with Tyler and take what he writes seriously – especially his critics.
One recent idea – crucially raised before the pandemic – was what he called State Capacity Libertarianism. It articulated a change that many defenders of a more limited government have seen over the last decade or so – not least in themselves. While (now former) libertarians still acknowledge that a rapid increase in the size of the state can be very dangerous, many have shifted their thinking by acknowledging that high levels of state capacity are not inherently tyrannical. Tyler uses the examples of Denmark and Singapore.
The pandemic has made the issue of state capacity only more relevant. It’s not that larger governments have done well and more limited governments have done badly – it’s that the question of the size of the state is suddenly much less important to most people compared to how well it functions. It’s reasonable to demand why many East Asian countries, Australia, New Zealand, Germany, Estonia et al. have been much more capable at fighting the pandemic than many others – including the UK.
The issue of state capacity reared its head in a recent discussion the Founders Forum had with Camilla Cavendish (FT), John Micklethwait (Bloomberg News), Adrian Wooldridge (The Economist), Megan J Smith (former CTO under President Obama), Toomas Hendrik Ilves (former Estonian President), Daniel Korski (PUBLIC), Peter Mandelson (Global Counsel) and Andrew Griffith MP.
It’s worth reading the brief summary, but I want to move onto another point made in the final line of this article, namely: “It is now up to politicians to give entrepreneurs the ability to participate and be heard.”
It’s something you hear all the time, but how should entrepreneurs – or those supporting them – go about doing this? The webinar that the article relates to was organised by Founders Forum, an awesome organisation co-founded by Brent Hoberman. Brent is famous for starting lastminute.com and selling it for $1.1bn and is a textbook example of how to influence policies to support entrepreneurship. Just to give one example, while others were involved (including us, in a small way), the Future Fund, which is supporting many equity-backed companies through this crisis, may not exist if it wasn’t for Brent’s hard work lobbying for it.
So there’s your answer: build a tech company, sell it for a fortune, then give back! Of course, Brent’s incredible success affords him that luxury (although very few in the same position give back to the extent he does), but that doesn’t mean you can’t have an impact at the margin.
Another (easier) way to give back is just by engaging with us and other groups like us – sharing your insights on our webinars, surveys or the other calls for action I put out every week to help bridge the mismatched worlds of politics and entrepreneurship.
And if you’re looking to engage a bit more actively, you might want to consider becoming an Adviser. I say this now because we are just in the process of confirming evening virtual drinks for our Advisers (which have taken over from our dinners) with Bim Afolami MP, Bill Esterson MP, Katherine Fletcher MP, George Freeman MP, Alan Mak MP, Chi Onwurah MP, Alan Whitehead MP and Nadhim Zahawi MP. I don’t think the problem is politicians not being willing to speak to entrepreneurs – it just needs someone to organise things.
You can see our current list of Advisers here, find out more about becoming an Adviser here or just drop me an email to arrange a call/Zoom/Teams etc. to chat about it in more detail.
As Megan J Smith, CTO under Obama, said at the event: “Government is only whoever shows up.”
Tenth time lucky
Julia Lopez MP, the Cabinet Office’s new parliamentary secretary with responsibility for the Government Digital Service (GDS) has unveiled her vision for a single sign-on system through which citizens can access online services throughout government.
It’s a welcome ambition. Her speech was pitch perfect (at least for me): “[T]he key point and core principle is user control. We want to work towards a state where data use in government is set up to ensure that people, when they choose to, don’t need to restate their data on repeat occasions to different parts of government. Instead, data can be accessed, verified and stored when appropriate, in order to provide a proactive and low-friction service to the user.”
Since GDS’s creation under Francis Maude, Lopez is the tenth person responsible for it in little over five years. Let’s hope she is given time to see through this vision. It would certainly make life a lot easier for entrepreneurs if she could. For example, it is estimated that these sorts of reforms are saving business owners in Estonia around 12 million hours every year.
Tiers for fears
If you’ve yet to catch up on the Chancellor’s latest announcement, we’ve got just the Policy Update for you.
As research director Sam Dumitriu writes: “Currently, more than half of England’s population lives in areas in Tier 2 or higher. In his speech in Parliament Sunak addressed the ‘Tier 2’ dilemma. Until today, Tier 2 represented as Stephen Bush puts it 'the worst of both worlds” where “businesses … face significant restrictions on how they operate, but [receive] no economic support.' New measures will ensure that some businesses will no longer be paradoxically better off under Tier 3. The new measures announced also included expanded funding for the self-employed, businesses forced to close due to local restrictions and the Job Support Scheme.”
Read the whole thing here, sign up for future updates here and let me know if you’re an expert who wants to write these on your area of expertise (e.g. tax, visas, regulations), as we sometimes have outside authors.
Showing Up