Last week I gave a talk on the fall of the Soviet Union to twenty undergraduates at the IEA’s Future Thought Leaders Conference. Though the causes of the collapse were numerous, one of the USSR’s most acute problems was low agricultural productivity. By the 1970s, the average Soviet farm worker was only 20 per cent as productive as his American equivalent.
The communist leadership had a simple solution – tractors. Believing that the problem was a lack of mechanisation, the Soviet Union went from producing three tractors for every one sold in the US in 1976 to a ratio of 12 to one in 1986.
Yet agricultural production continued to fall behind the US. Collective farms produced little, not because they lacked farm equipment but because the system destroyed any incentive to produce a surplus. But because this was a politically inconvenient conclusion, the central planners preferred to let the tractors pile up uselessly in warehouses until it was too late.
I was reminded of this history listening to The New Statesman podcast on economic growth. Bridget Philipson, Labour’s Shadow Education Secretary, promised to establish a ‘National Skills Taskforce’ while Tory MP, Bim Afolami, discussed the importance of encouraging apprenticeships. Prime Minister Rishi Sunak has also emphasised skills training to boost productivity.
It’s understandable why British politicians love to focus on skills. The prospect of growth without making difficult and unpopular decisions cutting red tape, compromising Net-Zero or building anything will always be appealing.
The problem is that Britain already has a highly skilled population; we spend well above the OECD average on education, and our PISA educational results on reading, mathematics and science are among the best in Europe, beating more productive Germany by every measure.
We must face the reality that training more scientists will have a limited impact if there is barely any available lab space near our best universities. ‘Upskilled’ workers aren’t going to move into higher productivity areas if virtually all their wage gain is eaten up by higher housing costs. Training more apprentices isn’t much use if high energy prices cripple industry.
Unfortunately, like the leaders of the ailing Soviet Union, it seems our politicians prefer comfort blanket policies to tackle the real causes of our stagnation.
