Zero sum doom loops and the seven bin armageddon

Afternoon all,

Well if last week was quiet, this one was anything but. The Bank are done on rate rises* and Rishi Sunak is done with rushing on net zero**. Obviously everyone should have been done with Russell Brand years ago.

I’ll be honest, the PM’s net zero speech was problematic. Forget the content (see COTW for that), the timing was unforgivable: two days before TOTCs means all the best bin related jokes have been used up.

Despite that, his speech is our first read this week because of what it tells you about the politics of the year ahead, before we move off net zero to the real problem facing Britain: zero sum thinking.

Have a good weekend.

Torsten
Chief Executive
Resolution Foundation

*for now
**we were rushing?

Sunak speaks. You should read the PM’s speech because the actual text makes it clear what it was really about: a new approach to the election, rather than net zero. He’s right that net zero debates too often focus on target setting, not hard policy detail of target hitting – but his target tweaking doesn’t break that pattern. So, what was new in the speech? The political strategy. The PM’s trying to change who the public see as the incumbent in the coming election (and therefore to blame for the ‘things not feeling great’ thing). The RAAC fandango illustrates why Rishi Sunak would prefer that incumbent wasn’t him – so instead of running as one he’s trying to run against something: ‘politics as usual’ (PAU – which is meant to cover Boris Johnson AND Keir Starmer). His argument = PAU, not the Conservative Party, has got the country into this mess by not being straight on the tough choices we need to make. Where does the anti-PAU crusade go next? Probably riskier interventions on the triple lock/benefits and HS2. It might convince voters that the Conservatives represent change… or that they can’t get anything (net zero/a trainline) done.

Zero-sum stories. I was giving a talk in Chester last night, and someone asked a great question – why, when wages are flatlining because of a lack of growth, don’t we see more support for policies that, while disruptive, would boost growth/wages? This and the next read help give a better answer than I managed, focusing on the cause and consequences of zero sum thinking (the idea that any gains for one individual/group come at the expense of others). First is a paper on zero-sum thinking and politics. There’s loads of fascinating stuff, but the key finding for me is that, across 70 countries, experiencing periods of weak economic growth, especially when young, is associated with more zero-sum thinking. The opposite is true if you/your recent ancestors improved their lot, via upward intergenerational mobility. A low growth world is more zero sum, and living in that world for years (as we’ve just done) makes us think in zero sum terms, forgetting that things can just get better all round. Is it surprising then people don’t want change if they think it might bring gains for some but only via losses for others?

Missing motivation. …Zero sum thinking also reduces effort, finds highly complementary research, digging into systems of belief that discourage trying too hard. Disgracefully they equate this with the enforced humbleness in Nordic countries, with sayings such as “Du skal ikke tro at du er noget” or “do not think that you are anything”. The researchers show that the more “zero sum” a person is, the more likely they are to hold demotivating beliefs (e.g. not think hard work is central to success). But that in turn is associated with lower material welfare, educational attainment, and savings – not to mention simply being unhappier. And where do they find that such demotivating beliefs spread most easily? In environments that *actually are* zero-sum in nature. Coming back to that question from last night, the danger is we’re stuck in a zero sum reality/zero sum thinking doom loop. The job is to break out of it.

Renouncing recycling. No bin jokes for TOTCs this week but we’ve got a top bins read on the hottest question of the week: was there ever actually a plan to force everyone to have seven bins? The consensus is not, but for some balance read Tom Forth’s answer, which is maybe. Maybe yes because the Environment Act 2021 (note the ‘introduced by this government’ date) does say that in future councils would be required to collect seven different “waste streams” (appalling phrase meaning types of waste – I’m praying no actual streams are involved). But maybe no because the act is also clear there will be exceptions to needing to collect those “waste streams” separately (e.g. because of cost). It’s true the government hasn’t ever told us what those exceptions would be – which is the cause of ‘we must stop  the seven bins’ lobbying from councils, and why Tom is overly kind to the PM in saying seven bin Armageddon was possible (DEFRA themselves say it wasn’t). Anyway his main beef? Central government legislating for bins full stop. Is nothing sacred local anymore?

Incredible inflation. Who doesn’t love a silver lining – and it turns out even high inflation has one. We’ve talked a lot about the many bad things the current inflation shock is doing – trashing our living standards today, and devaluing our savings tomorrow. A new study notes people are broadly well informed about the way in which inflation eats into the value of their savings, they don’t realise that the same process has an upside for some of them: eating away at their debts. The researchers show that when punters are informed about this effect it perks them up and affects their economic decisions (e.g. they consume more now they aren’t as poor as they previously thought). So, take note people – your pay check may be shrinking, but so is your debt.

Chart of the Week

I said up front that most of the PM’s announcements were about changing targets rather than policy, but there were exceptions (including a welcome 50 per cent increase in support for installing a heat pump). Rishi Sunak announced he was stopping plans that would have seen “some property owners forced to make expensive upgrades in just two years’ time”. What he didn’t say was which property owners were affected. Why not? Because the answer is… landlords. The state of our private rented sector is a disgrace, which is why the government was previously planning to require landlords with highly energy inefficient homes to sort their properties out. What’s the result of that not happening? Higher energy bills/colder homes for tenants. COTW spells out who will be at the sharp end of this impact: one-in-four of the poorest families in England rent terribly insulated homes.