Theory and Practice
Will Hutton discusses the challenges of putting academic theory into practice.
One of my key roles as President of the Academy of Social Sciences is to bring academics and policy makers together.
In fact, it might surprise you to hear that civil servants are actually extremely keen to engage with researchers, they are keen to know what evidence is out there.
Can more be done at linking the two groups? Yes, for sure. Could academics maybe get their hands a bit dirtier to make delivery happen? Again, yes. But the overall direction of travel is good, and this is essential given that theory and applied research is so important in terms of driving policy making. As a social scientist myself I am intellectually drawn to the need for theory backed up by the strongest possible empirical data.
Take the recent Levelling Up White Paper. Chapter One is crammed full of unarguable data that Britain is a grossly unequal state across a range of measures. As it says, the UK has larger geographical differences than many other developed countries on multiple measures including productivity, pay, educational attainment and health. Such disparate levels of income and equality have huge effects on our everyday lives and the implications are phenomenal.
Levelling up
The levelling up agenda is actually an excellent and very current example of the challenges around putting theory into practice. For instance, the opening chapters go on to give a very good overview around how theories around what drives the economic growth of great cities are so significant. Britain basically needs cities outside London benefitting from these same kinds of incubator effects.
The question, of course, is how do we get there? More to the point, can we realistically get there without spending any money?
I actually think the depth and seriousness of the challenges facing the UK economy and our society are not fully recognised. Our levels of investment and living standards languish and we have got to get better at wealth generation and at marrying good theory with practice.
The levelling up agenda is an excellent example of the challenges around putting theory into practice.
Bad theory
Along the way we must also beware policies that are not theoretically informed and which can do a lot of damage.
A prime example was the banking crisis of 2008 and subsequent financial crash. One of the most damaging theories that emerged in the wake of 2008 was the need to reduce state debt as quickly as possible so as not to burden future generations. Somehow the narrative became that the deficit was the problem not the financial system itself that led to the problems in the first place. It was a narrative that extraordinarily the Establishment bought into.
A lot of economists were prepared to put their name to the subsequent austerity drive, but in my view the theory was as close to nonsense as I have ever seen in public life. There was simply no need for the levels of austerity that we saw over the subsequent decade and we are still living with the consequences today. For instance, it is very difficult to tell the story of the Brexit vote without linking it to austerity. Voters were saying that the status quo was intolerable, but in 2016 the EU was not the actual cause of the problems the economy was encountering at the time.
Of course, bad theory doesn’t just afflict governments, it can damage companies too. For instance, businesses that slash budgets in a short-term bid to save costs are all too often left rueing the long-term impacts on their productivity and profits.
Purpose
For companies though it is crucial that they have a wider sense of purpose. Admittedly you cannot say this for every company, but you can say it of enough businesses such as those in knowledge-driven sectors which are impossible to run unless they have a sense of purpose.
For instance, time and again we see how being ranked as a great place to work which flows from a commitment to purpose is linked to above average performance on most financial metrics.
Every business is on a journey with a sense of direction and purpose, but they will need to make adjustments along the way and everything is contingent on circumstance. Ultimately, it is not theory driving that but their over-riding sense of mission.
