Speech to Launch 2015 Prosperity Index

On Monday night, I gave a short speech marking the launch of the 2015 global Prosperity Index. In truth I was merely the warm-up act for Iain Duncan Smith. The video is below and I’ve provided a transcript of my remarks underneath.

The video starts with Sian Hansen, the Legatum Institute’s Executive Director. I’m at 1min50. Ian Duncan Smith begins at 8min15.

My remarks:

Welcome to the Legatum Institute’s Winter Reception, to mark the launch of the 2015 Global Prosperity Index.

We’re delighted that your all here. Chances are, if you a reasonably familiar with the Legatum Institute then you may well know of our Prosperity Index. For the benefit of those who are new – and as a refresher for those who are not – I’m going to spend a few minutes explaining what this thing is, and why it’s important. And then I’ll hand over to Iain Duncan Smith who will say a few words.

What is the Prosperity Index?

One way of looking at the Prosperity Index is that it is a data-rich, complex, and comprehensive way of ranking the nations of the world.

I could tell you that it includes 142 countries, covering 99% of global GDP and 97% of the world’s population.

I could tell you that for each of those 142 countries, the Index includes 89 individual indicators spread across 8 categories.

(The maths geniuses among us may have worked out that this adds up to more than 12,000 datapoints in any given year).

I could tell you that we use a combination of objective data and subjective data in order to capture a comprehensive measure of global prosperity.

I could tell you that this year Norway comes top; the UK 15th; and the U.S. 11th.

And all of that is true. But it’s not the whole story. In fact it’s not even the main story.

Because the Prosperity Index – fundamentally – is about people. It’s about how individuals in these countries experience their lives. It tells a human story. The charts and the graphs that point upwards tell us that, overall, conditions for people in those countries are improving.

And so yes, the Prosperity Index does tell us something about the world as a whole, but it’s about the individuals in those countries.

Why Produce a Prosperity Index?

Put simply, the Prosperity Index is an answer to a problem. The problem is this: the way we have traditionally measured the ‘success’ of nations is too narrow. Traditionally we use measures national wealth to determine success. Of course wealth is important but it’s not the whole picture. GDP is an incomplete measure of societal progress.

But don’t just take my word for it…

Simon Kuznets – the economist who created GDP…

The welfare of a nation can scarcely be inferred from a measurement of national income.

Nicholas Sarkozy, former French President…

It is time for our statistics system to put more emphasis on measuring the well-being of the population than on economic production.

Robert F Kennedy – speaking in 1968 – bemoaned the use of economic measures to assess national progress.

…the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.

Kennedy concluded by saying,

it measures everything in short, except that which makes life worthwhile.

And of course the American Founding Fathers included the “pursuit of happiness” as one of the fundamental tenets of the Declaration of Independence.

A little closer to home…

David Cameron…

I do think it’s high time we admitted that, taken on its own, GDP is an incomplete way of measuring a country’s progress.

And the list of quotes like this goes on and on.

To summarise: GDP can only tell us so much. It can tell us the average wealth of a country but it can’t tell us how that wealth was created.

It can’t tell us whether the citizens of that country are free.

It can’t tell us whether the government of that country is corrupt.

It can’t tell us whether children in that country have to walk 10 miles to go to school, or whether the education they receive when they get there is any good.

And it can’t tell us anything about the strength of social capital in that country.

Guess what folks? The Prosperity Index can!

The Prosperity Index gives us a broad perspective of our progress. And that’s important because the information we have affects the decisions we make. If we want governments – or indeed anyone – to make the right decisions (decisions that increase prosperity), they need to have the right data.

As the economist Joeseph Stiglitz put it (far more eloquently than me): what you measure affects what you do. If you have the wrong metrics, you strive for the wrong things.

We believe the Prosperity Index provides the right metrics in order that we might strive for the right things.

And that, in a nutshell, is what the Prosperity Index is – and why we do it. It is the definitive measure of global progress.

Please do take a copy away with you. The results this year are genuinely fascinating, often counter-intuitive, and of nothing else the report itself is laced with beautiful info graphics!

Before I introduce Iain, I’d like to make a special mention to the team here at Legatum who are responsible for the Index. Each one has worked heroically in recent months to produce the Index and once I’ve mentioned them all, perhaps you would all join me in thanking them in the traditional way. They are: Stephen, Harriet, Alexandra, Augustine, Fei, and Abi.

Iain Duncan Smith is the Secretary of State for Work and Pensions. As well as founding the Centre for Social Justice, he has been the leader of the Conservative Party and the Member of Parliament for Chingford & Woodford Green since 1992.

One of the governments big success stories of the past 5 years is the way it has turned around the British economy and in particular seen so many people get back into work. Much of the credit for that lays with Iain, and in particular the vision and leadership he has brought to the DWP. Although I’m sure he’ll be the first to admit there is still much work to be done, the story so far is quite extraordinary.

Secretary of State, it’s great to have you with us. The results of this year’s Prosperity Index validate many of the policies you and your department have been pursuing over the past 6 years. We’re delighted to have you here to help us launch it tonight. Ladies and Gentlemen, Iain Duncan Smith.

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Moving on

A little bit of news from me…

On 1st December, after nearly 7 years with the Legatum Institute, I will be leaving to join the Centre for Social Justice (CSJ) as Chief Operating Officer.

LI-CSJThe decision to leave Legatum has been a very tough one to make. When I joined in April 2009, we were about 10 people rattling around a very large office. Since then, the organisation has grown in both size and influence – it’s been a privilege to have played a part in that.

The CSJ is an organisation I’ve long admired. In recent years it has consistently been one of the most influential think-tanks in Britain and through its high-profile campaigning and rigorous research it has helped to put social justice firmly on the political agenda. I’m thrilled to be joining an organisation doing such important and worthwhile work.

Finally, I do want to say a huge thank you to everyone at Legatum who has made the last 7 years so enjoyable. I’ve made some wonderful friends who I will miss dearly. I won’t name you but you know who you are!

Review: Us, by David Nicholls

I had no intention of reading this book. Fourteen days ago I’d never heard of it – or the author. My planned holiday reading consisted of Great Speeches of the 20th Century, a John Grisham, and a book about The Book. But on my first night on holiday I noticed its bright red cover on the bookshelf and casually picked it up to read the first few pages. It grabbed me immediately.

Us - David NichollsActually, I was persuaded before I got to page one. The quotes from newspaper critics on the front/back cover were extraordinary: ‘I honestly can’t imagine loving a novel much more’ The Sunday Times; ‘A sad, funny, soulful joy’ Observer; ‘I was having to ration myself for fear of coming to the end too soon’ Daily Mail. With recommendations like that, I dived in…

The story is about Douglas Petersen, a middle-aged scientist struggling to cling on to his wife of nearly 25 years, the beautiful Connie, an artist, and his teenage son, Albie, a sulky, spoiled teenager. After Connie informs Douglas that she wants a divorce, Douglas convinces himself that the upcoming summer family holiday – a cultural tour of European cities that he has researched and planned meticulously – is his opportunity to win them both back.

The story is split between the present day as the Petersen family move across Europe – starting in London, then on to Paris, Amsterdam, Munich, Venice, Florence, Siena, Madrid and finally Barcelona – and various key moments from Douglas and Connie’s life over the past 25 years (how they met, fell in love, got married etc.).

Douglas is naive, optimistic, dull, predictable, old-fashioned – all the things that Connie is not. She is beautiful, artistic, free-spirited, with a wild side and a colourful history. I wanted to love Douglas – and at various points through the book I did. He’s charming, funny, very warm, affectionate and he loves Connie. But as the story continues, it becomes apparent that Douglas is one of life’s losers. Socially awkward, uncomfortable, an unnatural father, a difficult husband and particularly ill-suited to Connie, which becomes increasingly obvious as the story progresses.

This presents a dilemma for the reader: should we be rooting for love to win the day and for Connie to stay with Douglas, or should we accept that they were not well-matched in the first place and that an amicable separation is the right course…?

At different points in the story I found myself wanting different outcomes. In roughly the first third of the book I desperately wanted Douglas to succeed but somewhere around halfway through I found myself thinking, ‘maybe they’re not right for each other after all…maybe they should separate’ which felt a bit odd.

On the face of it, a novel told by a man trying to resuscitate his failing marriage doesn’t sound like a page turner…but it really is. The tour through Europe provides plenty of twists and turns to keep the pages turning. But what keeps this book really interesting is the wonderfully understated, perfectly timed wit that laces each and every page. The humour is subtle, clever often very dry, and written perfectly.

Despite the humour and the wonderfully described European cities, the undercurrent to the whole book is the question of whether Douglas and Connie will stay together; will the ‘Grand Tour’ be enough to convince Connie to stay? Will Douglass win back the love of his life and redeem himself in the eyes of his son?

Without giving away the ending, I will say that I was left slightly disappointed. Not necessarily with the outcome of the story but, surprisingly, with the writing itself. After 416 pages of exquisite writing, the final 30 pages seemed rushed and lacking in detail, as if the author had a word limit he was working towards which arrived too soon.

Don’t get me wrong, the book is superb – including the final third in which Connie heads back to London leaving Douglas alone to navigate various European cities. But when I finally put it down (on the final night of my holiday) it was with some disappointment that the final few pages hadn’t been a little more nuanced and drawn-out. I wanted more (perhaps that’s a good thing?). But I guess this is a minor niggle after what was an incredibly enjoyable read.

I enjoyed this book immensely and would recommend it highly. I’m not a regular reader of fiction (see my planned reading list above!) but I’m very pleased to have stumbled across this one. I think I’ll take a look at Nicholls’ other books

Links of the Day…

A selection of articles that I have enjoyed over the last few days…

How to be a judge – Spinning Hugo
https://spinninghugo.wordpress.com/2015/06/28/how-to-be-a-judge/

Key Figures In British Engineering History Who May Or May Not Have Led A Secret Double Life. Part 1 In A Series Of 1 – Why Miss Jones
http://whymissjones.blogspot.co.uk/2015/06/key-figures-in-british-engineering.html

With style and a dash of daring, the new SNP MPs rise to battle for their own little corner – Chris Deerin
http://www.dailymail.co.uk/debate/article-3142819/CHRIS-DEERIN-style-dash-daring-new-SNP-MPs-rise-battle-little-corner.html

It’s Time to Legalize Polygamy – Fredrik Deboer
http://www.politico.com/magazine/story/2015/06/gay-marriage-decision-polygamy-119469.html?ml=m_po#.VZGgEflVikp

They’re Trying to Be King of the Mormons – Matt Canham, Thomas Burr
http://www.politico.com/magazine/story/2015/06/romney-huntsman-mormon-rivals-119515.html#ixzz3eOnKXoN2

Michael Gove on Justice

michael-gove-legatum

Image: Legatum Institute (www.li.com)

Michael Gove gave his first speech today in his role as Secretary of State for Justice and Lord Chancellor. Speaking at the Legatum Institute, Mr Gove set out some big picture proposals, giving an indication of his direction of travel for the coming months/years.

While there was little in terms of specific policy detail, his speech did offer some insight into his vision both for the legal system and for his approach to his role. Here are few of my take-aways:

1) A change of tone. I’ve long been a fan of Mr Gove. I am a supporter of his education reforms. However, much of his good work as Education Secretary was overshadowed by the tone and manner in which he approached his role. His adversarial approach saw him do battle with a whole host of established figures within the education system. I’m sure that much of this was unavoidable given the reforms he was championing but it seemed at times he deliberately sought-out a fight and relished the confrontation. His speech today was of a very different tone indicating that he would not be replicating his former approach. He cited and praised numerous senior legal professionals highlighted the good working relationship he has with them.

2) A Robin Hood justice system? Several times during his speech, Gove hinted that he would like to see the wealthiest legal firms ‘contribute’ more than they currently do, in order to help the poorest in society have better access to justice. Gove was careful not to get drawn into the specifics but hinted at a light-touch solution – such as encouraging an increase in pro bono work done by the big firms – rather than heavy-handed legislation or taxation that would compel them to do so. This is undoubtedly a worthy ambition…making it work (including getting buy-in from the big law firms) will be very tricky.

3) Working with – not against – the system.  Several times Mr Gove stressed that he would be working with the legal profession rather than against it. He stated that during his first few weeks in the role he has felt supported by the profession and will aim to be guided by it. He stressed his good relationship with the Lord Chief Justice, as well as his warmness to the proposals within Lord Leveson’s Review of Efficiency in Criminal Proceedings.

It’s early days but it seems like Gove is keen to embrace reforms that are coming from – and are supported by – the legal profession (very different to the head-on battles that characterised his time in the dept. of Education). In answer to a question about the existence of a “blob” within the legal system (followers of Mr Gove’s earlier work will be familiar with this term!) he stated that he has not identified one in the legal profession…yet!

4) Court closures. Gove was clear that some courts will have to close. What will the money saved be used for: simply absorbed into the wider departmental cuts or re-invested back into the legal system…? Again, refusing to be drawn on specifics, Gove stated that various options are on the table, although he did say that the Treasury is sympathetic to his case for re-investment into the system rather than straight cost-cutting.

Speaking with lawyers, think-tankers, and journalists after the speech I noted two common themes: first, positivity about the themes of the speech. Second, scepticism about how Mr Gove plans achieve it all. And that’s the whole ball game. It’s one thing to set out what you want to happen, it’s quite another to deliver it. Time will tell whether he can. I’m sure an anxious legal profession is watching and waiting.

The full text of the speech is available here: https://www.gov.uk/government/speeches/what-does-a-one-nation-justice-policy-look-like

Video here: http://www.li.com/events/what-does-a-one-nation-justice-system-look-like

Hillary vs…?

Hillary2016Which two movies provide the best insight into how the coming US Presidential Election will play out? This was the question posed by Jacob Heilbrunn, Editor of The National Interest, at a recent Legatum Institute discussion.

Political movie fans might suggest Primary Colours, the anonymously authored account of Bill Clinton’s 1992 campaign against George H. W. Bush. Or perhaps The Ides of March (2011), the tense political thriller which sees an idealistic Ryan Gosling get caught up in the dirty side of politics while working for a presidential candidate played by George Clooney. But Heilbrunn offered neither of these.

Instead, Heilbrunn cited Election (1999), the little-known indie movie that sees a tenacious and devious Reese Witherspoon running unopposed for school president, stopping at nothing to get what she wants. This, said Heilbrunn, provides insight into what Hillary Clinton’s campaign for the presidency might look like.

The second movie, for Heilbrunn, is the recent Kingsman (2014) in which an elite spy agency recruits a young, unrefined, untested street kid into their training programme (think James Bond mixed with Johnny English). The agency mirrors the GOP while the established central character (Colin Firth) represents Jeb Bush—the safe and obvious choice. The young, untested recruit could be any number of Republican candidates including the like of Ted Cruz, the maverick libertarian Senator from Texas who, among other things, wants to abolish the Internal Revenue Service (IRS) and introduce a flat tax rate.

Following Hillary’s official announcement earlier this month, it would seem inevitable that she will secure the Democratic nomination, potentially unopposed (very few Democrats will want to stand in front of the Clinton juggernaut). When it comes to predicting who will secure the Republican nomination the smart money is on Jeb Bush. Bush has huge fundraising capability combined with a formidable infrastructure of advisors, supporters, and donors—the Bush ‘machine’ is perhaps only rivalled by the organisational infrastructure of the Clintons, which makes for a potentially fascinating showdown, one which will be very well-funded on both sides.

But is Jeb Bush a shoe-in? Not necessarily, says Heilbrunn. Another likely option is Scott Walker, the current Governor of Wisconsin. Walker is most well-known for facing-down the labour unions in his state and for surviving a recall vote in June 2012, only the third vote of its kind in US history.

Another reason why Bush is not a certainty comes down to a complexity of the US Presidential election process in which would-be candidates have to appeal to two separate groups of voters.

On the one hand there is the party “base” (what in the UK we’d refer to as the grass-roots). The Republican base tends to be very socially conservative and more activist in its approach and holds a lot of power when it comes to selecting the party’s nominee. “The lunatics aren’t quite running the asylum but they are very close to the keys”, explained Heilbrunn.

Then there is the national electorate who are less conservative and more populist in nature. This presents a conundrum for GOP candidates who, if they want to secure their party’s nomination, need to present themselves as ultra conservative in order to win the base, only to row-back to the centre ground thereafter. This is a problem that former Republican nominee Mitt Romney knows well after struggling to convey authenticity on several high-profile policy issues during his own campaign.

The same problem exists for Jeb Bush. He advocates policies which don’t sit comfortably with the base of his party, most notably in education where Bush advocates Common Core—the introduction of national academic standards which requires an active role for the state in education—and on immigration where Bush wants to offer immigrants a path to legal status if they “work … don’t break the law, learn English, and contribute to society”. In light of this, Heilbrunn was asked how he thinks Bush is planning to win over the base of the party with policies like these tied around his neck? Simply put, he’s not, was Heilrunn’s surprising answer: “Bush’s aim is to survive the primaries…mauled.” And this certainly reflects reality given how Bush is showing no sign of amending his positions on some of these more unpopular issues.

Back to Hillary. Heilbrunn discussed how a Hillary Clinton Administration may differ from the Obama Administration in which she served for five years, as well as how much she would differ from the man who sat in the Oval Office between 1993-2001 (with whom she shares a surname). Heilbrunn offered a suggestion of a divide within the Democratic Party with those who favour a return to the ideals of the first Clinton Administration marked by a robust foreign policy, traditional social values and, of course, a strong economy. This group stands in contrast to those Democrats who are generally more socially liberal; favour a reduced role for the US abroad in terms of foreign policy, and who played such a vital role in electing Barack Obama in 2008.

One of the most intriguing questions about a Hillary presidency is what role Bill Clinton would play in her administration in his capacity as First Man (or is it First Gentleman…or perhaps just Mr President…?) To this, Heilbrunn offers a tongue-in-cheek response: if Hillary becomes president, one thing will certainly be true: “Bill will have a greater role than her staff would like”.

This article first appeared here.

What the Electorate Really Wants

Cam-MiliThe Conservatives and Labour are fighting polar opposite campaigns. In the blue corner, the focus is on the strength of the economy. The red corner has prioritised the importance of the NHS. One common theme unites both parties: both David Cameron and Ed Miliband want to be placed in charge of Britain’s future prosperity.

Yet, however hard they try, neither side can break the deadlock as poll after poll shows the two parties neck and neck in the race to Downing Street.

Mark Twain once said that history doesn’t repeat itself but it often rhymes. This is certainly true of election campaigns. It’s “the economy, stupid” is the infamous phrase issued by Bill Clinton’s chief strategist, James Carville, during Clinton’s successful 1992 Presidential campaign. And this mantra seems to have been adopted by Tory strategists who are hoping that the economy will be the issue that convinces voters to back David Cameron on 7th May.

Labour, on the other hand is pinning its hopes on the health service. The NHS is a national icon and is – if you believe the polls – the single most important issue on the doorstep. By committing to increase the number of nurses and decrease GP waiting times, Labour is hoping this will be the issue that convinces voters to back Ed Miliband.

Without doubt, a flourishing economy which leads to more jobs and higher wages is a key part to the future prosperity of the country. The state of our healthcare system is also extremely important. But part of the problem for Cameron and Miliband is that neither leader has quite understood what prosperity means to people.

That is why the Legatum Institute asked leading pollsters YouGov to ask the public what prosperity means to them. The results that are published today are startling and could go some way in explaining why neither of the main political parties will be able to win a majority in two weeks.

Firstly, it is clear that the British public do not think economic growth is the be all and end all to a prosperous nation. Nearly half of people questioned (forty-five per cent) think public safety is more important than GDP. Only eight per cent of people – and remember this is a poll of 2,000 people of different ages, income groups, and voting intentions – think a stronger economy is more important than feeling safe. Yet crime, personal safety and security have barely featured in this election campaign.

The same is true of education. Forty-one per cent of voters think that a good quality education system is more important than economic growth in determining the UK’s future prosperity. Interestingly, there is a big gap here between the views of Conservative and Labour voters. Only a quarter of Conservative voters say that the quality of the education system is more important than economic growth, compared to fifty-five per cent of Labour voters.

The poll also found that fifty-one per cent of people thought the ability to start your own business was more important to the prosperity of the nation than economic growth. The numbers rose to fifty-seven per cent when you look at how would-be Conservatives answered the question. There is little doubt that the Conservatives have made a lot of noise when it comes to their record on job creation – two million new private sector jobs is a fantastic achievement – but the public want to know how a future government will enable people across the country to become their own bosses.  The long term economic plan aside, we haven’t heard a huge amount of detail when it comes to encouraging a new generation of entrepreneurs.

The results of the Legatum Institute survey should provide food for thought to all of the main parties in this election. Voters of all stripes want to hear about more than the economy. They want a positive vision of how schools and hospitals will help shape our country’s future prosperity. They want a government that will prioritise public safety and encourage aspiring entrepreneurs.

With most opinion polls showing a deadlock between Labour and Conservative and with only two weeks to go until the nation votes, time is running out for either of the major parties to distinguish itself from the other. Maybe, just maybe, a change of tactic is required – one that takes account of how the electorate defines prosperity. This could determine whether it’s Cameron or Miliband who is given the keys to Number 10 on the morning of 8th May.

This article first appeared here.