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The World Always Surprises Us

Many years ago, a friend of mine was admitted for investigation to the Hospital for Tropical Diseases in London. His tests seemed to take a very long time, and it was only as he left that a doctor told my friend that he had been retained in the hospital in order to occupy a bed. The Hospital for Tropical Diseases was then trying to demonstrate the need for itself (and therefore preserve its funding) by high bed-occupancy rates. Unoccupied beds and spare capacity were becoming anathema to hospital managers, for they themselves were being judged by bed-occupancy rates. An empty bed was taken as a sign of inefficiency or worse.

Since then, all hospitals in England have operated in an atmosphere of perpetual crisis as if total collapse were imminent. Capacity has been permanently stretched to the breaking point. Of course, there were reasons for the seemingly endless pressure on hospital beds other than the decision of managers to reduce their number the moment they saw an empty bed or supposed efficiency savings. The aging population (most medical effort being expended on people at an advanced age in their last years of life), the treatability of conditions that formerly were untreatable, and an insufficiency of nurses and other essential workers despite mass recruitment from overseas all contributed to the situation. Once considered essential aids to recovery, calm and quiet became impossible.

Hospital management even came to believe that perpetual crisis was a sign of efficiency, for it kept people on their toes and caused them to work to the maximum of their ability. On this view, spare capacity, even were it a possibility, would lead to complacency and waste. A necessity was thus turned into a virtue.

The exact tailoring of the number of hospital beds to the supposed demand, as if all future demand were precisely foreseeable, was hubristic. The assumption was that nothing unforeseen could emerge to upset the calculations. When Covid came, it was found that practically all intensive care beds were already occupied by patients with other conditions. The suddenly increased demand was met by reducing all normal activities, with consequences that have yet to be fully evaluated. Running hospitals on a factory, just-in-time basis turned out not to be very adaptable.

Something similar is now happening—or perhaps I should say might happen—with the country’s energy supply. If there were a severe winter, it is likely that the lights would go out and factories would close. Britain has become more dependent on such energy generators as wind and sun, but if the wind does not blow and the sun does not shine, alternatives will have to be found. In less than ten years, electricity generation from coal, which was about 25 percent of the total, has been almost prohibited, and nuclear generation has halved—all to save the planet.

Our political systems are set up so that wrong lessons may be learned from experience.

Meanwhile, the country has reduced its gas storage capacity to almost zero, on the grounds that gas can always be imported from elsewhere across the North Sea, from countries with gas storage facilities. But it turns out that those countries may themselves face shortages if the winter is severe, because (with the exception of Norway) they are dependent on Russian supplies, and Mr. Putin, who has been lectured and hectored by the Europeans—not, it is true, entirely without justification—may have the last laugh. If shortages come, it is unlikely that foreign suppliers of Britain will continue their exports. They will act, quite correctly, in their national interest. As honour was to Falstaff, a mere verbal expression, so international solidarity will be to countries in the midst of power shortages.

In other words, those who have decided the country’s energy policy have failed to foresee, or even to imagine that circumstances might change. They have proceeded as if the present moment were eternal; in their calculations they have discounted all strategic considerations.

The problem with strategic considerations is that they are not easily calculable, though the costs of taking them into account may be. The costs of not taking them into account are unknown, at least in advance. To maintain spare capacity is costly, but whether it was a cost worth bearing only future experience could tell. There might not be a severe winter, for example, in which case there will be no energy crisis, and those who denied the necessity for a reserve, or a Plan B, might consider themselves vindicated, or at least not blameworthy.

How far strategic considerations should affect economic policy is a matter of judgment, and judgment by definition is fallible. If they are given too much weight, they can lead to the featherbedding of industries that are then under no pressure to improve or become more efficient. But if they are not given enough weight, they may take their revenge by causing a crisis or even a catastrophe. This is especially true in geographically vulnerable countries such as Britain.

Our political systems are set up so that wrong lessons may be learned from experience. France in 2006 was extremely well prepared for a viral H1N1 epidemic that, in the event, never came. It procured a huge supply of effective masks which, however, were never needed and had to be destroyed when they were time-expired. The minister responsible for procuring them was pilloried for having wasted so much money, with the result that when, more than a decade later, such masks were required, the country had none and the government resorted to the claim that they were not needed. As soon as they became available, though, wearing them became compulsory.

It was discovered that, in the interval, the country had lost its mask-making capacity, and that it was utterly dependent on imports from China. The arguments for outsourcing were obvious: the masks were cheaper if made in China, and this was the beginning and end of the matter.

We have had a rude awakening to the fact that the world is more complex than simple principles or calculations allow, and that the exercise of judgment—always fallible, always likely to be proved wrong, never fully definable—is as necessary as calculation. The world will always surprise us.                         

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