Living on Thin Air: The New Economy 
by Charles Leadbeater.
Viking, 244 pp., £17.99, July 1999, 0 670 87669 0
Show More
Show More

A few years ago, in the mid-Nineties, the Independent attempted to halt its decline with a bold stroke. For the first time in the history of journalism a national newspaper sold itself as a think tank pamphlet. Two of those hired to fill senior editorial positions, Charles Leadbeater and Martin Jacques, were ex-Communists who had wound up their party and formed Demos, a research centre aligned to Tony Blair’s New Labour project. Geoff Mulgan, a former Trotskyist and director of Demos, became a contributor to the paper’s opinion pages, as did a strange young man who had changed his name from Keith Ashworth to Perri 6. Hacks have a strong craft consciousness: they regard all senior editors who have not proved they are tough enough to cover hard news as effete and overpaid timewasters who will bring ruin on a newspaper. To make matters worse for the leftish reporters on the Independent, our new masters’ ideas, in so far as they could be understood, appeared to be as reactionary as those of the right-wing press. Yet however hard we tried to oppose, our hostility was muted and unsatisfactory. The Demos crowd didn’t talk like Tories. They appeared to care about inequality and rejected accusations of complicity with Thatcherism with bewildered impatience. The very notions of ‘left’ and ‘right’ were dead, we were told. In their place was a modern paradigm which lay in the tiger economies of the East, much celebrated for a couple of years – until they had the bad manners to collapse. In the end, it was the tone of voice, rather than what was said, that jarred. Leadbeater and the rest had lost their faith in socialism, but in their conversation you could still hear the sharp accents of Marxist teleology. The gap between ‘is’ and ‘ought’ was hardly worth arguing about. History was moving down the tracks; questioning the inevitable was pointless. After being given a long lecture in this vein, an old hand staggered out of an editorial conference. ‘These people used to go to Moscow and say, “I’ve seen the future – and It Works!” ’ he bellowed. ‘Now they go to Singapore and cry: “I’ve seen the future – and Gosh!” ’

In claiming that history is on his side, the idoliser of globalisation lays himself open to the charge that he is trying to rig the battle of ideas. By presenting his politics as a natural order rather than a debatable preference, he skips away from honest debate. Of course, he may be right. His opponents may be the unwitting occupants of Trotsky’s dustbin, wasting their lives on dreams as impossible as restoring the Bourbons. The seriousness with which he deserves to be treated depends, therefore, on the success of his description of the world; on what he means by ‘the modern’.

Leadbeater left the Independent, after confirming the reporters’ fears about the adverse effects of policy-wonking on circulation. He became a management consultant, author and adviser to Peter Mandelson. Living on Thin Air is, for the most part, a celebration of hip and chaotic capitalism. It is written in the regulation giddy style that Thomas Frank and the Baffler school in Chicago have dissected so well. Once again we are presented with the lives of the saints of middle management, Leadbeater’s magnificent pilgrims are full of daring. They struggle for personal fulfilment and venture capital. They are thwarted by hopelessly square organisation men who cannot innovate and would have rejected the Beatles, the personal computer and Christopher Columbus’s first voyage as utter lunacy. But they don’t give up. They struggle, they sweat blood, they network in coffee bars until – at last! – they get the power and the page lead in the Financial Times; the glory and the marketing budget. ‘It is only by treating people like Drayson and Bellhouse as heroes for creating wealth from knowledge’ – Paul Drayson and Brian Bellhouse are both medical inventors – ‘that Britain will develop a fully fledged entrepreneurial culture,’ Leadbeater puffs, as if Thatcherism had never happened, and Britain was not a country so infused with the corporate spirit that Richard Branson is the first citizen of choice, according to opinion polls, for the unavailable post of president of UK plc.

If boosterism and gee-whizzery were Leadbeater’s only faults, I would wish him luck and pass his book to the Oxfam shop. In normal times, he would join Charles Hardy and Tom Peters on the business seminar circuit. But Living on Thin Air is more than just another set text for corporate retreats: it is a business plan for the British political class. What distinguishes Leadbeater is not the quality of his thought but the eminence of his backers. Chris Patten describes the book as ‘intellectually fascinating ... a fund of insights’. A professor at Harvard Business School claims Leadbeater has found a Fourth Way – to confound those of us who have yet to penetrate the mysteries of the Third. Blair says his friend is an ‘extraordinarily interesting thinker’ whose book ‘raises critical questions for Britain’s future’. Mandelson maintains it ‘sets the agenda for the next Blair revolution’ and commends him as ‘the sort of intellectual that is useful to government because his head is firmly in the real world’ – an unintentionally appealing image of Leadbeater as bottom-waggling ostrich. The author himself is no less grandiose. He writes that ‘Living on Thin Air is a blueprint for what a radical modernising project will entail in years to come.’ To those who wonder why they should prefer his unoriginal and contentious description of modernity as a computer-driven global knowledge economy to its many competitors, he replies: Believe me because I am the future. Modernity is me.

From the first page, the startled reader learns that for this middle-aged member of the insular, high bourgeois world of metropolitan New Labour, the personal isn’t political but world-historical. Leadbeater begins with a statement of ‘where I am coming from’. When people ask him what he does, he finds it hard, perhaps understandably, to ‘come up with a clear, concise answer’. The best he can do is to say he is a ‘knowledge worker’, one of the people who live on their wits – a helping hand to Mandy here, an op-ed on the lessons of Silicon Valley there. His possessions are the essentials of a portfolio life – ‘several computers, cable television, a microwave, two mobile phones ... the Internet’ and a ‘people carrier’. If the rest of us get it right, all these could one day be ours; indeed will be ours, because there is no alternative to becoming Leadbeater. He explains what the experience will be like. Although he is not yet 40, he has ‘already had several mini-careers’. Life is harsh and he ‘sometimes marvels’ at the risks he is taking, until he realises that surviving on contacts and creating and selling knowledge is all he, and we, can do. Secure careers manufacturing solid goods and reaping crops from the earth are vanishing. Soon the world will be filled with programmers ‘providing service, judgment and analysis’; manipulating information – and each other. ‘We are all in the thin air business these days.’

Modernity has its discontents. ‘The kids are perplexed by my lifestyle. They like my being around, but part of them would quite like it if I had a proper, dependable job to go to in an office, like other people’s dads.’ But kids can be an asset as well as a nuisance, allowing us to access the key Third – or is that Fourth? – Way text for the coming century. We’re Going on a Bear Hunt by Michael Rosen and Helen Oxenbury won the 1989 Smartie Prize for juvenile fiction. Bear Hunt, as policy intellectuals familiarly call it, is the ‘unlikely starting point’ for an answer to the query Leadbetter poses in his opening chapter: ‘How to find greater security in an environment as hostile as the modern world?’ Rosen and Oxenbury know. They have produced one of the young Leadbeaters’ ‘favourite children’s books’, he tells us. ‘A family sets out to find a bear, only to meet a series of daunting obstacles: deep mud, a cold river, a dark forest, a violent storm. At each of these the family chants: “We can’t go under it. We can’t go over. We’ll have to go through it.”’ Leadbeater is so impressed by this advice that he repeats, it in his concluding sentences. It is the maxim he wishes us to take away from the book.

His mother, too, can be used to define modernity. She toiled in the kitchen ‘as a daughter and a wife when she could have been studying for a degree or starting a business. The lengthy learning process that lies behind my mother’s roast beef with crispy roast potatoes and Yorkshire pudding was made possible only by a social division of labour in which men went out to work and women stayed at home.’ Alas, his mum is now redundant and the craft of cooking has become as anachronistic as the craft of journalism. Women may work now but we have ‘fast food restaurants’, ready-to-cook ‘chilled meals from Tesco and Marks & Spencer’. Most wonderfully, we also have Delia Smith, ‘who explains much of what the knowledge economy is about’. Leadbeater is too busy ‘to learn at first hand what makes her chicken in sherry wine vinegar quite so tasty. Instead, I can read her recipes.’ They prove that ‘globalisation is good for our palates’. All over the world, profits are going to the writers of recipes that can be reproduced – just like Bill Gates’s software! – while their readers are acquiring knowledge not just of cooking, but of hundreds of trades without a tiresome and costly apprenticeship. Globalisation isn’t just tasty, he says. ‘Globalisation is good.’

Then there’s his wife’s gran, Ethel, whose mind, Leadbeater announces, was ‘addled’. She managed to get by when she stayed in the familiar environment of her council house, but when she was carted off to a nursing home ‘her worn-out brain was incapable of putting other landmarks in place in her new surroundings’. In Ethel’s dementia there is a universal lesson: ‘the same fate befalls many companies’ if they stick by tired, boring rules of thumb and don’t keep up with the new. Leadbeater tells us he likes Thai noodles and foreign holidays. He recommends his travel agent, Philip Davies of Real Holidays, in North London. Presumably Mr Davies sent him East, because it was on the shores of an Oriental sea that Leadbeater had a blinding flash and realised that humans could develop joint stock companies and the iMac because they weren’t crustaceans. A chapter on competing types of industrial organisation in the 20th century begins:

Each evening hundreds of crabs scurry across the idyllic beach at Krabi in Thailand. They form a fractious, self-governing community which in many respects mirrors our own. They fight over territory, squabble over food and get along, with just enough co-operation to survive. What distinguishes humans from crabs, apart from the lack of claws, is the degree of co-operation we are capable of. Crabs and sunbathers may share a beach but crabs have not built beachfront hotels, with swimming pools and restaurants, served by nearby roads and airports, to which planes are guided by sophisticated computers.

This vilification of crabs seems arbitrary and unkind, but problems of a more general kind are raised by prose as crass and parochial as this. Why do Blair, Patten and Mandelson think that Leadbeater is so very interesting and deep and clever; why do they put him on advisory panels for the Department of Trade and Industry? Why does the head of BP seek his services? He contradicts himself too often to be a guru: the avowed point of his book is to justify his prediction that soon we will all be knowledge-workers happily taking on temporary assignments for trendy companies who value us as ‘their greatest resource’, but later he appears to acknowledge that people will still have to manufacture the cookers and grow the food if Delia’s recipes are to be transferred from the page. Everywhere his forecasts are circumscribed by a maze of hedges and, even after several readings, it is difficult to see what he has in mind.

The attractive riposte that we are ruled by idiots is plausible but takes us only so far. Leadbeater’s appeal lies in his partially true, but Panglossian, view of modernity, which flatters the self-regard of the simpering ‘progressives’ who dominate Western politics and business. You can define Leadbeater and his friends by what they do not discuss. His faintly Orwellian slogan, ‘Globalisation is Good’, is justified by the blithe assertion that markets spread knowledge and democracy. To reach this conclusion, he has to ignore all manner of things, from the interrelationship between globalisation and ethnic and religious fundamentalism to the ability of corporations to dictate tax policy to, and demand subsidies from, democratic states. His few policy suggestions resemble those of the simplistic Right. In an age of global conglomerates, Leadbeater argues, there is no need for antitrust laws because the invisible hand of the market will brush aside all cartels. He rightly notes the difficulty of extracting money from the plutocracy, but then recommends making up the shortfall by regressive taxation, rather than the one charge the rich can’t avoid: property tax. I’m tempted to say – once again – that he’s a Tory and have done with it. But Third Way neo-Thatcherites work hard to deny their opponents a clear view of the target, Leadbeater worries about the slums and the sink schools and, like his masters, appears to be sincere. What gives him away is his urgent desire to commodify. He doesn’t only turn his children, mother and wife’s grandmother into unique selling points: every human relationship can be bought cheap and sold dear in his philosophy.

Leadbeater announces that his goal is nothing less than a ‘radical and emancipatory’ society which harnesses ‘the power of markets and community to the more fundamental goal of creating and spreading knowledge’. To attain this we must focus on one of the world’s leading practitioners of thin-air economics, the late Diana, Princess of Wales. The warring royals, you must understand, were brands. The House of Windsor was ‘imprisoned by the assets and protocol which were once its strength’. Ms Spencer was ‘the upstart challenger’. As we enter the world of what he calls ‘Dianomics’, established incumbents will face ‘younger, nimbler contenders armed with new technologies’, just like Di. ‘For the Royal family, read IBM; for Diana, read Microsoft ... For the Royal Family read Barclays and NatWest; for Diana, read First Direct.’ Leadbeater does not understand that consumers cannot refuse to patronise ‘The Firm’, however shoddy its performance has become: that’s the point about a monarchy.

However confused Leadbeater sounds, his relentless commercialisation has a point. The book builds to a sudden moment of clarity when he is explicit about the need for social services to be invigorated with private sector values. It is at this moment that the cute fables, the family vignettes and the ghastly Janet-and-John style hit the real world with a thud. Britain under Thatcher gave the world privatisation. Blair is attracting equal international interest by taking the dissolution of communal wealth on to the next stage. New Labour is handing assets to corporate Britain on terms so outrageous they would make an extortionist blush. The under-reported phenomenon of the Private Finance Initiative was devised by Whitehall as the solution to a dilemma: on the one hand, public squalor is too evident for Third Way governments to ignore; on the other, they do not want to raise taxes, particularly from the rich. Their way out is to sweat public services in the private interest. Virtually all new public works must be funded on the terms of the Initiative. To understand the Government’s recklessness, consider the financing of new hospitals. Instead of meeting the construction costs out of Treasury funds, New Labour instructs consortiums to build them and lease their facilities back to the NHS for periods of thirty to sixty years. Although the Private Finance Initiative is couched in the most arcane jargon, its basic fault is obvious. Supporters of the initiative are like buyers who choose to take out a 30-year mortgage with attendant interest payments rather than buy a house with ready cash. The replacement for the new hospital in Edinburgh, for example, would have cost the Government £180 million, had it been funded from the public purse. Under PFI, a consortium will receive £30 million a year for 30 years – £900 million in total – and will still own the building and land when the milking of the taxpayer has finished. Unsurprisingly, the fastest growing companies on the London stock market are the new private finance companies.

To meet the demands for profits from the new corporate welfare state, the NHS will have to slash services and sell land and buildings. In Edinburgh, the number of beds in the infirmary will be cut by 37 per cent. As every new hospital must be funded by the Initiative, every replacement hospital now being built will see reductions in beds and nurses and community services. Even if you can get into a ward, you will be thrown out as soon as possible because managers will be forced to keep patient – sorry, customer – turnover rapid. The usually conservative British Medical Journal has said that the NHS is being privatised by stealth. The public will have to pay through the nose for a third-rate service, the paper continues, in which the opportunities for corruption are too great to be missed. Few serious commentators disagree. But New Labour treats its critics like clowns. The private sector is dynamic, innovative and simply better, it says. Any price is worth paying to guarantee its participation in a mass liquidation of public assets.

To believe as Blair believes requires total immersion in the ideology of modern capitalism. Leadbeater is popular because he endorses that ideology. In his world, all relationships can be reduced to the cant of the business school. Perversely, Living on Thin Air is a backhanded homage to The Communist Manifesto: the ‘next Blair revolution’, dangerous and debased as it is, envisages the commodification of just about everything.

Send Letters To:

The Editor
London Review of Books,
28 Little Russell Street
London, WC1A 2HN

Please include name, address, and a telephone number.


Vol. 21 No. 22 · 11 November 1999

If Charles Leadbeater really does draw on the children’s book We’re Going on a Bear Hunt as inspiration for his vision of the Great Modernising Project, he is even further off the mark than Nick Cohen suggests (LRB, 28 October). The book does, indeed, tell the story of a family which determinedly overcomes all obstacles in search of a bear: ‘We’re going to catch a big one. What a beautiful day! We’re not scared.’ The point of the story, however, is that the hunters have not thought about the consequences of their actions. When they eventually track down their quarry in its cave it is, understandably, very annoyed: ‘One shiny wet nose! Two big furry ears! Two big goggly eyes! it’s A BEAR!!!’ The angry bear chases the terrified family all the way home and disaster is only narrowly averted. Safe inside again, with the door bolted, they cower under the bedcovers and vow: ‘We’re not going on a bear hunt again!’ Perhaps there is a useful lesson there for New Labour after all.

Tim Minogue
Lewes, East Sussex

send letters to

The Editor
London Review of Books
28 Little Russell Street
London, WC1A 2HN

Please include name, address and a telephone number

Read anywhere with the London Review of Books app, available now from the App Store for Apple devices, Google Play for Android devices and Amazon for your Kindle Fire.

Sign up to our newsletter

For highlights from the latest issue, our archive and the blog, as well as news, events and exclusive promotions.

Newsletter Preferences