The biggest externality of all

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I spoke on the need for long-term thinking at the launch event of the REAL Supply Research Unit at the Centre for Health Economics (CHE) at the University of York this morning. This is what I had to say (near enough):

Good morning and thank you for the introduction and for asking me to speak today.

The issue that you have asked me to talk about is long-term thinking, and that is something which I have dedicated quite a lot of my time to when researching accounting, economic, environmental and other related issues, all of which I consider to be on a single spectrum of concern. I should add that I have also discussed the issue within the context of medicine, because I've done quite a lot of campaigning around that issue in my time, and I am married to a retired GP, which makes it unavoidable.

That said, the real question to address is why is it that we find it so difficult to think both about the long-term, and those issues about which we are in denial, many of which concerns overlap?

What I'd like to suggest to you is something that I and colleagues at Sheffield University have spent some time discussing within an accounting framework, which I think is just as relevant here.

We describe some data as being in what we call the measurable space. Accountants just love this stuff.

What we also recognise is that there is a great deal of data which is in what we describe as the unmeasured space.

And there is still yet more data in a third location, which is what we call the immeasurable space, although we now tend to think it's better called the deliberately immeasurable space.

We all know what the measurable space is. It is immediate, pressing, and most likely feels urgent, but is very often unimportant.

In accounting terms it is the financial results of a company for a year that ignore the needs of all stakeholders beyond shareholders, and where the definition of being a going concern is surviving more than 12 months - with anything beyond that being unmeasured.

That short-sighted understanding that dominates my own first profession can easily be translated in other ways. Themeasurable space is the humdrum of life that we must attend to if we are to survive, and yet which makes no real long-term impression on anyone else's life, unless you put feeding the children into this category, which I guess we should.

Actually, that illustration is relevant. A great deal of what we humans do as humans is geared towards such issues of short term survival.

Alternatively, we are really good at very short term fight or flight reactions.

The result is that if there is one thing that most of us are good at it is making it to tomorrow over quiet extended periods of time, albeit that we take it for granted that tomorrow will arrive, because that is something that we refuse to think about.

The data we need to achieve that short-term goal is almost certainly within the measurable space when we come to decision-making. And, because of our natural orientations, it is to those issue that we give our focus. The vast majority of human decision making is about us and our survival, and blow the rest. Call it microeconomics, if you wish.

The unmeasured space relates to matters that are important, but not urgent. Most people have the inclination to put such issues off, even when we know they need to be addressed, and we know how to address them. The term mañana was created for a very good reason. It describes normal human behaviour. The result is that almost anything that is beyond our immediate planning horizon is put off, if we can do so.

In healthcare this is reflected in the fact that far too many people in the UK turn up at their GP practice with the symptoms of cancer long after the time when there was a really good chance that something can be done about it. They knew there was a lump or blood in their pee, but the issue was put off. The cost of that is in the unmeasured space. Wes Streeting needs some serious education on that.

That said, the thing I am most interested in is the so-called immeasurable space.

I say that because I think the boundaries between the various spaces that I describe are decidedly fluid. On occasions, I don't even think that there are boundaries at all. All there are are decisions to pretend that matters do not matter immediately (the unmeasured space), or are not thought to be of concern (the immeasurable space). What is fascinating about immeasurability is that so much that might be defined as such is in that category because the decision has been taken to make it that way.

For example, we heard yesterday at the Covid enquiry a suggestion from the former chief economist at the Treasury that economics and medicine do not mix. Medical issues and their impact were, then, moved by the Treasury into both the unmeasured and immeasurable spaces.

So, for example, the Treasury did not apparently include the impact of long Covid in their forecasting for the post Covid era because they assumed it away. They chose to make it immeasurable.

But even more bizarrely, there was also no serious forecasting for the cost of lockdowns. They made that unmeasured.

And yet, despite both these things the Treasury was quite sure that the country could not afford another lockdown in late 2020, the human cost of the delay of which was so significant that even Boris Johnson called the Treasury the ‘pro-death squad'. What they counted in the measured space of immediate cost over-rode any other consideration - or even the need to think about it. Intelligent people did, for their own reasons, chose to put matters of real concern with life and death implications into the immeasurable space because they did not wish to address it.

So, if we going to to talk about health economics in the longer term, and its relationship with the environment, which is going to become ever more pressing, or with poverty, which we know is real already, or with AI and joblessness, which is going to be a challenge, then the issue to be addressed is a very simple one. It is the need to drag those who have to make decisions out of their current, very comfortable, measurable space and to recognise that there is a longer term in what I call the unmeasured space, to which they must give attention. That though is no more than making microeconomics more responsive to the future.

What is even more important is to those make people understand that a great deal of what is dismissed at present as being in the unmeasurable space is not. One way to say that is to suggest that multidisciplinary approaches to health economics can transform the way we understand behaviours.

Another is more straightforward. It is that we have to consider issues in more macroeconomic terms and take externalities into account, whatever sub-discipline we work in. Only then will we really take the long term into account - because that is the biggest externality of all as far as most of us are concerned.

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