The case for Manchesterism: A call for a Productive State
In the aftermath of the 2008 financial crisis, regulators realized that monitoring individual banks for individual risks was insufficient. The crisis was not the sum of separate failures but a systemic consequence of an architecture whose vulnerabilities concentrated and cascaded at sites the existing supervisory framework couldn't address. This lesson reshaped financial regulation, but it hasn't yet transformed how we govern the supply side of the British economy, and the cost of this incompleteness is the compounding crisis we're now facing.
The British state continues to operate a pre-2008 supply-side regime, monitoring individual sectors through individual regulators and disciplining individual firms through individual licences. This approach, however, fails to address the instability and excessive costs generated by the supply-side architecture as a whole. High and volatile energy prices, deteriorating water services, managed housing supply for profit, and degraded care due to financial extraction are just a few examples of this dysfunction.
The solution lies in regaining democratic control of the supply side, which requires what the author calls the Productive State. This is a public institutional architecture for the supply side, designed to intervene at the specific sites where instability, extraction, and underinvestment originate. It's the supply-side counterpart to the macroprudential turn, aiming to build a three-tier economy of abundance, security, and stability.
The most advanced practical demonstration of this approach in Britain is Andy Burnham's Greater Manchester program. Against the grain of national policy and with limited powers, it has begun delivering affordability and economic dynamism in tandem by regaining public control of essentials. This project is not just about tackling the cost of living crisis; it's about creating a more inclusive, resilient, and democratic society, where belonging is built through shared experiences rather than divided by what we can afford.
The author argues that the logic of Manchesterism should be taken to the national scale, and a coalition should be built to achieve this. The existing policy toolkit has failed to address the problem, and the bond markets are now forcing the political class to confront the trajectory of the fiscal escalator. The conventional response, dominated by a binary between market coordination and welfare state redistribution, is inadequate for addressing the question of who owns and operates the foundations of the economy.
The Productive State offers a third pillar of political economy, intervening on the supply side by investing public money into public assets for public provision of essentials. It directly owns and operates capital in essential sectors, participating in markets as builder and provider rather than as regulator or redistributor. This approach delivers sovereignty advantages, including price sovereignty, supply chain sovereignty, and ownership sovereignty, which are crucial in an era of weaponized interdependence.
The author outlines five criteria for intervention in the Productive State: productivity exhaustion, systemically significant prices, investment strike, social need, and public policy goals. These tests identify where private ownership fails on its own terms, and Britain's essential sectors meet most, if not all, of these criteria simultaneously, highlighting the structural consequences of privatizing the foundations of economic and social life.
Manchesterism in action is evident in the Bee Network, Greater Manchester's public transport experiment. Since its franchising began under Andy Burnham's leadership, passenger numbers have risen for the first time in a generation, and routes have expanded into communities that private operators had abandoned. This demonstrates how public control of essentials can reduce the cost of provision, lower coordination frictions, and decrease the fiscal transfers required to make essentials accessible.
The author addresses three objections to the agenda: fiscal and financial concerns, institutional capacity, and the lack of a coalition. They argue that the Productive State model, as demonstrated in the Netherlands, can be financed through revenue-backed public corporations without disrupting bond markets. State capacity is not a natural endowment but a constructed capability, and the doing of the work generates capacity. The coalition required to deliver this agenda exists in latent form, and the public is already signaling a desire for change.
The author concludes by emphasizing the deeper stakes of the argument, which go beyond cheaper bills and better infrastructure. Universal public provision constitutes a political community based on dignity and equality, creating shared institutional foundations for a politics that transcends fragmentation. The Productive State delivers macroeconomic stabilisation, abundance through coordination, and security through decommodification, leading to an economic system with three distinct tiers: a decommodified foundation, a stabilised market middle, and an innovation frontier enabled by the security of the foundation.
The choice is clear: change can be forced by crisis or designed by choice. The author calls for a deliberate, sequenced extension of public capacity in the sectors where private ownership has failed, governed by institutions built for the purpose, and financed through revenue-backed public corporations. This is the path towards a more affordable, dynamic, and democratic society, where the Productive State plays a central role.
