Jim O'Neill sees siloed interests driving colossal market failures and out-of-control public spending

Two recent conversations confirmed my suspicion that too many experts are operating in silos and often failing to connect the dots.

The first conversation was about antimicrobial resistance and hospital-cleanliness best practices, specifically in the United Kingdom. I have followed this topic closely since chairing a UK-government-commissioned Independent Review on AMR in 2014–16 (one of the most stimulating experiences of my professional life). Our findings are still cited frequently, and our recommendations represent the gold standard when it comes to addressing this exceptionally worrying threat to global health, our methods of treating illnesses, and our long-term economic well-being.

Owing to this previous work, I am now chairing an initiative to create and finance an advanced market commitment (AMC) to incentivise the development of point-of-care diagnostics for neonatal sepsis in the developing world. This is an urgent problem, because drug-resistant sepsis is on the rise and disproportionately afflicts infants and their mothers.

In my new capacity, I was asked to give a talk about AMR for the launch of the UK Built Environment Infection Prevention Initiative (BEIPI), which aims to draw attention to British hospitals’ overuse and general stewardship of antibiotics. According to one briefing I received, a disturbing amount of excreted antibiotics from patients are going into the waste systems and making it back into the live hospital environment, thus feeding the growth of resistant microbes. Some of the figures I heard were downright depressing.

In addition to calling attention to this problem, BEIPI is seeking resources to build better health-care facilities and upgrade existing ones, which of course requires a request to the UK government for more money. Any funding would be framed as “preventive” investment, of which I am a big supporter. And yet, with so much justifiable attention on the ever-rising share of public spending on health in the UK, owing partly to the sector’s chronically weak productivity growth, this is a big request.

A mere three hours after my conversation with the BEIPI team, I met with members of a leading business advisory firm, who almost immediately jumped to the topic of wealthy individuals anxiously awaiting the next UK budget and considering a move overseas to a friendlier tax regime. Now, I am extremely sympathetic to genuine entrepreneurs who create their own businesses, as well as to the venture capitalists who back them. It makes sense to incentivise productive risk-taking with a lower tax rate than the one for general income-tax-paying households. But the fact is that many people benefit from the lower capital-gains tax without engaging in genuine risk-taking.

Since one of my interlocutors advises major pharmaceutical companies, I brought up the topic of AMR. I pointed out that their own proprietary research offers almost no coverage of antibiotic (and vaccine) development, even though they know that we could be heading into a future where many current antibiotics no longer work. Instead, most of their time and attention is devoted to businesses with high returns and large demand, many of which are significant buyers of their own stock.

When I was chairing the AMR Review, I found that the sum spent by just three US pharmaceutical companies on share buybacks over the previous five years would have covered the global cost of implementing our 29 recommendations—some of which touched on developing new antibiotics, diagnostics, and vaccines.

Having been reminded of this finding, I checked the latest figures and found that Big Pharma has now spent around $1.2 trillion on buybacks and dividends since 2001. That would fund our 29 interventions 30 times over. Should share buybacks really be getting preferential tax treatment? The fact that they do appears to have created a colossal market failure.

Nor is this just a problem in pharmaceuticals. Publicly traded companies have bought more than $12 trillion of their own shares since 2000, during which time there has been staggeringly weak growth in investment spending (outside of AI), often weak growth in real (inflation-adjusted) earnings, and a rising income-tax burden in many countries. Do these trends seem sensible? Is this how capitalism is supposed to work?

Worse, there are many other areas where siloed thinking is leading to similar results. To name just one, a hot topic in the UK is the “triple lock,” which requires that state pensions rise annually “in line with either inflation, wage increases, or 2.5%—whichever is the highest.”

Since 2011, this nonsensical policy has given British retirees a fabulous boost to their real incomes, with the bill covered by higher taxes on everyone else and higher borrowing. To his credit, Prime Minister Andy Burnham recently signaled his intention to “adjust” the policy, with annual savings reaching £15 billion ($20 billion) by the late 2030s and increasing to £50 billion by 2050. But he chose to present this reform as part of a larger package to pay for social care, presumably to avoid too much backlash from pensioners. Meanwhile, the opposition leader, Kemi Badenoch, didn’t even mention the topic at her recent party conference.

I have said it before, and I will say it again: At a time when UK government spending is rising sharply, our leaders urgently need to show signs of leading, rather than always telling specific interest groups what they want to hear.

Jim O’Neill is a former UK Treasury minister and a former chairman of Goldman Sachs Asset Management. Copyright: Project Syndicate, 2026. www.project-syndicate.org