It Depends What You Mean by Depends

Thanks to the Green-Left list, my post on the motion to conference called Living within our Means has attracted more comments than any other. The point of the motion was to stimulate a debate about the relationship between green economics and a policy response to the public-spending cuts so this seems to have been achieved. Those with stomach for more may enjoy reading the longer version of my reasons for proposing the motion, which were published in Green World.

An interesting question raised by some of the comments is whether the Green Party should identify itself as being of the left, and whether it should identify itself as a socialist party. I'm sorry to say that any response to this question leads me to ask what people mean by identifying themselves as socialists.

I am sure there are highly technical answers to this question that inhabitants of the Ukraine more than 30 years old probably know clearly, but which are a mystery to me as the beneficiary of a capitalist education during the Cold War. Being of a similar vintage I can remember in my student days the heated debates in the Labour Club about whether the Labour Party should abandon Clause IV, which dealt with the ownership of the means of production. That seems to me key to being a socialist party, and since it has gone, I fail to see how Labour can claim to be one.

My own sympathies lie with the guild socialists, who lost out in the struggle for power within British 'socialism'. Their vision of self-reliant communities where craftspeople were organised into co-operatives which sold the goods they produced without anybody extracting value seems close to the green vision of a sustainable and just economy. We might argue about which sectors of our national economy are sufficiently important as to need to be democratically managed outside the market - health is obvious agreed by consensus, but what about housing? energy? water? - but beginning with local and co-operative ownership seems closer to the green way than nationalisation.

More generally, my belief is that the struggle between capital and labour that characterised the 19th and early 20th centuries has been superseded. The most important form of emancipation we can undertake today is from what Bob Marley called 'mental slavery', in this case the mental slavery of accepting the capitalist definition of ourselves as 'wage slaves'. We should not march for the right to work or fight for full employment; rather we should understand and challenge the system of money creation and resource ownership that leaves us in the weak position to begin with. Tweet

Systemic Failures too Great to Face?

I've been reading John Lanchester's book Whoops! about the financial crisis and finding it entertaining but somehow disappointing. It seems to offer evidence that, as T. S. Eliot would have it, 'human kind> Cannot bear very much reality', and when we cannot bear any more we go into denial.

I have to congratulate Mr Lanchester on fighting his way through the verbiage of abbreviations that hedge around the illicit and immoral activity of the City, but where we part company is at the point where he tells us that credit is essentially good for you, that debt works. Perhaps I should not have been surprised, since the book begins with stories of the young Lanchester and his father, who was not only a banker, but a banker based in Hong Kong.

The extended analogies explaining CDOs or securitization in terms of your mortgage or your neighbour's loft conversion are perhaps necessary, but essentially misleading. As Lanchester makes clear, government debt works more like personal debt than like corporate debt, which means we have to work hard to pay back both, whereas bankers and investors do not. But he does not question this. Eventually he admits that 'In practice, the personal-finance example breaks down here, because you can't lend money to yourself and create credit in quite this way. But large financial institutions can and do.)'

This is just one example of the way in which the book is explanatory but not critical. The author makes no attempt to explore how financing public spending through private finance necessarily advantages those who control capital. Nor does he have any inkling of the environmental problems that debt-based finance causes. In Lanchester's world, the economy would be marked by a steadily rising growth trend and managed by decent men in tweed jackets, not unlike his father perhaps.

But this is to miss the point that the growth of a capitalist economy is self-reinforcing, so that busts are inevitable. And it is to entirely overlook the fact that a limited planet makes it imperative to find a way of creating money that does not rely on such exponential economic growth.

The members of the establishment must have had their faith severely shaken by the financial crisis, when those who manage the messy world of finance on their behalf so riotously messed up. This is enough reality for one decade; to consider that the system of which they are the pillars might be inherently messed up would be too much reality to bear. Tweet

Transition Barter Habit Spreads up the Severn

A guest post from Simon Topping of Transition Gloucester.

Transition Gloucester recently held its first barter market, except we called it a “barter party” to make it feel more informal and experimental in case everything went horribly wrong! In fact the event went extremely well and has encouraged us to think how we might develop the idea in the future.

There were ten stalls at the market, held at Hucclecote Community Centre. Stallholders were asked to bring goods or services for their stall, roughly equivalent to ten pounds sterling. At the start of the market each stallholder was given ten “glevums”* with which to trade. They were told that they should try to return ten glevums at the end of the market which was to last for 45 minutes. They were also told that if they returned less than ten glevums then they had probably taken more than their fair share of goods and services on offer. If they returned more than ten glevums then they would have taken less than their fair share.

There was a rich mixture of goods and services on offer: homegrown fruit and vegetables, homemade wine, cakes and bread, mint tea and dried herbs, a selection of “service vouchers”, books, vintage records, low energy electric light bulbs and much more.

By the time the market was closed the majority of traders had exchanged most of what they had brought. Also, most traders ended up with roughly ten glevums, some with a few more, some with a few less. The deadline for the closing of the market encouraged those with too many glevums to make sure they bought something with them because, once the market was closed, the glevums would have no value.

We sat around with drinks after the market to talk about how it went. There were many positives, but also some questions:

Most traders were very pleased with the rich mix of goods they ended up with. We brought a pile of oinions to our stall and went away with a range of other vegetables, two books, a bag of mint tea and a low energy light bulb.

People also appreciated the direct link (in most cases) between the trader and what they were selling. The trader was usually also the producer (even with the books). There was a sense of connectedness in the whole process of producing, trading and, ultimately, consuming.

There was also a feeling that the trading was a social activity, as well as an economic activity – conversations naturally broke out over how goods had been grown or made and how best to use or eat or preserve what had been traded. This social interaction gave added value to what had been traded.

One very practical issue was how you could act as both buyer and seller at the same time. It was hard move around the stalls to see what was on offer and also be available at your own stall to sell your own goods. Maybe each stall should have both a buyer and a seller.

Some items were in high demand - two bottles of home made wine to be precise! How does the seller decide who to sell the wine to? Should s/he sell it to the person who gets there first – this might favour the fastest movers! Should s/he increase the price of the wine until somebody decides to drop out of the auction? And if the original price of the wine is increased then should the trader remove other items from their stall so that the total value of the goods they are selling is still the same as all the other traders? If not, that trader will have more glevums to spend than everybody else. Or should the wine seller keep the same price but just decide who needs it most!

The sort of conundrums which the barter market produced helped us unmask some of the hidden dynamics of markets, in particular how we measure value. The group who particpated in our experiment in bartering felt very positive about the event and we hope to run a further market in the coming months.

*The Roman name for Gloucester Tweet

Capitalists Defend Capital Against the Banks?

Now here is something you didn't expect to see: a link from my blog to a Conservative one. Although, given the recent suggestions that I am incapable of using the word 'capitalism' in a critical way, perhaps you wouldn't be surprised. Although this post on Conservative Home begins with a childish and laughable indication of the blind hegemony of the pro-market ideology, this is to reassure readers who may be shocked by what follows.

The interesting news you can read between the lines of what follows is that the debate on monetary reform is on the move. This is one of those issues where the old left-right, capital-vs.-labour argument gets thrown into disarray, because those who own the capital appear to be becoming disgruntled about those who 'create' money undermining their holdings. Clearly, I have wildly different reasons for wishing to take the power to create money from banks, and in fact I doubt many Conservatives would agree that this right should lie with the people. But, as this Carswell makes clear, a minority are resuscitating arguments for a return to the fractional reserve system.

On a less cheery note, the policy motion on monetary reform to this year's Green Party conference was not passed, and cannot now be brought back for another two years. The US Greens, by contrast, have included in their policy platform for 2010 a full commitment to monetary reform and for political authorities to reclaim the power over money from the banks.

After the large number of responses to my last post, some of them rather forceful and a little unfair, I wonder whether I dare encroach onto this territory. I will be responding to the interesting debate that ensued in a later post. In the mean time perhaps I should take Harry Enfield's advice and 'know my limits'? Tweet

Living Within Our Means

Green Party conference is still in full swing at the Birmingham Conservatoire. I was lucky that the two motions I had an interest in - one on banking and the other on how to put forward a positive view of a sustainable economy in the context of public-spending cuts - were both scheduled for the Saturday. So by 6pm everything was done and dusted and I was able to practise what I preach and have Sunday off.

This post has the same title as one of the motions that I was proposing, and its passage was not entirely comfortable. The Green Party is struggling with an influx of socialists who are understandably disillusioned with the Labour Party. This is a small proportion of Labour Party membership but can become a significant minority of our party, and one which rapidly starts to weight us down towards one side of the left-right continuumn that we really should be transcending. Thus it was that I found myself in the uncomfortable position of being attacked by the left of the party as though I was defending public spending cuts.

Like most people who either work in our use the public services that working people fought so hard for in this country (and isn't that most people who live in this country?), I am delighted that the TUC will spend this week making a range of political and emotional arguments in their defence. I just know that this is not the role for the Green Party. We cannot join the old left in their Keynsian calls for restimulating the growth that is killing the planet. We have a more subtle and forward-looking message and it is our duty as a party to put that forward.

The vote was won and, aside from some personal attacks that are another feature of the Labour Party that we increasingly have to put up with these days, I felt generally well supported and - which was more cheering - well understood. The theme of this motion was taken up by Adrian Ramsay, in his Deputy Leader's speech to the conference where he drew attention to the different ways we interpret the phrase 'living within our means'. I am including the text of the motion here:

Living within Our Means

Synopsis. The unprecedented deficit is an indication that we are living beyond our means in a fiscal sense, which supports the Green Party’s long-held belief that we are living beyond our means in an ecological sense. Our recognition of the link between these two crises constrains the kind of response which the party can make to the current debate about publicspending cuts.

Motion

LWM1 The Green Party restates its commitment to developing an economic policy that is compatible with ecological sustainability and 'recognises the limits of . . . the
natural systems of the planet’(EC100).
LWM2 In this context it is important that we recognise the current fiscal deficit as a consequence of a policy based on monetary inflation without respect to ecological limits; for our policy to be consistent we cannot rely on growing our way out of debt, as many conventional economists propose.
LWM3 The unprecedented level of public deficit means that a significant restructuring of our economy is inevitable. The Green Party would use this opportunity to achieve the managed descent from overconsumption that our commitment to sustainability requires, while simultaneously addressing the rapid rise in inequality that has occurred in the past 30 years. We could consider this to be a domestic equivalent of our global policy for Contraction and Convergence.
LWM4 Conference instructs the policy co-ordinator, the economics policy working group, and the Party’s media team to work together to find ways to exploit the opportunity offered by the fiscal crunch to publicise the Green Party’s unique
commitment to steady-state economics.
LWM5 The policy co-ordinators are instructed to begin a process that will bring to spring conference proposals that will, in the context of the current public spending position, explore the synergies and conflicts between:
The Green New Deal proposals that were passed as a fast-tracked policy motion in Autumn 2008;
The proposals for implementing our economic vision included in the 2010 election manifesto;
The commitment to building an economy within ecological limits included in the first paragraphs of our economic policy. Tweet

Economists: Pussycats with Claws?

An interesting debate has been taking place in the pages of the FT about the status and role of economists. I have a sense of divided loyalties, since I sweated blood acquiring the econometric expertise that enabled me to become a PhD in economics, while at the same time being quite convinced that the discipline itself is a political fig-leaf and its methods almost entirely unhelpful.

According to columnist Gideon Rachman:

'When things were going well for the global economy, the prestige of economists rose steadily. They were the gurus of the age of globalisation. Governments, consultancies and investment banks rushed to hire economists, who were thought to possess vital skills and information. Historians, by contrast, were treated as mere entertainers and storytellers. They were archive-grubbers, lacking in scientific method – good on television, but useless with a PowerPoint and no help in government or the boardroom.'

This is a rather naive interpretation. The same day this was written I met with a colleague who is a heterodox economist and was surprised to find himself invited to join a government advisory panel shortly before the election. This experience, and his conversations with other policy-makers, convinced him that the political class has never valued the opinions of the number-crunchers. Professional economists are used to provide evidence for the decisions they have already taken, and to provide ideological defence for the destructive economic system they promote. Examples abound, but those economists who defended the absurd financial shennigans in Iceland are an object lesson.

Rachman argues that economists might learn from historians in their approach to evidence rather than 'aping the physical sciences', a deplorable habit that Hazel Henderson aptly referred to as 'physics envy'. But surely Sheila Dow, a leading pluralist economist, is closer to the mark in suggesting that economics needs to sort itself out, define its territory, accept a plurality of approaches and analytical techniques and - most important of all - re-establish a connection with the real world. Tweet

Magical History Tour

If you've studied sociology or politics you have probably come across Max Weber. When I was a student he was set against Marx as the rational, thoughtful one compared to the dangerous firebrand. A sort of George Harrison to Marx's John Lennon.

Weber's most famous work is The Protestant Ethic and the Spirit of Capitalism. In the sort of friendly, interesting writing which no modern academic could get away with, he draws vast and interesting theories around the relationship between the culture and belief system brought in with the Reformation and the economic system that developed in the following centuries.

The link that he made in his work that is most often reported is that between the focus on the hereafter and the nature of economic activity. On the one hand the workers, what economists might think of as 'labour', were encouraged to be patient in their vocation, accepting their lot and perfecting their personhood, however lowly, to ensure glory in future lives. As George Herbert has it in his nauseating poem 'The Elixir':

A servant with this clause
Makes drudgery divine :
Who sweeps a room as for Thy laws,
Makes that and th' action fine.

On the capital side of the equation, owners are also restrained by Puritan ideology from making a show of their wealth or spending it in personal indulgence. This facilitates the accumulation of capital and its investment in further business development. Thus Weber's theory helps to explain the seeming paradox of so many Quakers and other religious men establishing such thriving business empires. There was no conflict between God and Mammon because they didn't enjoy the fruits that Mammon offered.

A recent episode of Thinking Allowed discussed a less well-known concept in Weber's work, that of disenchantment. Weber used this word advisedly, to refer to the way in which Puritanism denied and rooted out the mystical and magical practices of the Old Religion. Catholicism had struggled in vain against such popular customs as well-dressing and the maypole and hence the innate human desire for ritual and the according of spiritual value to natural features had continued to be expressed. But the Puritans desired that wisdom should come only in abstract form, direct from the word of God. Before the bible was translated for many it was meaningless incantation, since it was in a Latin they could not follow.

The programme is still available for download as a Podcast. It has led me to wonder how we might reenchant nature, and what that might imply for the way we negotiate our use of her resources. Tweet