The King's Speech

You can tell that there is a major adaptation afoot when the Governer of the central bank of the country where capitalist finance is based starts to make interesting speeches. Do not be put off by the title, Global imbalances: The perspective of the Bank of England is radical stuff - heady, the FT calls it. Like King's speech to the Buttonwood gathering in New York this new statement is steeped in nostalgia for the era before Big Bang, when there was some degree of political control over financial interests, and bankers could not destroy the livelihoods of other citizens.


King expresses concern about the 'large and persistent current account deficits' being run by the UK and US 'while emerging market economies, in particular in Asia and among oil exporters, have been running current account surpluses.' This situation of imbalance in current accounts - the very situation that the Bretton Woods system was designed to avoid - results in instability and, potentially, conflict. The graphic shows how successful the Bretton Woods system was, and the mayhem that was evident before and after.

This paper must surely have been used to inform discussions amongst G20 finance ministers in Paris last weekend. The meeting agreed a resolution but the fundamental disagreement between China and the others over the desirability of total free movement of currencies and the need to address current account imbalances was apparent.

Mervyn King appears to agree with the Chinese. As illustrated in the second graphic from his paper, he associates free currency movement and financial instability:

'financial crises have been a hallmark of the current incarnation of the international monetary and financial system (IMFS),with the reappearance of global financial instability coinciding with the rapid increase in capital mobility.'

His conclusion is that finance ministers need to use a much wider range of tools than just interest rates. They should take back a positive management role in monetary policy, controlling capital flows, and encouraging an increase in saving rather than spending, as well as considering a revision of the 'role and governance of the international financial institutions'.
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Who Bankrupted the Country?

Richard Lawson has an excellent post using Office for National Statistics data to make it quite clear who is responsible for the national debt. As he says, since the Labour Party seem terrified of laying the lie that it was Labour rather than the bankers that made us bust, the Green Party will have to do it for them. Tweet

Tim Jackson to Speak at Green Party Conference

We are delighted to announce that Tim Jackson will be speaking at this year's Green Party conference, in Cardiff on Monday 28th February at the Angel Hotel in Cardiff. Professor Jackson is one of the world leaders in the debate about how we might develop our economy in a way that does not threaten the health of the planet. His TED talk has received glowing reviews.

Tim Jackson's book Prosperity without Growth grew out of a report he undertook on behalf of the Sustainable Development Commission. That was advice to the highest level of government that we had to end economic growth and undertake a radical restructuring of our economy. Perhaps we should not be surprised that the SDC was closed down shortly afterwards.

Professor Jackson will be in debate with Neal Lawson from Compass at 1pm on Monday. They will address the link between sustainability and equality in the context of economic recession and government spending cuts. This is an important debate for the Green Party and we hope that the session will enable us to find ways to make more of our commitment to living within our means while also ensuring equality and high standards of well-being.
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Witness Against the Arms Trade

This year's census is providing an excellent opportunity for those of us committed to peace to make a personal witness against the international arms trade. Despite the power of the rhetoric of the 'free market', every society defines 'goods and services' which cannot be sold freely, whether this is a range of drugs or people's bodies. Arms should be put into a similar category of highly controlled products.

It is unfortunate that the Green Party appears to have changed its position on the census. Back in August 2008, when the decision was made to engage Lockheed Martin, the US arms corporation, to undertake the census Caroline Lucas was quoted as saying that 'the Census depends on the trust of every person in Britain' and that:

'We maintain that the Census would be best conducted by teams of public employees, over which we have full scrutiny and control, not by private contractors with such close links to the US Government.'

Lockheed Martin is responsible for the manufacture of Trident nuclear missiles, which the Green Party opposes, as well as cluster bombs and F-16 fighter jets that are used to kill the innocent in wars in Iraq and Afghanistan - post-colonial engagements to which the party was also vociferously opposed.

In spite of these principled stands the Green Party, my party, has decided to oppose the boycott of the census. I can only assume that this is through fear of appearing irresponsible. I have not been aware of much debate or any democratic decision-making process within the party. My own personal decision, as a Quaker, is not to contribute to the profits of one of the merchants of death: I urge you to join me.
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Insupporterble Ethics

At the risk of giving Michael Porter greater publicity by posting a blog about him, I have decided to dedicate today's offering to his concept of 'shared value'. If you can spare your eardrums you can hear him discussing this with Peter Day on the latter's World of Business programme (20th January).

On one level this is extremely irritating. The very same Michael Porter, star of the Harvard Business School, scourge of fatty production systems, climate criminal extraordinary, has metamorphosed into a fluffy bunny, worried about fair shares. It is impossible not to be galled by this - and particularly by the fact that he makes arguments diametrically opposed to those he made a mere year or two ago with an equivalent amount of grating self-confidence. Here is Porter post-epiphany, writing in the Harvard Business Review:

'A big part of the problem lies with companies themselves, which remain trapped in an outdated, narrow approach to value creation. Focused on optimizing short-term financial performance, they overlook the greatest unmet needs in the market as well as broader influences on their long-term success. Why else would companies ignore the well-being of their customers, the depletion of natural resources vital to their businesses, the viability of suppliers, and the economic distress of the communities in which they produce and sell?'

But wasn't it this very sort of competition for value creation that Porter's theories of innovation and business strategy generated? How can he move on, without missing a beat, to become Robert Owen's blood brother? And how can we square this with Porter's arguments made in 1995,* where he suggested that there is no trade-off between economy and environment and that innovation can reduce the need for regulation:

'Our focus here is not on the social benefits of environmental regulation, but on the
private costs. Our argument is that whatever the level of social benefits, these costs are far higher than they need to be. The policy focus should, then, be on relaxing the tradeoff between competitiveness and the environment rather than accepting it as a given.'

Fundamentally, of course, Porter and his ilk have not changed their own strategies, which were always about control. Recognising that - in the midst of ecological and financial crisis - the game is up with this incarnation of capitalism, they are seeking to be in control of the next phase. Whether capitalism is adapting in essence or merely in rhetoric remains to be seen - and lies beyond the control of those not part of the Harvard Business elite.

*Porter, M. E., and Claas van der Linde. "Toward a New Conception of the Environment-Competitiveness Relationship." Journal of Economic Perspectives 9, no. 4 (fall 1995).
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The Orgacity of Hope

One of the questions I encounter most frequently is how the vision for a sustainable society we are developing in the market town of Stroud might be applied to the cities where most of the world's population now live. This is a troublesome question for me, because I have never enjoyed the city, with its concrete and anonymity, but from an ecological perspective no question is more important.

Part of the answer is that the transition to a sustainable future will mean different patterns of habitation. The growth of cities mirrors the process of industrialisation and, in particular, the exploitation of fossil fuels on which they depend. There are no two ways about it: cities are grossly unsustainable. Herbert Girardet, who first discussed this issue in the Schumacher Briefing Creating Sustainable Cities, presents some disturbing statistics, including that 'Cities, on 3-4% of the world’s land surface use 80% of its resources'.

Herbie has gone beyond alarming statistics to exciting plans, which he calls 'regenerative cities'. So far the signs of hope have come from urban food growing in cities such as Havana and Portland, but the regenerative city is a whole shift in urban planning and a holistic solution to the unsustainability of the urban environment.

These cities of future - the orgacities of my outrageous title - will, of course, provide for their own energy needs from renewable sources, but in addition they will develop a 'circular metabolism', in contrast to the petropolis which sucks in resources and spits back wastes. They will be diverse rather than monocultural; rather than contributing to CO2 emissions they will be responsible for carbon sequestration; they will be embedded in farmland and provide their own food.

The report is a visionary document, but also contains numerous examples of the best that is already being done in urban planning. The example of Seville, a pioneer in solar generation, and Freiburg, Germany, whose Solarsiedlung development produces more energy than it requires, offer models for the future. However, changing our expectations and, perhaps most importantly, our sense of identity, is at least as important as these technological and design changes.

In the age of the iPad it is difficult to convince the laptop-bound of the simple beauty of the natural world, which they are most likely to encounter through Google Earth. Downsizing and de-energising our cities will offer one priceless gift: the stars. Ecological economist Richard Norgaard recently posted about 'economism and the night sky': he argues that, while technology and urbanism have provided much, what we have lost - and may regain - has deeper value.
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Big Society or Big Profits?

In patronising mediaspeak we are to be told again today that the PM is failing to communicate effectively his vision for the Big Society. While he may be failing in the sense that we, who must be the big society if anybody is, are not following his line of argument, he is not failing in the sense that we are well aware what he is up to. A ComRes poll reported in yesterday's Sunday Independent indicated that 41% of people considered that 'The Government’s Big Society is merely a cover for spending cuts' with only 21% disagreeing, while half of those surveyed thought it was just a gimmick.

Those of us who work in and with co-operatives have long been suspicious of the government's support for social enterprise. Initially, co-operatives were not included in the definition of a 'social enterprise' because they were considered to be motivated by the interests of their members rather than wider society. The definition of a social enterprise is so notoriously vague - involving merely a commitment to the social good and some minimum level of trading - that major global corporations were claiming to be social enterprises while ethically driven businesses owned by their own members could not.

What is important, and can cut like a sharp scalpel straight through the tendentious guff, is the simple issue of ownership and control. A co-operative is a different form of business because it is owned by either its workers, or its customers, or some combination of the two. The value of its business stays with them. And decisions about how the business should work also rest with the workers or members, either directly or - when the co-operatives reach a certain size - through elected boards.

The difficulty co-operatives, and social enterprises, have faced in a capitalist economy is persuading those who control capital to lend them the small amount they need to develop and expand. Overseas co-operative movements have identified this weakness and become effective at recycling their members money, as in the Quebecois solidarity funds, or the Caja Laboral in Spain. The putative Big Society Bank, by contrast, is a capitalist institution, where external holders of capital can make profits from the work of others. The contrast between this the co-operative approach is clear when the discussion moves seamlessly on to a Big Society Stock Exchange, indicating that ownership, too, will be vested not in those who create value in the business but in those who merely trade in its shares.

The important political question is why, when it is the private sector that has demonstrated itself to be socially destructive and ethically irresponsible, is the government focusing attention on 'reform' of the public sector. A policy to facilitate the transition of businesses into co-operatives might be a much more effective way of enlarging society, while simultaneously making 'business' more responsible for social need.

And while this is a highly unlikely policy to emerge from either a Labour or a Tory government (although it would be high up the agenda of a Green one), we should content ourselves with supporting and most importantly joining the co-operatives that already exist. While the media is focusing attention on the People's Supermarket, the efforts of this struggling, individual shop in central London are quite unnecessary. We already have a people's supermarket: it's called the Co-operative.
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