24 December 2007

Turning Towards Each Other

With the year just turning one's mind also inevitably turns to what we have learned and where we are going next year. For people in Gloucestershire this has been The Year of the Flood - a catastrophe which, fulfilling the hope of the management jargonists, has presented us with many opportunities for growth and learning.

Firstly, the foolishness of 'economic development' within a capitalist mindset was made manifest. Take the town of Tewkesbury. Lying at the confluence of the Avon and Severn Rivers it is always going to be at serious risk of flooding. The Abbey there has stood and remained dry for 700 years, but this year it flooded. The reason was unwise building further up the river, removing the possibility of the water moving onto its natural floodplain. Something those who lived in the Dark Ages were surprising enlightened about.

When new housing developments are put in the flood-plain the supermarkets that enable the profiteering are given a superior position on a concrete plinth. Like the cathedrals of old they are now the most revered constructions. Unfortunately, in Tewkesbury this meant that when the flood came people in Morrisons were stranded on an island and had to spend the night in the cafeteria.

Tewkesbury has another flood-plain development planned. This July it was called The Watermeadows but its name has miraculously changed to The Meadows during the summer.

Surviving the floods was a salutory experience, and a very uplifting one after the initial panic had subsided. We amazed ourselves with our resourcefulness, as we found Heath-Robinsonesque ways to channel rainwater into our toilets and wash five heads of hair with half a bucket of water. We found out who our neighbours were (and look after the vulnerable ones) and we found out where our electricity and water came from (amazed that we had never known!)

We were instructed not to flush our toilets with drinking water - some of us realised that this is in fact what we do everyday and thought about ways to make our water use and distribution system less wasteful in future. The most important thing we learned from the flood was that the greatest resource we have is each other, and that in a crisis we do look after each other.

Looking further afield, I was interested to see how attitudes to economic development have changed in Thailand, partly as a result of the tsunami. The country has turned its economy in the direction of sufficienty rather than export-led growth. They are building self-reliance and reinforcing their local communities, as well as finding inspiration from the workings of nature.

2007 has been the year when many people - sadly not many politicians - have started to think seriously about the economics of climate change: about how it will affect their ways of finding daily necessities and the way they interact with their environment and each other.

18 December 2007

Please Stop Talking about Climate Change

It's not just the carbon dioxide emssions associated with the thousands of flights to Bali from around the globe that could be saved if these farcical international negotiations were abandoned once and for all. There would be all the additional hot air produced by over-excited and sweaty men posturing at each other like shaved gorillas. And all that extra methane produced by all those excessive summit-of-extravagance dinners.

Of all the infuriations that arose in my troubled breast during the tortuous days of the Bali discussions the most poignant was the coincidence of the signing of the 'Lisbon' EU treaty, a day before all the HoGs had to be in Brussels, meaning that they had to fly specially to Lisbon only for the tacky signing ceremony, accompanied by lift music. A vast outpouring of C02 just to inflate some Portuguese egos.

I know there are some good people involved in these talks, and I truly wish them well, but the angrier and baser part of me just wishes they would all just fucking shut up. The sight of their hypocritical staged concern while they destroy my planet is more destructive to my soul than can be soothed by the minuscule progress that may have been achieved. How many of those participating are unaware that they can never get anywhere because the negotiators are in hock to the economic interests that cannot tackle climate change without voluntartily giving away their wealth and power?

The pictures show the signatories in Lisbon and the negotiators at Bretton Woods, where this whole crazy system started in 1944. We will never solve the one without addressing the other. A money system based on debt and enforcing geometric economic growth can enver be compatible with sustainability. (I couldn't find a photo of the actual negotiators in Bali - please help if you can). How much has power shifted in the past 60 years: one female out of 27 is an infinite improvement, mathematically, over the no women at all around the table in 1944.


Perhaps the most dangerous thing about negotiations such as those at Bali is the temptation to be sucked into all that displacement activity while what we should be doing is taking the power back into our own hands and sorting out our own economic and social realities. Planet-saving begins at home, not on some paradise island.

13 December 2007

Political, not banking, crisis

The world's central banks have made it easier for the world's commercial banks to increase the amount of debt circulating around the world economy. They began by concertedly reducing interest rates, making it cheaper for commercial banks to lend money. This had little effect, so yesterday they acted together to actively create new money.

It is not clear how this money was 'created' but it was probably by the selling of government bonds, in other words increasing the value of the public debt that we will have to pay off through taxation. Since there is no asset to balance this debt the central banks are guilty of just the sort of monetary inflation that the government says is impossible when policemen want a pay rise. Such action is defensible, it seems, when it is financial investors who want a pay rise.

Is it the fact that the word 'inject' is always used about the creation of debt-money by central banks in this way that leads journalists to use the metaphor of a drug pusher, encouraging debt-addicted banks to go back for another fix? To me the more appropriate metaphor is that of the weak parent.

The role of the central bank is to ensure what the jargon calls 'fiscal probity', which means not lending in an irresponsible way. But how could banks judge what is responsible or not when lending to people to gamble on the future value of unplanted cocoa crops is acceptable? No clear boundaries here. And when the unruly children see their playfully created 'financial instruments' blow up in their faces they are not punished or even reprimanded but simply payed off and allowed to continue. No tough love in the world of banking.


Since the reserve ratio (the proportion between bank lending and assets of real value held in the banks) was abandoned, central banks have only required that commercial banks act with prudence. The purchase of junk assets, such as mortgages held by people with no incomes to pay them back, is a clear example of imprudent behaviour. But do the central banks punish banks for this? Of course not, they just enable this sort of lending to continue.

Central banks, and the governments they answer to, are in an uneviable situation of their own making. Following the ending of credit and exchange controls, the deregulation of financial markets, and the ceding of control of monetary policy to banks by governments, political control over money has been abnegated. The role of politicians was to ensure a money system that served the real economy and our interests as citizens. The role of banks was to maximise profits for shareholders. If things are as bad as they currently seem, and the whole monetary system fails, this will be a disaster for us all.

To see what happened when Argentina experienced a 'credit crunch' see my article.

For more on the creation of money see Richard Douthwaite's excellent (and short!) book The Ecology of Money.

Or you could buy Market, Schmarket where this is covered in Chapter 6.

10 December 2007

Buy Now Pay Later for Public Services

The number of times Gordon Brown has invented funding schemes which would make goodies available now to be paid for by our poor cash-strapped children has made me wonder whether he shares my view of the inevitability of collapse of this riotous financial system we are struggling with - and that was before the near-collapse of Northern Rock.

First there was PFI, in order support which you would have to believe that corporations would cheerfully pay for us to have hospitals and schools now, on the cheap, out of the goodness of their hearts. Then there was the International Finance Facility, which funded 'development' in poorer countries along similar lines. The latest is the vaccination scam, that not only leaves debts for future generations but also lines the pockets of the big pharma corporations.

Unison Scotland have produced a report (http://www.unison.org.uk/acrobat/atwhatcostoct07.pdf) detailing the costs of some of these projects and making it clear how horrendously we have been ripped off by a policy that never amounted to more than jam today at the cost of horrendous debts tomorrow.

According to the report, Scottish PFI/PPP contracts could be costing around £2.1 billion more than conventional funding. The NHS in Scotland is now having to pay rent to the companies that built the hospitals of some £2.4bn. ‘UNISON Scotland’s analysis of official figures from 35 schemes found that estimated public sector comparators (PSCs) were 6.4% (median) cheaper than the contractors’ bids. For just these 35 schemes, that means almost £720m is being wasted - nearly enough to pay the whole of the PFI bill for Wishaw General Hospital.’


In 2006 a report by the Centre for International Public Health Policy at Edinburgh Unversity, found that the debt for the NHS will be far greater than the investment provided by PFI schemes: £2.4bn. compared with £602m. No prized for guessing where the difference has gone.

What is the cost of this to the private sector? They usually argue that the vast sums we pay are to underwrite their risks (there’s that word again), although the risk involved in building a hospital for an ageing population for which you have no shortage of demand and a single captive customer can never have been that great can it?

But in fact we are paying for the risk involved in these contracts – to the tune of £3.5bn. for an insurance policy in case anything goes wrong. And of course if anything does go wrong, as in the case of the tube and the nukes, we know who will really end up carrying the can.

The dubious scheme is being expanded countrywide. Mark Hellowell and Alyson Pollock, authors of the report, estimate that the annual cost to the NHS will rise from £107.1 million in 2005/06 to almost £500 million within the next five years. The mystery about how so much extra spending on health has achieved so little appears a mystery no more.

4 December 2007

Schmarketing

I am extremely chuffed to be able to inform loyal readers that Gaian Economics has been chosen as Green Blog of the Year. I started blogging about a week after Jim produced the top 100 green blogs last year so missed out on that. I was a sceptical blogger at first and was persuaded to learn about this new literary genre by my brother-in-law Nick Batt, who grew tired of me moaning that my book was not selling as well as I wished, and that people didn't like reading more than a page at a time.


So, since the purpose of this blog was to draw attention to my book, I'll include a picture of the cover here, with some extracts from reviews at the end of this post. You can order if from a bookshop or from me (molly@gaianeconomics.org)--best to avoid Amazon! You may also be interested in the internet showcase I share with other green economists of like mind: http://gaianeconomics.org/

The blog is a new form of writing, somewhere between a haiku and an essay. I have really enjoyed learning to thrive in this new medium and nothing beats the thrill of finding comments, particularly those from regular readers. Many thanks to you. Another high point of the year was being targeted by Tory bluggers: a hurtful but confirmatory experience.

So, thanks for your votes. Please keep reading and consider giving me that little thrill! We all have a right to comment on the economic issues of the day.

'Just occasionally, you read a book that gives you an Archimedes-in-the-bath moment. Market, Schmarket is one of those.'--Mark Anslow in The Ecologist

'This is an ambitious vision building book which provides analysis, a historical review of other economic structures and directions for solutions all packed into a readable 180 page paperback. Overall, this is an energetic and stimulating addition to any co-operator’s resource box but Cato intends the book not only for reflection but also for action. So perhaps we should say: buy it, read it, get it in your library, form a book group, act on it!'--Mike Aiken in Journal of Co-operative Studies

'Her critique of capitalism extends to its intellectual lap dog neo-classical economics. She describes conventional economic theory as a ‘catechism’ and demolishes its fetishised concepts such as perfect competition and rational economic man. . . this book is a radical green analysis that provides hope and inspiration by linking a critique of capitalism with new analyses and possible alternatives'--Mary Mellor in Capitalism, Nature, Socialism

'Full of practical examples and suggestions, this is a courageous book which draws on history and the many current strands of critical economic thinking, and attempts to weave all into a coherent whole.'--Nadia Johanisova on the FEASTA website

'Cato’s book challenges us to look afresh at our economic system and to recognise that regulation and reform will not solve the problems it presents. Instead, the values upon which economic activity is based require fundamental re-evaluation. She provides abundant thought-provoking historical and contemporary material that demonstrates the principles upon which a post-capitalist society could be founded.'-- Brian Westbrooke in TeAwa, magazine of the New Zealand Green Party

2 December 2007

Flu, what a scorcher!

If the theme of the 21st century economy is 'Where there's risk there's brass' then health scares offer a fine opportunity for profiteering. Forgive my scepticism in failing to react with delight to the recent announcement from Alan Johnson that the government will be buying sufficient stocks of anti-viral Tamiflu to treat 50% of the population, in spite of the fact that last time we faced a similar crisis only 25% of the population were infected.

[really nice cartoon removed due to copyright conflict: hope to resolve this soon!]

What is the cost of such ardent prophylaxis? The 14.6m doses already purchased on our behalf have cost us £200m., so we will soon be sending another sum of the same size to Roche. Doubts have been raised about whether the drug is effective and the proposed solution is--to also buy another similar drug, Relenza, just in case. Back in 1999 then Health Secretary Frank Dobson respected the opinion of Nice that this drug was so ineffective as to be a waste of money. Threats of legal action from Glaxo soon reversed this decision.

I can't help wondering how much of Johnson's enthusiasm is related to his support for big pharma rather than a realistic assessment of how much Tamiflu we are likely to need. His scientific back-up is not of the most credible variety, coming from chief medical officer Liam Donaldson, he who told us all we were risking blindness by daring to watch the eclipse.

According to its manufacturer, Tamiflu lasts only four years, so this could represent a fairly constant stream of cash for Roche so long as our fears are kept topped up by stories of dead swans, a new marker that winter is finally here. There are big profits in our fears. Perhaps we should all get more of a grip on ourselves. This may be a more likely way to reduce our taxes than another round of civil service job cuts.

27 November 2007

Filthy rich


I have long cherished a vision of how a caring, sustainable economy will replace corporate capitalism. I imagine a hacienda set deep in the South American jungle. It is covered with graffiti and has broken windows--markers of previous violent attacks which failed. But the jungle is more persistent and powerful than the colonial power and green tendrils creep around the building and through the windows until it is completely overwhelmed by nature.

I was reminded of this vision when I first heard Rob Hopkins talking about bringing productive trees and plants into the city. Why shouldn't our verges and parks throng with whortleberries and wild strawberries? Here in Stroud the town council has agreed that in future trees planted in the town should be fruit-bearing. We already have one of our main cycleways planted as a linear orchard, preserving local apple species and providing fruit and conviviality in the autumn

Shortly after I read about Havana's organiponicos, or urban gardens, often roof gardens, I gave a talk in Birmingham called 'Who Will Feed the Cities?'. Walking back to the station through the urban moonscape that is central Brum I began to imagine the car parks filled with productive raised beds, and vines and fruit trees trained along the brick facades.

It has cheered me no end to see a similar vision being shared by advertising creatives. I first noticed the Baxters Farmers' Market soup advert, where the urban cat is replaced by a piglet and a bride's bouquet is made of carrots. This was followed by an advert for E-On where giraffes invade the office and a beaver is found in the water-cooler.

It seems to me that this is the opposite impulse to that which continues to drive well-paid executives into the countryside, which they immediately neutralise and suffocate with their 'city ways'. How welcome to see an invasion of the city by revolting peasants and their filth.

24 November 2007

Buying at Rock Bottom, Darling?

In the industrial era the slogan was 'Where there's muck there's brass'. For the post-modernist entrepreneur this slogan has been replaced by 'Where there's risk there's brass'. For such a person Northern Rock is seeming increasingly interesting. This was the appeal for Philip Richards, who bought shares in the ailing bank at the bottom, sensing that the value of the stock would be determined by politics and not by the market.



Richards is Chief Executive of Hedge Fund RAB capital. This has a hugely profitable Special Situations Fund which Richards manages. The fund almost doubled in size during 2005 and by the spring of 2006 controlled more than $1bn. Richards identified a very special situation at Northern Rock and moved in for the kill.



He has now emerged into the media to exert political muscle. Unlike most of us he has the power to be able to produce a comment piece in the Observer and to have a chat with the BBC's business editor on the Today programme. His view that shareholders should have their investments underwritten by the government to allow the bank to continue as a going concern is in reality a request that we should pay him for an opportunistic business investment.



He argues that if shareholders are abandoned then 'the most important role of banking' which he defines as 'to take short-term deposits and lending and turn it into long-term capital and finance' would no longer be attractive because it would not yield sufficient secure returns. In other words, the government should use our money to prop up a financial system that works against our interests and those of the planet; if it does not, the credit/debt that is the lifeblood of a capitalist economy will drain away.



The affair of Northern Rock is becoming an object lesson in how financial value is fought over in a capitalist economy, a process that is usually concealed behind scenic drapery. As with most companies, the citizens of the UK are 'stakeholders' in Northern Rock, some of us as depositors and mortgage-holders. Unusually in this case many more of us (all those who pay taxes) because we have each loaned an average of nearly £1000 to the Bank. Without handy media contacts we have to rely on our elected representatives to ensure that we receive a fair share of the value we have invested.



The affair also makes clear that, in spite of all the rhetoric privileging the market above all institutions, in a democracy power still lies with politicians. When the shit hits the fan it is the job of politicians to make choices and, no matter how large the tent, somebody will be disappointed by those decisions. That is what politics means: either/or not and. Vince Cable for the Lib Dems has suggested nationalisation; in another blog I propose a mutual solution, but it is the Chancellor's job to decide which side his political bread is buttered.

22 November 2007

The Lean Economy?

David Fleming, one of my many illustrious predecessors in the role of Green Party Economics Speaker and inventor of the Domestic Tradable Quota, likes to use this phrase to refer to a post-carbon world where we are more careful with things. I dislike the phrase and can't help thinking it displays his cultural origins in the 1950s and probably a mother who saved margarine tubs. I remember clearing out hundreds of these and similar junk when my grandmother moved into a home some years back. Ok they were, in relative terms, highly useful items, and had considerable embodied energy, but in the high-consumption world we live in today they were just pointless clutter.

Perhaps that is partly Fleming's point. In response to a similar concern with ever-increasing consumption that does nothing to add to human happiness I wrote an article called 'Sen and the Art of Market Cycle Maintenance'. It was published in the same issue of the FEASTA Review as Fleming's piece but an editorial decision was taken to retitle it 'The Freedom to be Frugal'. I was distressed by the taming of what I considered a swash-buckling title, but more so because I just don't think leanness or frugality will sell well. The convivial economy is far more appealing, suggesting better relationships, more music and dance and sharing of meals; in short, more fun; less stuff.
The point I was making in my article is a simple one: the relative definition of poverty is itself a contributor to the cycle of economic growth, as it colludes with the advertising industry to persuade us that we are deprived if we do not have the latest consumer gadget. Poverty is measured in terms of lists of consumer goods, ignoring the most important aspects of the deprivation we face as we see our natural world devastated and the quality of food and other essentials deteriorate.
In the Thatcher years leanness was considered a laudable quality of 'efficient' companies, by which was meant companies who had removed as many jobs as possible from their operation and exported the remainder overseas to countries where poverty wages and Dickensian employment conditions are still acceptable.
The private sector was keen to slim itself down; the public sector, where unions were stronger, less so. Modernisation was called in to do battle against flab, leading to the agencification of the civil service and more swingeing destruction of jobs. Even before the disastrous evidence of incompetence emerging from HMRC this week it was obvious that the ever-shrinking number of public employees, downskilled and demoralised, were simply not doing an adequate job. Complex phone-switching routines and elaborate computer systems can never substitute for personal interaction, especially where, as in the case of so many government services, intimate and sensitive issues need to be discussed.
So, while the population grows ever fatter our workplaces are becoming increasingly lean. Could we perhaps suggest a relationship between the two? Might the days spent in lean and fit working conditions lead to such despair that we can find no comfort until we reach the relative safety of our homes to slump onto our sofas with fatty meals and cream buns? Ideas merchant though I am, I don't expect to find myself selling 'frugality' with much enthusiasm. I think have more of an affection for a little bit of slack.

19 November 2007

Currency for the Little Big Man

I've often been surprised by the many and varied radical economic initiatives coming out the USA which I have, in my Chauvanistic way, conceived of as the belly of the beast of global capitalism. Well, I suppose the latter is probably largely a correct view, and it is perhaps not surprising that those who live closest to the epicentre of the exploitation have been the most effective at resisting.


In his excellent book Money and Liberation, Pete North describes the struggle to maintain democratic control of the issue of currency in the post-Civil War US. Farmers organised against the 'tyranny of organised capital' and called for democratic paper money rather than the gold-backed money which allowed elites to dominate the economy. Their struggle culminated in the presidential race of William Jennings Bryan as Democratic candidate in 1896. He lost to McKinley, whose campaign had been supported by the plutocrats who reordered US capitalism and tied the dollar back to gold.



In the 1930s, following the collapse of this phase of capitalism, farmers in the South and West of the US again responded by producing their own currencies, known as 'scrip issue'. Nobel Prize-winning economist Irving Fisher supported this development, as did Upton Sinclair in California. His End Poverty in California movement promoted scrip issue as a means of exchange between co-operatives.

In the US today complementary currencies are more about ecological imperatives than poverty, but from Berkshares to Ithaca hours they are providing inspiration and underwriting alternatives livelihoods.

Given this history we should perhaps not be surprised that last week FBI agents raided the offices of the Liberty Dollar in Evansville, Indiana and confiscated the precious metals used to back this local currency. The activists who created it are reacting against the link between the dollar and global hegemony and war, as well as sharing the general loss of confidence in the dollar as reserve currency. Confidence in the dollar is falling globally and several of the nations who are bankrolling the US by buying government bonds could pull the plug on the whole US economy at the time of their choosing.

Aside from control there are sound financial reasons why bankers wish to keep control of the issue of the money we need to function in a complex economy. Conall Boyal has calculated that, if the Chancellor took the seignorage on money created by private banks there would be an extra £80bn. in the UK kitty. At present this money stays as bank profits. See more here: http://www.conallboyle.com/housing/SeigniorageBromsgroveoct07v2.ppt#22

17 November 2007

Rock and Roll Suicide

The immediate crisis at Northern Rock has passed, but only because the government has spent an estimated £40bn. of our money preventing the bank from collapse. This was a desperate strategy, only resorted to because of fears that the collapse of Northern Rock might lead to the failure of other banks and eventually the collapse of the whole banking system.

This is a huge public investment, of the same order of magnitude of the whole of health spending in one year, which is somewhere above £50bn. these days. It raises several questions about the meaning of a democratic society. Perhaps the most important is why a reckless financial institution, that produces nothing of value, can be bailed out in this way, while countless manufacturing companies which produce useful goods and employ many more people have been allowed to fold to conform to the iron law of the market. Clearly, the interests of capital carry more weight than the interests of labour.


The most important questions to be decided now are who should bear the loss of the bad investment decisions taken by the bank's board, and who should see the value of the assets it still holds. Should the British public really be asked to compensate shareholders who made poor judgements? They see the gains when their tricks pay off; what sense can there be in calling this a financial market if they do not also see the losses?


In terms of the assets the vultures are circling hoping to prey on the carrion at the expense of the British public. An offer to pay £1 for the bank is not a generous bid but rather a grab for the significant assets still owned by Northern Rock. Of the 'bidders', Branson and Flowers have both been the beneficiaries of government largesse in the past and scent the opportunity to make a killing. The fee for saving the government's political bacon can be a generous one, giving new meaning to the phrase 'laughing all the way to the bank'.


A financial institution that was once a staid and responsible building society, operating for the mutual benefit of its mortgage-holders and depositors was transformed by demutualisation into a victim of destructive financial speculation, mediated by greedy shareholders who believed in returns to-good-to-be-true and the wideboys to whom they relinquished control of financial destiny.

As an alternative to a state-sponsored corporate buy-out, nationalisation of the bank has been mooted. But rather than a nationalisation resulting in state ownership surely a remutualisation is a better solution. Shareholders, whether instutitonal or personal, can lose their stake as a lesson to themselves and others about rapacious expectations and dodgey dealing. The government can limit public investment to ensuring the value of depositors investments, while the remaining assets of the bank will be the homes of its mortgage-holders.


Governance can revert to an board elected from among the lenders and borrowers of the building society, as was traditionally the case. Calls for independent financial experts to play a major role have surely been utterly undermined by the disgraceful performance their have displayed thus far in this and other banks the world over.

31 October 2007

Competing definitions of a free market

The Competition Commission has found that supermarkets serve customers well. According to the limited economistic, marketistic mindset from which they see the world this is actually the correct conclusion. It is that mindset, and its political support, that we need to unpick in order to understand how they could have arrived at this frankly shocking conclusion.

The problem we face is that, as a society, we are undergoing a paradigm shift. For those of us living in the sustainable world of the future, diversity means a range of types of shopping, different shops or makers selling subtly different versions of the same product, or whose ownership structure or style suits our value system. To the Competition Commission diversity means four monocultural shopping outlets within which you can buy a range of 100 different fish all of which taste of very little. If you only have one of these you lack competition; if you have two the free market is functioning well for you.

For the proponents of supermarkets they are efficient places because you can buy everything you need as quickly as possible for as little time as possible, allowing you more time to make money to buy more. As a capitalist production-and-consumption unit supermarkets allow you to be as efficient as possible. The fact that they rely on global agribusiness which uses 10 calories of energy to make 1 calorie of food (according to Richard Heinberg) does nothing to undermine their claims to efficiency.

Although such reports can lead to unhealthy gnashing and grinding of teeth the real problem is a political one. We are building the new, sustainable, community-focused world we want to live in. Nowhere is this more evident that in the area of food, where most greenies use an alternative system of wholefood shops or have their own wholefood co-op. The producers and distributors, many organised as co-operatives themselves, provide a parallel food economy based on the values of the future.

The problem is that the political parties who operate at Westminster are united in their support of the old way of economics. An enlightened government might link support to local businesses with their positive outcomes in terms of community and sustainability. A restructuring of the market to support local businesses rather than the global businesses who free-ride on the infrastructure we all pay for, and the commons we should share, is politically possible, but only once the stranglehold of the uniformly pro-market parties is broken.

30 October 2007

The Fat of the Lambs

Half a million lambs will be slaughtered but not eaten as a consequence of the latest outbreak of foot and mouth (http://www.guardian.co.uk/animalrights/story/0,,2201110,00.html) Is this a moral, ecological or economic disaster?


In an attempt to increase the 'efficiency' of this process some of the animals' fat will apparently be rendered into biofuel. It is a wonder to me that anybody has the machinery standing idle to perform such a grisly task. Surely the recyclers of used chip fat cannot turn their skills to rapidly towards the unwanted carcases of animals formerly destined for dinner tables?


The anguish over the 'cull' (aka kill) of animals during the first round of foot-and-mouth was always a mystery to me. Why such an outcry over the deaths of animals bred to be killed and eaten? Where did this mawkish sentimentality come from when those who displayed it were not concerned about tucking into to roast lamb and all the trimmings of a Sunday lunchtime?



Aside from this parade of phoney morality there are some genuine ethical issues raised by this whole debate. First, whether it is ever acceptable to eat the flesh of an animal. I am happy to do that when I know the animals have enjoyed respected during their lives; in the case of my own meat I have known the animals by name and been able to interact with them. Counter-intuitively this makes it easier to eat them rather than harder.


Other difficult questions--as yet unresolved to my satisfaction--revolve around the question of whether a wholly vegetarian lifestyle is more ecologically sustainable. I have not yet seen convincing evidence that the UK could be self-sufficient in food grown without animal or oil-based fertiliser. Too many vegans in the UK today are forced to eat a large range of imported foods, especially beans and pulses.


Then there are the double standards of those who are vegetarian and continue to eat dairy, when the dairy industry is closely tied to the meat industry, since male calves can only be put into the food chain or destroyed (http://www.vegaresearch.org/foodnut_vegani_going.asp).


It seems to me that the central economic problem we face here is the setting of all these questions within an intellectual framework dominated by market and profit. The 'wasteful' slaughter of cattle and sheep during a foot-and-mouth outbreak is entirely market-driven. Vaccinated animals are not acceptable for the export trade, while animals that have survived foot-and-mouth (as most do) will weigh less and therefore generate less profit for the cost of raising them. Since they offer no threat to human health, they could otherwise pass into the food chain as they do in other countries.


In a similar way the Welsh and Scottish hill-farmers are involved in production on an industrial scale that cannot allow for flexibility in terms of the quality of product (slightly older sheep) or when it reaches the market. No doubt the lamb that will be produced over the next few weeks would be welcome to many hungry mouths in this country and abroad. But this would be to 'distort the market'. Similar arguments were made during the Irish potato famine when oats were being exported to feed horses in the UK while Irish people starved.


The story offers yet more reasons why we should explore the ethical underpinnings of the market within which food is produced, which was always a social construct and therefore open to a different system of values and to a radical reconstruction in line with the general welfare, rather than the profit margins of the large-scale businesses who have created the dubious and far-from-free market we operate within today.

25 October 2007

Clone Towns, Drone Towns and In-the-Zone Towns

I have been spending the past couple of days undergoing the slightly unpleasant experience of unpicking a long-held prejudice. The specific item is my dislike of 'the home counties', a mythical region I imagined as extending in all directions around London about as far as Dorset, in the West, and East Anglia in the North. I had imagined it stuffed full of Tories and snobs ever since unpleasant experiences with some public school alumnae many years ago in Oxford.

The Transition Town of Lewes was, consequently a revelation. Sussex is apparently outside any conceiveable definition of 'home counties' and even I could never have included Brighton in the realm of received pronunciation, over-indulgence and inexpressibly repressed emotions personified by Celia Johnson. But Lewes turns out to be a home of anarchists and subversives with enough rebelliousness to keep me happy for a lifetime.

Tom Paine lived there for a number of years. I love Tom Paine because he not only engaged in practical revolution but also indulged in numbers, personally recalculating the national accounts of his time in a notebook to demonstrate the rip-offs at play. This subversive spirit has continued in the annual ritual of Bonfire held in the town which led to the last reading of the Riot Act in 1847. Ostensibly a local extension of the national 5th November celebrations, Bonfire in Lewes is surely in reality a revival of much older anti-authoritarian pagan rituals.

Lewes residents have expressed their anarchic spirit more recently by refusing to accept the new parking scheme imposed on the town against the wishes of the citizenry. The local council had underestimated the pyrotechnical expertise of its opponents and so many of the meters have been blown up that the scheme is generating massive losses. The latest high-tech version can apparently wail a warning that it is about to explode but this has done nothing to lessen the level of attacks.

Since this blog has found its niche by focusing on economics I should mention that Lewes, in spite of all its character, has, according to the most recent survey, moved to the borderline between home town and clone town according to NEF's definition. I am sceptical about this. The town still thrives with local shops and is nothing like the drone towns producing willing workers for the City of London suggested by my now-foresaken prejudice.

I have always prided myself on living in havens of radical thought--Wales or Stroud to name but two--where we were right-thinking and shared none of the opinions of the media Utopia. But it is beginning to dawn on me that the media literally creates a utopia--a non-place--where we are all narrow-minded and selfish to conceal the fact that the whole country is in fact heaving with dangerous radicals.

22 October 2007

It's a ballot, Jim, but not as we know it

What is it about numbers that makes us so competitive? Being an economist I live in a world of numbers and so I am always deeply sceptical about them. So what am I to make of the fact that I appear to have been ranked seven in a list of green blogs in the UK? This is a datum that confuses me personally, as well as statistically.


Let's start with the easy stuff. The number in itself is meaningless unless I know how many green blogs I am contending with. Last year it was 100; this year only 20. Has Jim eliminated the rabble to allow more glory for those of us who remain? Or have the serious people found something better to do, so that even being 7 out of 20 only proves I have been left behind in the rush to the next great media revolution?


Perhaps Jim didn't even rank the list, allowing the citizenry to do that via the People's Vote. And if he did how does 7 compare with 1: is it seven times less good? Are we dealing with logarithmic scales here? Incidentally, while I'm on the subject of numbers, have you ever noticed how, when media people get into discussions like this one, they start referring to rocket scientists. As though finding ways to travel to other distant planets to colonise and mess them up were somehow cleverer than finding a way to survive on our own beautiful planet, which already has life on it.

What is distressing me most about this process is that I actually care about it. I am a sad competitive person masquerading as a co-operative green who isn't interested in status. Can I blame it on capitalism, the need to compete to survive, or is it just my personal karma? This is summed up by the fact that my deepest regret in life is never having been on University Challenge, although this may now have been surpassed by the regret that I didn't write the book called Starter for Ten.

Oh, shit, there it is again: a number. Why ten points for a correct answer, rather than 1 or 20 or 200? That is such a University Challenge thing isn't it? You know what: I've depressed myself. This strange relationship with the numerical is what being an economist does to you. . . I would still like your votes, though. You'll have to go to Jim Jepps's site at: http://www.jimjay.blogspot.com/ to help me out of my misery. Or will it just make it worse?

18 October 2007

The Fat of the Land

More horrifying and frankly bewildering statistics about the increasing number of fat people in our society were fed to us with our cornflakes this morning. My main confusion arises from the fact that 'by 2050 most of us will be "obese"' which my mind automatically substitutes with 'by 2050 most of us will be dead'. Perhaps it's just the time of year?

You may have noticed that I refuse to use the word 'obese' outside protective quotation marks. This is because being fat is something we all understand: it is a normal human condition resulting from a combination of eating too much and not using up enough calories through exercise or thought (yes, I know, but indulge me!). Obesity, on the other hand, is a medical condition for which, down on the pharm, they are busy developing pills they can sell to us at vastly inflated prices creating fat profits to match their fat customers.

While fat may indeed be a feminist issue it is also decidedly a class issue, but not in the direct way we are led to believe. The relationship between over-eating and health has been found to be related to the structure of society under capitalism, rather than a class-related propensity for eating too many chips. In Britain on the Couch Oliver James argued that the competitiveness inherent in a capitalist economy and the hierarchy it generates leads to low serotonin amongst the ‘losers’ in society.

Later research has shown that the levels of serotonin in the brain are, indeed, lower in middle-aged men and women in lower social classes. A relationship has also been identified between lower serotonin and over-eating, as well as smoking and drinking alcohol to excess. In other words it is the unequal distribution of power, and the chemically based depression this creates, that is a central cause of the increase in obesity.

Food is the most basic of all human needs. Capitalism is failing to meet our need for food adequately. The food that is available is often so adulterated and so lacking in basic nutrition that it creates ill-health and cravings for other, more satisfying foods. The connection between food and the locality, the identity that is built through seasonal foods or local cuisines is being destroyed by a global fast-food culture.

More fundamentally still, the distribution of food between the West and the South is so poor that, we sit unhealthily on our sofas, obediently over-eating, while watching our brothers and sisters starve in Africa or North Korea. This is a fundmenteal indictment of capitalism as an economic system: it is failing in the central role of an economy, the efficient distribution of our most basic commodity, food.

16 October 2007

Transition Towns Make Money!

In spite of my advanced years I have recently embarked on a new career as the face that launched a thousand community currencies. Well, ok, just one so far with another coming soon and an open invitation to Brixton for something exciting in the near future. Next week on 24th I'll be in Lewes launching the community currency associated with the Transition Lewes process. In terms of Transition currencies I'm hoping to keep my 100% record, so invitations are welcome.

You may be wondering why Transitioners have the creation of a community currency as one of their top priorities, alongside growing carrots and eco-building. Why should such practical folk consider the effort involved in launching and sustaining a community currency to be worthwhile?

The disasters at Northern Rock exemplify the most important reason: the global financial system is, if you'll excuse me, rocky. Yes I know I'm an economist and so money is my bread-and-butter in a way it isn't for you (and you would not believe how difficult this makes decisions about mortgages and so on) but if you begin to think what life would be like without a functioning monetary system you may come to understand this sense of urgency.

In fact there is no need to imagine it because this situation happened, just a few years ago, in Argentina. The default of the peso led to a monetary vacuum into which commodities such as grain and soya became sucked, to become useable as currency. But the local currency that environmentalists had established a few years before was more flexible and soon became the main medium of exchange. You can find out more about this and its implications for local currencies in this country here: http://www.uea.ac.uk/env/ijccr/contents.html

In numerous other communities from Hungary to New Zealand and from South Africa to the USA local communities have decided to extract their labour and their lives from the global financial system and its inequities. In the case of the Transition Towns the impulse is predominantly about increasing resilience and ensuring that, if climate change brings financial meltdown on the Argentinian pattern, we will have a functioning shadow currency system to turn to. Peter North describes the adventures of these various pioneers in his book Money and Liberation (http://www.upress.umn.edu/Books/N/north_money.html)

There are quite a few questions for community activists seeking to launch their own currency. Should it have decay built into it by imposing demurrage, a sort of reverse interest that means money is gradually worth less over time? The mechanism was invented by German economist Silvio Gesell to increase the velocity of circulation of money, thus increasing economic activity during the 1930s recession in Europe.

But is this idea compatible with the green economist's wish to reduce economic activity? Perhaps the two motivations could be made compatible if the economic activity stimulated in the local economy displaced the more destructive global activity?

Should you deposit money in the bank to back the currency and allow convertibility? This certainly encourages confidence in the currency, but limits creation to the amount of sterling you can spare. Jonathan Dawson, Co-ordinator of the Global Ecovillage Network and a key player at Findhorn, told me that their currency, which is backed in this way, is acceptable at the rate of 100% in their local pub. Now that might get the punters interested.

10 October 2007

Going with the Grain

We have ignored the warnings about climate change in spite of floods, the total dislocation of our seasons, and undeniable impacts on familiar wildlife species. This autumn we are, for the first time, seeing major increases in prices of the very staple foods we rely on to exist. Will this persuade us to change our lifestyles?

It is a curious fact of life that the staple starchy foods of the most developed societies are grains. And an increasingly important one, as many of these grains are now being used to produce biofuels. As Rob Hopkins, founder of the Transition Towns movement in the UK said recently at a conference I was at, biofuels offer us the unattractive future of starving to death in a traffic jam. This future may be closer than we thought.

The first nation to experience a threat to their national staple have been the Italians, facing 30 per cent increases in the price of pasta as a result of an international shortage of the durum wheat used to make it, 40 per cent of which is imported. Italians have relied on imports from overseas, especially Canada, but the Canadians are putting their own needs first, or selling grain to the North American biofuels industry instead.

Last year the price of our national staple, bread, rose as a result of drought in Australia. This year's bizarre weather patterns have also affected wheat harvests. The National Association of British and Irish Millers (yes there is such a thing!) documents increases in wheat prices and predicts further increases this autumn. An all-time high of £190 per tonne was reached in August, with increases to £192 predicted for next month, some £90 per tonne higher than the equivalent period last year.

I'd like to feel smug about this and say that relying on my local community-supported agriculture farm, which is a short walk away, has insulated me against the vagaries of the global capitalist food distribution system. The problem is that while the theory of that is fine--closed loops, self-provisioning, minimal foods miles and so on--virtue is no insurance against climate change. First we had drought, then we had floods and all year we have had a plague of slugs. The potato blight has been something biblical.

In terms of national policy I would still feel considerably more confident if we were not so reliant on one foreign breadbasket or another to dispatch laden trucks over increasingly long distances to provide us with the staff of life. I wonder how long we will be waiting for a national Food Czar to be appointed.

5 October 2007

Blessed are the Meek

I have to say that there are few things I find more depressing than working-class Tories. People voting for their own oppression; turkeys voting for Christmas.

When car stickers started appearing on fairly modest Fiestas calling for an end to Inheritance Tax and I noticed the Daily Mail campaign to the same effect my heart sank. How can it be that the relatively poor have been conned into campaigning against a tax designed to share the wealth of the rich when they die, to prevent them from continuing to exercise their power from beyond the grave?

This has now become the headline-grabber from the Tory Party conference: only millionaires will pay tax in future. It has been packaged as a victory for the little guy. In reality it is a liberation from the oppression of taxation for those whose estates are worth hundreds of thousands of pounds which should rightfully be redistributed to the dispossessed who inhabit the wildernesses of run-down housing estates.

Even the Telegraph admits that only 6% of estates pay inheritance tax (http://www.telegraph.co.uk/news/main.jhtml?xml=/news/2007/09/24/nwealth124.xml), so this policy will benefit the richest sector of our population and disadvantage all those Mail readers who are being hoodwinked into supporting it. Inheritance Tax is not a left-wing wheeze growing out of the politics of envy. J. S. Mill was in favour of all wealth reverting to the state on death, and right-wing economists regret the passing on of wealth through the generations, which saps younger generations' entrepreneurial zeal.

A few years ago I attended a seminar organised by the Fabian Society--a well meaning attempt to 'modernise' Inheritance Tax to prevent just this sort of campaign to abolish it. The conclusions were fair, simple and obvious. The most helpful, which is also Green Party policy--hence my invitation--was to make the amount of tax paid relate to the wealth of the inheritor rather than the inheritee. Thus people including more relatives and friends, and especially poorer ones, in their wills, could effect distribution according to their own choice of beneficiaries.

An old friend used to say that where there's a will there's a relative. The disheartening conclusion to the media discussion of Inheritance Tax is that where there's a Tory spindoctor there's an ill-informed toady willing to believe him.

4 October 2007

"Free Burma!"

26 September 2007

Mitigation, Adaptation, or Manipulation?

The official version of the agenda resulting from climate change is that we must have 'adaptation' and 'mitigation'. Mitigation means changing the way we do things so that we don't make the problem worse; adaptation means building the best defences we can to protect ourselves against the negative effects of past behaviour.

For the discourse analyst this is an interesting turn of events. We are being encouraged to think that there are just two options, limiting the political space and the territory over which we make claims. This is the strategy proposed by Supernanny when she offers the child the blue jumper or the red one, neatly avoiding the fact that s/he really wanted to carry on watching TV in pyjamas.

Essentially the debate becomes framed in terms of balancing spending between flood defences and renewable energy, or between changing travel methods and making our homes capable of withstanding higher-strength winds. The framing of the debate in this way rules the big questions out of the debate. Questions like what it is about our economic system that has ended us up in this mess. And what a sustainable economy might look like.

Academics refer to this discourse move as 'ecological modernisation': the suggestion that we can come up with an appropriate response to climate change without fundamentally changing social and economic structures. This is why, instead of moving towards low-impact rural development, the governments approach to eco-building is to push the concept of 'zero-carbon homes' and hand the problem on to the private sector, in spite of considerable evidence that they have neither the expertise nor the flexibility to respond in time.

In the days before The Ecologist was edited by a prospective Tory MP it's tagline was 'Challenging Basic Assumptions', something I can recommend you practice daily. When offered a simple choice in a tight spot always remember Supernanny.

20 September 2007

Dramatic Demise of King

Journalists who are referring to the appearance of Mervyn King before the Treasury Select Committee later today as 'theatre' are for once not over-dramatising. His inevitable humiliation by the bankers can be seen as the culmination of the second act of a tragedy we all share in. The end of the first act was the appearance outside No. 11 of Chancellor Norman Lamont in 1992.



The ashen hero, brought low by his hubris, enacted a classic moment from Greek tragedy. He had overestimated his power and faced humiliation. His efforts to prove that the British government was in control of the British currency in fact proved the reverse: since financial deregulation and the globlisation of currency trading the large players in the markets are more powerful than governments.



So what can we expect to happen to Mervyn King today? He appears to have become a victim of his own economic theories, failing to see that phrases such as 'moral hazard' have always been merely fig-leaves to cover the political manoeuvrings of the dominant forces of capitalism. It is the owners of capital who really control the economy not the espoused objective and neutral forces of the market. When King refused to allow the banks the extra money they demanded surely his fate was sealed.



The agent provacateur of this drama appears to be another former Chancellor, Kenneth Clarke, who has been sharing his avuncular opinions across the range of media outlets. Views on why him, and what his game is, would be welcome.



Meanwhile focus on the need to change the 'tripartite' regulatory system is misplaced. Rather we need a system where politicians have the courage to take back political control over the monetary system, and to replace money creation by banks, as debt, with a system where government spends money into circulation for the public benefit. A truly creative solution would link this to carbon rationing and both a business and individual carbon trading system.

18 September 2007

Bursting the carbon bubble

The government hopes it has now stopped the decline in the asset base of Northern Rock by offering guarantees that all savers' deposits will be repaid in full. Let's enquire a little further into this guarantee. Where is the money coming from? The Bank of England, the government's bank, will supply it to the Northern Rock but it will be government money, or rather our money. Cash haemorrhaging across the counters of the bank will be replaced by a steady transfusion of public money, money that might have been spent on better hospitals or schools.

The most obvious problem with this is that it is transferring money from the poor (e.g. those who shovel chips or sweep streets and pay their taxes) to the rich (those with money in hedge funds). It also provides a huge incentive for the gamblers in the global financial casino to continue their high-risk strategies, knowing that when they fail it will be the working people of this country who will bail them out.

Since giving away the power to regulate financial markets with Big Bang in 1986 the government has irresponsibly left the management of the money system we all rely on to city speculators. The ideology behind this was essentially the Adam Smith doctrine of the invisible hand: if lots of players act with individual selfishness the outcome will be to the benefit of all. But it hasn't been. It has been to the benefit of those with more knowledge of, and power in, financial markets.

But even if any politicians who is accorded air time were to argue for the taking back of political control over the fundamentally important monetary system of this country how could that be done without precipitating exactly the sort of collapse that causes such social distress as witnessed in Russia frollowing the break-up of the Soviet Union?

The ideal would be to manage the descent in the consumption imbalance between rich and poor, whether we are thinking of individuals or nations, in conjunction with the managed decline in the production of carbon dioxide. This is entirely consistent with evidence showing that there is a close relationship between wealth and behaviour which causes climate change.

The debt bubble in the international financial system is funding by the purchase of US government debt by the booming Asian economies. The Contraction and Convergence model (http://www.gci.org.uk/contconv/cc.html) offers a mechanism for equalising carbon dioxide emissions on a global per capita basis and thus a means of rebalancing this relationship. Introducing the TEQ or tradable energy quota in the UK might be one tool to reduce consumption: if it could be linked to a managed withdrawal of debt from the national economy we might move towards a future that is financially, as well as ecologically, stable.
You might like to investigate this online petition: http://petitions.pm.gov.uk/NoCityBailout/

14 September 2007

Solid as a Rock?

Rumours about the likelihood of a financial crisis are swirling and it is difficult to ascertain exactly what is going on. Especially since now is precisely the time when we are least likely to be told the truth. Our job is to act as ignorant punters and keep playing the game: shut up and believe what we are told by our superiors.

The key objective of spokespeople from the financial casinos is to reassure us. If we really thought about how unstable our financial system is, we would instantly take fright and the system would fail. This is why we have Angela Knight, Chief Exec. of the British banking industry, explaining in calm and measured tones on the Today programme that we have nothing to fear.

Ms. Knight, former Tory politician and Economic Secretary to the Treasury in the last years of the previous Tory administration, exemplifies the way politicians and bankers collude to back up a financial system that enshrines inequity and instability. For more on her activities check out this profile by the Independent: http://news.independent.co.uk/business/analysis_and_features/article2300459.ece

Nowhere are the metaphors of economics as myth and catechism so beloved of green critics more apt than in the arena of finance and banking. While we might imagine that the cited value of banks and building societies relates in some way to their holdings of property or real assets, in fact the only support they have is our faith. Without confidence, investors will recall their money and the financial institution will be unable to pay. Risky lending may have enabled the banks to create cash and boost their profits, but if debtors begin to default the gap between the banks' assets and their ethereal value will become clear and bank failures will occur.

The problem for Northern Rock is that those with more inside knowledge than we are privy to, in this case other banks, are refusing to lend it money to conduct its business. Presumably they feel that the building society's recent huge expansion of mortgage lending has not been prudent. If too much of its asset base is made up of grossly over-valued houses, a small fall in the housing market could lead to insolvency. The intervention by the Bank of England as 'lender of last resort' to plug this liquidity gap has not happened since the oil price shocks of the early 1970s.

So we should listen carefully and watch the manoeuvrings of the high priests as they intone their incantations and weave the myth of security and stability, a myth encapsulated in the name of the very institituion that is wavering: the Northern Rock. What we have seen this morning is the government and the banking industry working together to convince us of the solidity of the system. The black knight and the Scottish darling clinging together as they glimpse the potential disaster of the whole financial system, and then the whole unstable economy they believe in, hitting the rocks.

12 September 2007

Beware the Blandishments of the Tescopolist

Capitalism is threatened by climate change and it is responding. I offer as evidence Tesco's endowment at Manchester University of a Sustainable Consumption Institute. You will have heard arguments recently that New Zealand lamb or Kenyan cut flowers are actually more sustainable than locally grown alternatives. It is in order to produce data to support claims such as this that the Institute is being funded. Its existence proves not only that our higher education system has now become the prostitute of globalised capitalism, as Thatcher long ago intended, but also that capitalism is adapting to the strictures climate change brings.

Tesco is getting extremely good value for money. They are investing a mere £5million in return for which they will divert the energies of a sizeable group of leading UK researchers to justifying their own corporate ends. They are also using this to repair their tarnished media reputation, including by claiming magnanimity in sharing the research findings with others. So you should think yourself lucky that you will be able to use Tesco's figures to justify the globalised economy without having to pay them for the privilege.

But can capitalism ever make itself sustainable? As an economic system it relies on the extraction of the surplus value of workers and the planet to pay for all the various parasites who do no work but live from ownership and investments. As such it is a system that meets the needs of the majority in an inefficient way, because the needs of the greedy minority must be satieted. As Gandhi put this so eloquently, 'the earth has enough to satisfy every man's need but not to satisfy the greed of some'. The very nature of this unfair system of distribution puts pressure on the planet as well as on those who sell their labour.

In the globalised capitalist system most work is done in the countries of the Global South, translated from de jure into de facto colonies, their resources and their labour power still stolen by the rich West, but these days through the less unsightly mechanisms of trade treaties and financial organisations, and with armies reserved for extreme situations only.

Globalisation represents the ultimate victory of the notion of 'economies of scale' that economists love so much. Now the scale is that of the planet as a whole, with corporate barons organising who shall produce what where and fixing the prices. Failing to respect Nature's scale has led to the huge imbalances of wealth and well-being we see around us, as well as creating climate change through the unncessary production of transport-related carbon dioxide emissions.

Finally, the way capitalism creates money, through debt-based bank money, requires the constant expansion of the economy without regard to natural limits. I have blogged about this elsewhere: it is really the most fundamental explanation of the link between capitalism as an economic system and planetary destruction.

I have been in this game for a while now so I have become fairly experienced at spotting a corporate scam. Hence I was intrigued by the arguments about the distribution system of globalisation being more sustainable, not to mention more supportive of our brothers and sisters in the South. I was also depressed to notice how many good people I interact with were swallowing this line.

Sadly my own resources for investigating the assumptions on which the justification for buying New Zealand apples in the UK in September are limited. And I don't suppose Terry Leahy will be offering me money to explore my proposed alternative of bioregional distribution systems any time soon.

6 September 2007

Trading on the Yin

It says something about the relentless pressure of capitalism that I feel a need to apologise for having taken the whole month of August off work, and mainly offline and away from computers. I am torn between celebrating this and recommending to others that they live their principles in this way, and feeling guilty that I have dared to step off the treadmill.



It has been an interesting few months of talks, rest, reading and festivals. I know that most of the original and creative work I do happens during what is officially labelled as 'holiday' and that most of my good ideas come when I'm sitting on a bus or lying in bed. Strange, then, that I value the hours spent here, staring into a luminscent screen, giving myself RSI so much more.



Of the many things I've learned over the summer the most exciting is about Country Markets. As part of a commitment to encouraging local trading we developed a concept of 'fayre trade'. This takes as read the principles of fair trade, but supplements them by a commitment to reducing consumption and substituting local production and exchange for involvement in the globalised market wherever possible. However, having learned about Country Markets I am beginning to think we may have been reinventing the wheel.



My own product is face cream, based on my own need for something to deal with my arid skin which splits and re-splits throughout the winter. Producing it to a standard I'm happy with is surprisingly easy. I'm using organic ingredients and recycled jars collected from friends, and trying to keep inputs as simple and local as possible. The energy embodied in conventional, petroleum based skincare products is shocking, not to mention the unpleasantness of smearing paraffin on your skin.



Creating a market for such products is more of a problem. Legislation is widespread and intimidating and probably devised by the corporate-dominated EU mandarins to deter the small trader. But Country Markets, formerly part of the WI but now hived off, has found ways around this, including fighting the notorious Jam Law through the House of Commons in the early 1980s. Their local markets offer the opportunity for the small, local producer or enthusiast to trade at minimal cost. Despite the traditional jam and cakes image of the WI market, produce is not limited to food. It costs only five pence to join and is genuinely co-operative. For more see http://www.country-markets.co.uk/content.php

8 August 2007

Lies, Damned Lies, and Accounting


I spent a small but significant amount of time yesterday searching for a cost code to justify the spending of 60 pence. I mention this partly, I confess, to get the frustration and rage that caused me to scream in my office and cause consternation to my colleagues out of my system. But also to offer it as an example of how, in an era where the accountant is an unlikely king and accountability is espoused on all fronts, the petty is rigorously enforced whereas fraud on a grandiose scale is routinely ignored.

I am thinking, you will have guessed, of corporate fraud, of the type practised by Enron executives. Inflating the value of your stock by counting money you haven't received or even invoiced for yet. That particular techniques, known as counting 'unbilled receivables' was invested by the leading accountancy firm then called Arthur Anderson. Oil companies also engage in this creative accounting when, as Shell recently admitted it had done, they overestimate the value of their reserves, which, in oil companies terms, is the value of your companies and hence your stock.

It appears that the rule is, the more preposterous the fraud the more unlikely it is that we will notice. As Kierkegaard famously pointed out about Christianity, if you want to get a whole mass of believers you need to create a really big lie. Which brings me to the money system: the biggest example of fraud that it is virtually impossible for us all to avoid. Galbraith pointed out that the gap between one financial collapse and the last is roughly equal to the length of time it takes those who suffered to forget about it. You can find it detailed in economics books, but who is daft enough to wade through those?

So, here is a brief quotation from Galbraith about how the last crash came about:

Speculation begins when a price is going up and the presumptively wise expect a further increase. They buy and thus produced the increase. More buy, and more and yet more are attracted. Each price increase affirms the good sense of those who have bought before. Those who doubt are reviled as creatures of defective imagination. The buying and the supporting mood continue until the available supply of mentally vulnerable, economically viable buyers is exhausted. Then come the changed views of the prospect, the rush to get out, the pressure now of creditors demanding repayment of the loans that financed purchase, thus forcing sale. In short, the crash.

Sound familiar? I wouldn't be taking on too much debt if I were you. If you own bricks and mortar it is still yours after the crash. But if you own debt it will not be very much use to you.

25 July 2007

Lilley's Little List

I had the unpleasant experience yesterday of having to endure listening to a Tory being compassionate. This is always a nauseating experience. For those of us over 40 Peter Lilley must be best remembered for his appalling rendition of Gilbert and Sullivan at a Nuremberg-style Tory conference in the 1980s. A hate-list including single parents and the work-shy. No wonder his concern for the world's poor and his magnanimous offer to solve their problems through increased trade rings hollow.
The evidence to support his view that poor countries can grow rich through trading with rich countries is simply not there. The World Bank’s many papers showing improvements in absolute standards of living in developing countries are subject to question. There is a strong suspicion that the only way they can be shown to have grown richer is by a classic tactic of corrupt science: averaging. Based in the utilitarian paradigm which assesses the overall rather than the individual good, this tactic is clearly part of a capitalist worldview which privileges the needs and benefits of the elite over those of the mass. It is from this perspective that a national income measure that has increased and can then be divided equally between all the heads in the country—even when the wealth itself is clearly not—can indicate an improvement in the poverty situation facing that country.

This represents a tactical change for capitalist apologists on the issue of poverty, foremost among them the economists of the World Bank. It has proved necessary in the face of the striking evidence of starvation, destitution, and death. The claim is now that some in the poorer nations may have grown poorer while the country as a whole has improved its position. As well as the averaging problem this line also has the benefit of being conducted at the level of macroeconomic indicators, which are far easier to manipulate and obfuscate than starving children. So, the evidence that the gap between rich and poor is widening is irrefutable, although in some, but not all, of the countries following the IMF model the poor may be becoming better off in absolute, and usually monetary, terms.

Direct evidence of the impact of trade shows that this small and distorting increase in national income is bought at a high price. An UNCTAD report in 1997 showed that out of a sample of ten Latin American countries, in nine of them the differential in earnings between skilled and unskilled workers had increased as a result of opening up markets to international trade and that in most of the countries the real purchasing power of the least skilled workers had actually declined, in several cases by more than 20 per cent. International Labour Office data show that of 30 countries studied in Africa, Asia and Latin America, wages in two-thirds of them had fallen between the late 1970s and late 1980s, and the wages of the least skilled had fallen fastest.

In 1999 a paper from the World Bank reported on data for a sample of 38 countries between 1965 and 1992 to show that opening markets up to trade had reduced the incomes of the poorest 40 per cent of the population, while increasing those of the richer groups. The World Bank’s commentary was that ‘The costs of adjusting to greater openness are borne exclusively by the poor’. Mies and Shiva argue that the liberalization of markets is a deliberate policy to reduce subsistence and force the poor of the world into the capitalist labour-market, ‘The displacement of small farmers is a deliberate policy of GATT’. The policy has had a serious and negative impact on levels of hunger: ‘A conservative estimate of the impact of so-called liberalization on food consumption indicates that in India, by the year 2000, there will be 5.6 per cent more hungry people than would have been the case if free trade in agriculture was not introduced. Free trade will lead to a 26.2 per cent reduction in human consumption of agricultural products.’

Developing countries have spent these thirty years on the economic rollercoaster of international trade, because of the dogma from international bodies suggesting that this will end poverty, while at the same time the richest people in these societies have used this international game to increase their own wealth while the poor in the same societies have grown poorer. The overall gains from trade are minimal to the countries producing agricultural products: between 1986 and 1996 Ghana increased its exports of cocoa by nearly 80 per cent but only earned 2 per cent more in return.

16 July 2007

The Beauty of Thrift

I spent the weekend camping in rural Hertfordshire. I suppose it is difficult anywhere in the home countries to feel really in the countryside, but we were in a meadow full of wild flowers with a woodland and vegetable patch nearby.

Lydia has created utopia in a small patch of the South-East. Thrift Cottage is named after Anne Thrift, who left to Lydia the right to inhabit a small patch of Welwyn which she had enjoyed since before the passing of the Town & Country Planning Act in 1948. It so aptly describes the approach Lydia, and more recently her husband Robert, have taken to building the home they share with Scarlett.

Regular readers will wonder about my scatological tendencies, but I none the less need to share my excitement with Lydia's bathroom. Her toilet is a long-drop compost loo. You sit on a beautiful piece of retrieved hardwood which is always warm to the touch. You sprinkle a small quantity of fragrant sawdust, rather than flushing away your shit. All this takes places in an environment of tranquility, with wooden bookshelves and built-in wooden cupboards.

The whole eco-house exemplifies the attitude towards life that we need to foster to live in balance with nature. Opportunism is a key feature, with bricks, slate and wood scavenged from local skips and building sites. This is the Robinson Crusoe approach to building—making use of what your local environment provides—rather than driving to a builders’ merchant to buy building materials made elsewhere in the world—who knows where? I recently saw building stone wrapped in cling-film. It seems superfluous to mention the embodied energy both in the manufacture of bricks and blocks, and in their transport.

Other highlights included an outside bath: fill first and then heat by lighting a fire underneath, a summer pudding made with fruit picked in the local fruit patch, and a relaxing time spent on the turf roof.

Due to inept maintenance of the tracks and unfriendly timetabling I was forced to spend three hours of my homeward journey in Stroud. It was like a journey from the heights of the human spirit to their miserable depths. While I confess it is hard to imagine what the vernacular building style of Swindon might be, I cannot believe that it could be worse than the uniform blockwork, steel and glass, interrupted by mislaid tent-like structures, that is the landscape of Swindon today.
I made one of my increasingly infrequent visits to Tesco to buy an apple and noticed that the local media story was of a local murder by a young man of his mother and father. It felt possible to understand how somebody living in that degraded environment could be driven to such a level of cruelty and despair.

11 July 2007

Hell fire or a bottle of Bulgarian red on the beach?

The early industrial workers were faced with a stark choice: a joyless life of work or an eternity of hellfire. It is unsurprising that so many took Kierkegaard's way out and struggled to keep a faith in eternal life. In a similar way many lives are being stolen today by an economic system which finds its own supportive ideology in the forced-work ethos of New Labour.

Like the beliefs of their Protestant antecedents, Labour's apparent belief that work is a universal panacea to solve all our social and economic problems can only have its source in faith. It has no basis in either fact or experience. As Brother Gordon intones from his postmodern, designer pulpit to the faithful journalists, the glint in his eye gives a clue to the messianic origin of his political project.

In fact the obsession with work pervaded Christianity for only a small part of its 2000-year history. Despite the odd desperate Biblical reference to his training as a carpenter, it is obvious that Jesus Christ himself was the prototype hippy. It was Jesus who advised his disciples to "Consider the lilies of the field; they toil not, neither do they spin". He spent most of his adult life telling stories, discussing the meaning of life, begging food from friends; and he had long hair and wore sandals.

The problem with religious commitment, however, is that it does not allow this sort of argument. We are not permitted to take issue with our Prime Minister about how we would like to spend our short span here on earth, either we take up our oars on the slave-galley of the economy or we are wicked sinners to be cast into outer darkness. Like Torquemada, enforcing belief in an insane ideology with the fire of the Inquisition, to be acceptable in New Labour Britain we must spout the litany of holy work: yes, I enjoy my job; since beings made redundant I have spent every hour on my bicycle seeking work; I don't enjoy being unemployed; I wish I could spend all my waking hours licking up toxic waste like you do (melody available on request).

The political commitment to work for all is taking on totalitarian dimensions. It is becoming almost blasphemy to suggest that we might not want to work, might not enjoy work, might rather sit on the beach and listen to the sea, or even (out come the garlic and crucifixes) prefer to stay in bed with a bottle of Bulgarian red. But New Labour ideology, like all religious ideology, is no diversity. Those who use their own energy to bolster an impossible belief cannot afford to listen to opposition. They will not enter the arena of rational debate. If it makes Blair, Brown and their brethren feel good to work hard all day then not I would not wish to stop them. What I would challenge is their right to impose their choice on the rest of us.

My own view is that most of the work that is carried out in a modern, advertising-led, consumption-based economy is both environmentally and socially destructive. Would we really rather that the uncountable unemployed all found jobs in the factories of transnational corporations making cars? Aside from the corporations' profits, who benefits from their work? Wouldn't they be better off living on a citizens' income and enjoying their lives? As I sit patiently at my postmodernised "work-station", watching my life tick away on the office clock, I think venomously of this crusade for jobs. And I rage against the New Jerusalem Labour has led us into.

5 July 2007

Time for trade

There are many reasons to yearn for a relocalisation of our economies. Beyond the immediate importance of reducing the carbon dioxide emissions associated with the pointless transport of goods across vast distances when those goods could be made domestically, there is also the building of community that emerges when we engage in economic relationships, and the increased awareness of our environment that comes when we use its resources to meet our needs.

Although the barriers to rebuilding local economies seem great, they are in fact mainly mental barriers. We are no more useless than our ancestors: we could make the things we use in our everyday lives. The reasons we exploit Chinese people to do this work for us, leaving them poor and ourselves alienated and unskilled is merely because we go along with the rules of this economic game. We need to step outside the game.

One important first step is to think of what we do when we make useful things as a hobby rather than a job. If we operate according to the 'time is money' mantra of capitalism we would never do anything, since it will always be cheaper to buy stuff from a corporation that employed children poverty wages to make it somewhere in the Far East.

Next we need to decide what our role will be in the new local economy. It is no good bemoaning the loss of local economies and repeating how much you would like to buy more local products. If you are not a producer as well as a consumer the local economy will not happen. Deciding whether you are to become a forestry manager or a cosmetics manufacturer is necessarily a rather intuitive process! Go with your passions, backed up by a little smart thinking about unused local resources. If your product is made from something other people locally view as waste, so much the better.

And finally, you need to exchange with others locally. The Argentinian model of the barter market is useful for this. It is something like a table-top sale but where exchange takes place in local 'money' or coupons you have produced yourself rather than in pounds sterling. This recreates the genuine markets of old, and is a fun and sociable way to buy stuff, as well as meeting our ancesteral longing for flocking and foraging!

So get creative! Get active! And most of all: get trading!

1 July 2007

New Labour's Puritan Agenda

It was the 19th-century Danish philosopher Søren Kierkegaard who said that the more insane and irrational a proposition the more faith is required to believe it, and the more effort required to prop up that belief. He was, as the forerunner of existentialist philosophy in an era dominated by the established church, referring to the Christian doctrine. But we might make a similar critique today of the Labour government's ideology of work which has been redolent of the frenzied rhetoric of the lay preacher, in the case of Tony Blair, and the musty smell of the manse that hangs around Gordon Brown.




John Smith, Blair's predecessor as Labour leader, was also a fervent member of the Church of Scotland. In 1993 he edited a collection of essays entitled Reclaiming The Ground: Christianity And Socialism. The book was produced by the Christian Socialist movement, which numbers many leading Labour ideologues amongst its members, most prominently Tony Blair. In his foreword to Smith's collection Blair wrote:




"Christianity is a very tough religion... It is judgemental. There is right and wrong. There is good and bad. We all know this, of course, but it has become fashionable to be uncomfortable about such language. But when we look at our world today and how much needs to be done, we should not hesitate to make such judgements. And then follow them with determined action. That would be Christian Socialism." Yes, Tony, and that would also be the explanation for the horrendous misjudgement to invade Iraq.




In terms of their denomination, most of the contributors to this short but telling book are Methodists. Paul Boateng begins his essay with the statement that "The Labour Party owes more to Methodism than to Marxism". So it is worth noting that doctrines of Methodism were taken by EP Thompson in his classic study The Making of The English Working Class as the prototype of the disciplined worker. The creation of the punctual and punctilious workforce required by capitalist production systems was far from straightforward, as our ancestors were understandably loath to give up the many "holy days" they enjoyed each year.




This problem was solved by the invention of the ideology of work. It was the Methodists who invented the concept of the "calling": one's work-role in life, as assigned by God in some lottery that was both random and unavailable for inspection. The role of the good Christian was to work hard within whatever calling "God" had assigned, hence the following lines, typical of many Methodist hymns: A servant with this clause, Makes drudgery divine; Who sweeps a room as for thy laws, Makes that and the action fine The "clause", of course, is to perform the act in God's name.




Perhaps the line about making drudgery divine is most telling in terms of Labour's attitude to work policy. It is particularly sickening to learn that the author of this simple hymn, George Herbert, was himself a wealthy aristocrat and MP for Montgomery.




According to the 17th Century theologians, to question one's position in life, particularly one's work-station, was to question God's plan, and hence blasphemous. This was the ideological justification for the creation of disciplined workers, but the weapon that was used to achieve it was fear. Success in one's allotted station was taken as a sign of being favoured by God, and so increased one's likelihood of finding a place in heaven after death. People's energy and time was to be stolen here on earth in return for a promise of eternal life. No wonder Thomas Paine wrote that: "Of all the tyrannies that affect mankind, tyranny in religion is the worst; every other tyranny is limited to the world we live in; but this attempts to stride beyond the grave and seeks to pursue us into eternity."