31 January 2007

How Green is Marks and Spencer's Valley?

Evidence that bitter humour is to be found in a study of the global economy was presented again over the past few days, as an eco-plan announced by Marks and Spencer has been rapidly followed by Burberrys decision to close factories in the South Wales Valleys. Having held out for longer than most, Marks and Spencer finally abandoned its domestic sourcing policy in the 1990s. This, not the management expertise of Stuart Rose, explains the company's phoenix-like rise from the ashes. The graph shows the decline in UK sourcing, whose message is clear: abandon ethical sourcing and you too can make a profit in the global economy.

In the era of the brand the corporate myth is a significant contributor to financial success, hence the importance of the green image Marks is buying itself with its eco-plan. Unfortunately the small print shows that the carbon-neutrality so proudly pledged to journalists only extends to M&S's UK operations. Since it is production that uses the most energy, not to mention the need to transport products half-way around the world, moving your factories to China is an easy way to achieve carbon reductions. If you read the plan carefully you see that all the carbon commitments are about distribution in the UK; the commitments relating to the supply chain are all about fair trade.
So what of Burberrys? In spite of pleas from wealthy US consumers who want their coats made by Brits and not by the Chinese, the factories are to close and yet more Welsh workers will lose their livelihoods. They will be encouraged to find jobs in the 'knowledge' economy, by policy-makers who seem to ignore the obvious knowledge that, with Indians doing the thinking and Chinese doing the making, there is going to be nothing left for us to do except one form of gambling or another. A demoralising realisation, although one that does have its up-side in terms of the Kyoto targets.

There is an interesting myth abounding amongst journalists, economists and post-modernists (perhaps they were the people on the escape pod who repopulated the earth?) that we live in a post-industrial age. Nothing could be further from the truth. Industry is alive and well and belching out just as much pollution as ever it did, it's just that it has upped sticks and moved to China.
Another beautiful irony is provided by the fact that Burberry has recently become the iconic brand of the Chav, the post-industrial prole, who is defined as underclass by lack of social and cultural rather than financial capital. If you thought the English class system was dead a rapid glance at the Urban Dictionary online will quickly disabuse you of this. Our children are busy creating a more complex structure of class and style than was ever tolerated in the Thatcherite era.

With the closure of the Burberrys factory another group of workers who used to be able to find some sort of identity in their production will now be forced to resort to brand loyalty instead. At least the Burberry brand with its unattractive overtones will be an impossible one for them to adopt.

28 January 2007

Business as battlefield

I had an unexpected treat on Friday. I was at a seminar in Cardiff on Sustainable Production and Consumption. If you've read any of my posts on bioregional economics you'll guess that I was delighted to find out that such a concept exists at the highest levels of government. Slightly more depressing is the realisation that it was invented at Rio in 1992--a full 15 years ago and yet very little has been done.

There was a stirring presentation by a lady from DEFRA who explained everything that is being done to 'green business'. The consumption end is more of a problem, as she rightly admitted, since buying less stuff is not good for business. This prompted me to question how attempts to move towards greener methods of production can be consistent with an economic system that has as its central tenets growth and free trade. She gamely took this on the chin and later invited me to join the UNEP group exploring whether the economic system itself is the problem. I await a phone call . . .

I have slipped into a generalised whinge: back to the unexpected treat. This was a presentation from Ken Peattie, boss of Cardiff University's sustainable business wing, known as BRASS (most of its staff don't seem to know why). His presentation consisted of a demolition of the central business metaphor of the battlefield. This reminded me of a book I edited years ago that was a history of the post-war development of management consultancy. It made a similar point that demobbed officers formed the majority of the first entrants into this dubious profession.

The organisation of business in the post-war world was left in the hands of people whose previous experience of organisation and management was in the extreme culture of the military. Perhaps it is not surprising, once we realise this, that the spread of the managerialist culture that management consultancy bring with it has led to the launching of a long sequence of syntactically impossible wars against unsuspecting nouns such as terror, drugs and cancer. Equally unsurprising that these wars have been a disaster for all except those who produce and sell the relevant weaponry.

Professor Peattie developed his theme by pointing out the consequences for the environment of the business battle. More and more areas of our planet are coming to resemble the classic images of battlefields. Social impacts ranging from stress-related disease to continuing poverty in the poorer countries of the world can be belittled as 'collateral damage'. Those who fail to thrive in this aggressive, militaristic economy can be dismissed as wimps and cowards.

The increasingly unethical nature of modern business is justified, within the economy-as-war metaphor, under the slogan 'All is fair in love and war'. This becomes a self-fulfilling prophecy, so that business is regarded with contempt by many of our most creative people, with only those with a shortage of morals or imagination being attracted to becoming businessmen.

In the summer I attended a family wedding--always a good setting for undercover social research. The person to my right was a policeman, which did not give me much encouragement and we didn't speak much. To my right I had a spivvy looking chap who introduced himself as an entrepreneur, which he qualified by saying that this meant he was a bastard. Should this defensiveness be seen as a sign of hope? Are entrepreneurs becoming as ashamed as smokers and drivers and people who fly to Amsterdam for the weekend? And he didn't even know I was a green economist.

24 January 2007

Bank money: source of debt and destruction

A bank charter is literally a licence to print money. Since the system of requiring a certain proportion of assets to be kept on reserve has gradually been eroded the only control on banks’ ability to produce money as credit is our willingness to borrow, hence the constant stream of junk mail and TV advertising offers of credit. When the banks lend us the money the debt is listed and the money sought and retrieved but at that point it belongs to the bank. They have used our willingness to borrow as an opportunity to create a debt; when we repay the debt the money they have taken from us belongs to them. No wonder we are seeing record bank profits: they are simply creating their profits out of our debts.

No surprise also that we see spiralling levels of personal, business and public debt. Neoclassical economists see no problem with this. On their planet, the creation of money in this way will be balanced out by a corresponding amount of economic growth. Apart from the obvious fact that money supply is growing far more rapidly than economic activity from a green perspective this growth itself is a problem. So the most important first step towards creating the steady state economy that will not put intolerable pressure on the carrying capacity of the planet is to change the system of money creation that generates the need for the growth.

The discussion so far has been in terms of a national currency, but currencies are also exchanged and used to pay for exchanges of goods and services between national economies. This role is now played primarily by the dollar, which has acquired the status of international reserve currency since the agreement establishing the financial structure to dominate global capitalism after World War II. Under the Bretton Woods Agreement, the USA also extracted the right to have its currency—the dollar—considered the equivalent in terms of economic weight of gold reserves. In the post-war exhaustion, low morale and financial desperation of the other world powers the USA pulled off this extraordinary confidence trick which has enabled their dominance for the past fifty years but left us all with a teetering economic system. The coda to the story is that the USA proved itself incapable of maintaining the value of the dollar and, in the face of the need for massive liquidity resulting from the costs of war in Vietnam, Nixon ‘closed the gold window’ on 15 August 1971. This meant that dollars were now themselves no longer linked to the reserves in Fort Knox but floating free, and foreign Central Banks could no longer exchange their dollars for gold.

Global capitalism relies on one country’s currency to provide credibility for the system as a whole. Initially this role was undertaken by gold itself, as a commodity of real value, but the movement towards fiat money which went hand in hand with the capitalist expansion, meant that currencies rather than gold played this role. The reserve currencies—sterling, the dollar, the yen, and the euro—are all used to underwrite economic activity, but just as in banking there is a central bank so in the currency system there is a central currency and this is the currency of the most powerful player in the global economy—the global hegemon.

It is mainly its own credibility and that of its economy and military structure that guarantees the functioning of the international economy, but it needs its own back-up in the form of gold reserves. During its days of empire the UK played the role of preferred currency. At that time US bankers supported the pound, a fact that alienated those outside the charmed circle who could not understand why US gold was being used to support a foreign competitive economy. Similar questions were raised when Chancellor Gordon Brown sold 415 tonnes of the UK’s 715 tonnes of gold reserves in May 1999, reducing the official reserve percentage held in gold from 16.7 to 7 per cent, and substituting currency, a mixture of dollars, euros, and yen. This is a record low level of gold holdings compared with the 2000-2500 tonnes held between 1958 and 1965, most of which were sold during Britain’s financial crises of the late 1960s and early 1970s.

The may seem like technical stuff, but the central point is simple. The nature of money creation via bank debt is undemocratic and unsustainable. Money should be created by ourselves, as citizens, to facilitate necessary economic exchange. Neither we, nor our governments, should be required to borrow it from banks. The debts this create cripple lives and are also fuelling unsustainable economic growth.

20 January 2007

Is it all worth it for two weeks in the sun?

Something has gone very wrong in the workplace. For many, their work is so distressing that they spend most of the year dreaming of their two weeks in the sun and the retirement to follow. I offer as evidence of this desperately inefficient time-management strategy an advert for Thomson holidays during which we watch a lone, poolside sunbather repeatedly shifting his sun-lounger to catch every possible ray, while we are informed that ‘for every afternoon in the sun you have to work three weeks and two days’. This advert was used to sell summer jet-propelled summer breaks a couple of years back.

There are a number of points about the image conveyed by this advert that are both symbolic and deeply troubling. First, the man is on his own. Are we to assume that he prefers spending his holidays alone, that his perfect escape is to a place where there is only his own company? Second, he is sitting by a swimming pool and yet he never swims. Like so many lives, the really enjoyable activity is missed because the central character, economic man, is distracted by the sun-lounger or his drink or the shadow, or whatever. But most importantly, he is enjoying not being at work because he does not like his work. His holiday represents an escape from his life, which is made unpleasant because of work he undertakes from pressure rather than from choice.

This is the greatest offence that capitalism does to a species who has as one of its central psychological drives the need to carry out useful work in conjunction with others. Again we are persuaded to miss the point, to spend our lives working for holidays and retirement rather than demanding employment that is intrinsically rewarding. I have written about this at great length elsewhere (follow this link to download Arbeit Macht Frei and other Lies About Work), so I am starting this a new strand on the blog which I will come back to from time to time. Please also add your own comments.

A couple of times while applying for funding for research into mining in the South Wales Valleys I was made aware of the ignorance of the nature of working people’s lives by the middle class people who make decisions about them, and the complacency they have when considering the work of others. The shock they feel when their cosy work structures are removed by the new management practices is the only good that I have to say for them. One application for a funding grant was rejected on the basis that ‘Whilst the idea of "participatory employment policy-making" is quite interesting, it is open to the accusation of being somewhat utopian’. In my response I pointed out that even in Medieval Europe, according to a Muttenberg ordinance, ‘every one must be pleased with his work’. According to Kropotkin:

We are laughed at when we say that work must be pleasant, but "every one must be pleased with his work", a medieval Muttenberg ordinance says, "and no one shall, while doing nothing appropriate for himself what others have produced by application and work, because laws must be a shield for application and work."’

My own writing about work is guided by the belief that ‘everyone must be pleased with her/his work’. If that principle is not followed in an economy then the economy is not working properly. We can, and should, do better than an economy where miserable people work in pointless occupations for three weeks and two days just to spend a lonely afternoon by a swimming pool.

Work as it is constituted within capitalism is not only economically inefficient and socially destructive, it is also spiritually offensive. As Schumacher put it, ‘Soul-destroying, meaningless, mechanical, monotonous, moronic work is an insult to human nature which must necessarily and inevitably produce either escapism or aggression, and . . . no amount of "bread and circuses" can compensate for the damage done’, was how Schumacher made this point.

18 January 2007

Everything is never enough

I couldn't have made this up--and I didn't. It is the marketing slogan for Molton Brown, purveyors of perfumed cosmetics to the high and mighty. It is a perfect mission statement for the consumptive economy we live in. To be the change we want to see in the world in economic terms we all need to cultivate a consciousness of sufficiency and think hard about what enough is, perhaps rather than what is enough.

Enough is a vital concept: if we have enough we are not deprived. To learn this we need to begin to share the mindset of subsistence societies, like those reported by Marshall Sahlins in Stone Age Economics, who managed to meet their needs in only a couple of hours a day and spent the rest of their time playing, singing, carrying out rituals, resting, and so on. Ray Mears' current TV series is exploring just this issue, helping us into the sustainability mind-set of our neighbours.

Working more hours and buying more things will never bring us sufficiency, just an endless cycle of more unsatisfied wants, and more work to earn the money to satisfy them. In an article I am very proud to have called 'Sen and the Art of Market-Cycle Maintenance' I have explored the way in which the combination of the concept of ‘relative deprivation’ and the advertising industry create a world where we will always feel the need for more. The maintenance of this feeling of scarcity is necessary to encourage the increasing consumption that economic growth requires. Here is what Marshall Sahlins wisely said about this:

Modern capitalist societies, however richly endowed, dedicate themselves to the proposition of scarcity. Inadequacy of economic means is the first principle of the world’s wealthiest peoples. The market-industrial system institutes scarcity, in a manner completely unparalleled and to a degree nowhere else approximated. Where production and distribution are arranged through the behaviour of prices, and all livelihoods depend on getting and spending, insufficiency of material means becomes the explicit, calculable starting point of all economic activity.

Three assumptions underlie the ethic of scarcity:
  • There is shortage and if I do not immediately take my share, there will not be enough for me. This understanding is partly one of the many unacknowledged consequences of the wartime rationing experienced by the older generation who have bequeathed us their fears, but is reinforced constantly by advertising urging us to buy now before stocks expire.
  • You must take what you can now and then keep it. Giving to somebody else will mean you are left short of something you need. This leads to hoarding of unnecessary items which might be useful to somebody else.
  • You will be left without and there will be dire consequences because nobody will help you. In other words it is an ethic based on fear.
To turn these around we need to create our own ethic of plenty with the following assumptions:
  • There is plenty for all our needs: nature is bountiful when we treat her with respect and care.
  • Sharing is good for the giver as well as the receiver and moves us towards the kind of world we want to live in.
  • You can trust others to look after you: we are better at looking after each other than selfishly competing.
Time to stop. I expect you've had enough.

15 January 2007

Where does money come from?

If you ask people where money comes from they will probably tell you from a bank. Dig deeper and you will find that people believe that the money they take out of the bank has been deposited there by somebody: by the person herself, in which case it is simply a withdrawal, or by somebody else, in which case it is a loan. This is the first big myth of money, because the truth is that all or nearly all (depending on your theorist of choice) the money you take from the bank has been created out of thin air by the bank itself.

When you begin teaching students about the economics of banking you teach a fiction known as ‘fractional reserve banking’ and many who have never taken economics as an academic discipline or worked in a bank have a hazy notion about this system. It is understood, because of Hollywood movies about ‘runs on the bank’,that the bank does not actually hold, or need to hold, as much money as it lends to people. Because it is highly unlikely that everybody will come and ask for all their money, all at the same time, the banks can consider themselves to be acting with probity if they retain only a proportion as ‘reserves’, this proportion being understood to be around 10 per cent. Let us for the time being take this story as a reasonable account of how banks create money; it is the one that is reproduced in most economics textbooks. The first stage is the deposit of some money by a punter, let us say £100. Because banks have learned from historical experience that only one in ten of such punters will want her or his money back at any given time, they feel quite secure in lending £900 on the basis of this deposit, effectively inflating its nominal value, and thus reducing its real value, tenfold.

The second myth about money that is universally believed is that it is, and needs to be, backed by something of real value. Governments create money and this money has credibility because the government has a sufficient store of gold in its vaults to support its value. Like the reserve banking story, according to this fiction governments can create more money than the gold they have, but only up to a certain limit. This story was true for some time, but it was found that the uncontrollable growth of the capitalist economy rapidly outstripped the gold available to support it and maintaining a ‘gold standard’ stifled economic growth.

Eagle-eyed and sharp-minded readers will have noticed that there is an inconsistency between the two stories told so far, in that they disagree about who is responsible for creating the money. They have in common the idea that, while there should be something of real value backing up a currency at least in part, who owns this collateral and who therefore creates the money could be either the bank or the government. This was how things were, both banks and government were entitled to create money: governments created money as fiat issues, whereas banks created it in return for a debt.

So there are several different types of money, distinguishable by the nature of their back-up and by who controls them. Banks can create money on the basis of deposits, as credit. Governments can create money by selling bonds, or just by making a decision to create currency. It may be efficient to leave the job of generating credit for economic activity to banks, so long as they operate within political controls, but it will also be necessary to have money created by government both as credit, to fund public works, and as currency, to facilitate economic activity without the creation of parallel debts. The graph shows how the political attitude to money since the Second World has effectively been the privatization of money creation. It shows the relative proportions of money created by banks and governments over that period. This has had the inevitable consequence of increasing the proportion of money paid to bank shareholders and producing a squeeze on the money available for public investment.

. . . to be continued (when you can bear it!)
If you can bear any more just now you might like to follow this link to a short presentation about money.

11 January 2007

CBI to face truth crimes tribunal?

How should we react to news that the CBI, the lobbying group for British corporate capitalists, has set up a Climate Change Taskforce? Forgive me if I do not put out flags just yet. The priorities for such a body will be to make sure that the majority of the pain of climate change falls on the vulnerable while they are free to continue to hand large wads to shareholders. For me the CBI will always be represented by Digby Jones, the pig in the wig (see picture), who has caused more trouble to my blood pressure than any other radio hack of recent years.

We are asked to forget the fact that it was the CBI who provided spokesmen to oppose the arguments we were making about the impact of carbon-driven industry at a time when there was a chance to resolve the situation with relatively little pain—and paid for the bogus research that supported this case. An international tribunal for truth crimes would seem a more appropriate response than a slap on the back for finally accepting the truth.

So what is wrong with the corporate capitalism the CBI represents? In its present form it is driven by fossil fuels and hence is the major cause of climate change, but this aspect is not inevitable. What is inevitable, however, is growth, and the stealing of resources to turn into profits. It is a legal requirement of the boards of companies to maximize profits so that if they prioritise other imperatives, such as planetary survival, they can be sued by their shareholders. The treadmill of capitalism also requires inequality to persuade us to waste our lives paying for somebody else’s luxury yacht. There are few incentives as powerful as the threat of poverty and humiliation.

There is a workable alternative to this system of injustice. Business can be organised in co-operatives, where producers and consumers negotiate over the value created and how much should be paid for it. Without the class of absentee landlords that capitalism has at its heart—the investors or shareholders—there is plenty to go around. Working in a co-operative means taking more responsibility but it allow self-respect and dignity in a way being an employee never can.

And we will of course have some more traditional businesses in our green economy, operating within a strict system of regulation and with limits on the levels of profits that can be extracted. What about a maximum ratio of the lowest paid to highest paid in any company of, say, five times? Or an international minimum wage? Or a prohibition on moving resources like energy or waste beyond national borders? The market is not and never has been free. The rules it presently operates under were written by the sort of people who are members of the CBI for the benefit of their shareholders. We should be writing rules now for the market of the future—rules which would operate for the benefit of all the people of the world and the planet itself.

Porrit, Monbiot and their ilk have long been arguing for the need to ‘green business’, suggesting that only the capitalists can save us from climate change. Their conservative tendencies make them incapable of challenging the main source of the pressure on the planet, which is the capitalist system itself. Not only does it have an inherent need to create injustice, it is also an inefficient system. Far from resulting in efficiency, cut-throat competition wastes resources and lives, as businesses are founded in the certain knowledge that most of them will lose the competition and going into liquidation.

The CBI state openly that part of their reason for putting on green clothes is that they wish to attract the smart young people who are concerned about climate change to work for their corporations. That means you! They are well aware that for capitalism to adapt and survive they need our brains and our creativity. But we have better things to do, building an economy that is co-operative rather than competitive and where energy is the currency rather than money.

9 January 2007

Reclaiming the land

David Miliband, the cabinet minister responsible for farming and the environment, was in Oxford last week, telling a group of no-doubt sceptical farmers how to do their job. David Cameron was also there with much the same objective. In reality of course the farmers were just window-dressing, the countryside they rape to garner subsidy payments a tasteful backdrop for the display of more green clothing that is really just protective coloration. Because politicians have been very, very wrong on the environment for a long time, and they are only just waking up to the major changes that are needed.

Shall we start with some basic questions and see how either of these two posturing politicians might answer them?

Let's start with, what is land for? It has traditionally been a respository of the inequitable share of the national value owned by the rich. Once, perhaps, Miliband's father might have argued that it should be a commonwealth, a common treasury for all. But such quaint notions have been swept away in an era when fine agricultural land is turned into paddocks for those who acquire their wealth in distant cities and have to buy machines to exercise the horses they don't have time to ride.

And who has a right to own that land? Again there would be agreement that those whose parents and grandparents drifting back into the mists of time were granted the right to exclude others from the common treasury may continue to do so even though they are only using the land to extract subsidies from others less fortunate who must work for the privilege of earning that money.

We might question whether it makes sense to suggest that land can be owned. It is not a mere material item like a car or television that can be acquired and destroyed at will. We might find a better future for agriculture if we, along with many indigenous peoples, began to see the earth as our mother, rather than land as our meal ticket.

Until recently my experience of farmers was indirect, acquired from friends who work in environmental conservation and whose contempt for them was intense. Now, of course, we are paying them to repair the devastation they wreaked on our native wildlife through the tearing up of hedges and burning of stubble--which we also paid for incidentally.

But is this really the farmers' fault? The economic system has itself forced them to become businessmen, a role for which they have proved themselves spectacularly ill-equipped. I sometimes wonder whether it would be better to apply the culture of land management to business rather than the other way around. From a sustainability perspective it is clear that unless you cherish and care for the land it will cease to feed you. We could usefully extend that ethic to our other industries. This is the approach to the land taken by my favourite farmers, who work on our own community farm here in Stroud.

The future of the land should not be a private conversation between politicians and farmers. The land is ours and we should all be involved in planning its future. While they have much to commend them as emergency protection, the policies of greenbelt have resulted in the museumisation of nature and the restriction of the countryside into a playground for the rich. Far from excluding people we would benefit more from a return to the land. We need the artificial parcelling up of our greatest national treasure to be revoked in a grand jubilee and the land redivided between those who are prepared to work with it, to lovingly and respectfully tend it to provide food for us all, which it miraculously continues to do. What a shame there were no green politicians in Oxford to suggest this to the farmers. Apoplexy all round I think.

6 January 2007

Thinking about money

Money is one of the most marginalised issues of our time. Most people never ask themselves or others questions about where money comes from, what it is, or who controls it. This is a shame, since money quite clearly lies plum at the centre of an economic system that is not called capitalism by coincidence. As David Korten said, ‘Capitalism is the use of money to make money for those who have money’.

This question has become even more pressing in the post-globalisation version of capitalism, where money no longer operates as a tool facilitating trade in products, but is used to make money directly by various confidence tricks in a system which is now commonly referred to as ‘the casino economy’. The creation of money by banks was originally intended to facilitate the exchange of goods. However, from the start a range of financial scams have been perpetrated which remove this need to get your hands dirty making things.

It is no coincidence that globalisation as represented by the vast expansion of trade in goods occurred simultaneously with the liberalisation of financial markets. Countries which had once attempted to maintain political control over finance through setting interest rates, controlling the activities of banks, and through credit and exchange controls were persuaded that further capitalist progress required the market to take on these functions. Money can now be used merely to generate more money for those who have it, leaving not production but finance to play the central role in the global economy: ‘Of the total international transactions of a trillion or so dollars each day, 95 per cent are purely financial.’

Money is useful for the obvious reason that it enables you to pay for a luxurious lifestyle, but more importantly to those who control capital, money gives them a claim over future production so that over time they are enabled to accumulate an unfair share of a community’s resources and power.

There are few subjects in modern life about which so many lies are told and so many misunderstandings encouraged, both politically and personally, than about money. It is, in fact, neither the root of all evil nor what makes the world go around. It is a neat but deceitful political tool that enables those with power under a capitalist system to exercise that power to generate an unfair advantage for themselves. This is why I am launching a strand of this blog to present the issues surrounding money in bite-size chunks.

Readers who have not delved into the inner workings of the financial system should be warned: you are in for an exhilarating but bumpy ride. You should not be surprised to find yourself thinking ‘I just can’t believe it’. I have frequently felt that way myself when embarking on a similar journey. The disbelief is similar to that experienced when watching a confidence trickster, but be assured that, just because the show is good and you have believed it for a long while, that does not mean that it is true.

3 January 2007

Growth or Balance? Cowboy or Spaceman?

The major objective of the economy as it works now is to grow, and the more it grows the happier the politicians are. Green economists would have more sympathy with the view of the radical US environmentalist Edward Abbey that ‘Growth for the sake of growth is the ideology of the cancer cell’. In the capitalist ideology it does not matter that economic growth is destructive and does not increase human well-being; it only matters that there is more money changing hands in the global market. There is too much emphasis on standard of living, usually measured in purely material terms, and not enough on quality of life.

For green economists growth is the major problem, not only because it is usually bought at the expense of the planet, but also because it is actually reducing our quality of life. The lifestyles we expect in the 21st century have caused the extinction of species on a massive scale, and by causing climate change are actually threatening our future as a species. Yet they have not even improved our lives. Richard Douthwaite makes this case forcefully in his book, The Growth Illusion. He gives many examples of ways in which economic growth has reduced our quality of life. Technology has reduced skill in work, lowered wage levels, and increased stress. Increased production has generated pollution and inequality, themselves the cause of physical and mental disease. Communities and personal relationships have been undermined by intensified patterns of work.

Other research has shown that economic growth does not increase well-being or happiness, as illustrated in the figure in the case of the USA, which is the most advanced capitalist economy in the world with the highest levels of consumption, and yet the data shows that since the early 1960s rates of happiness have been falling, while rates of psychological illness have been increasing. The figure shows rates of happiness decline in the UK since 1946 as consumption levels rise inexorably (from a lecture by Richard Layard at the LSE).

This has been shown again by a study which measured increases in anxiety levels among American young adults and children between 1952 and 1993. Anxiety levels rose steadily during that time, to such an extent that the average level of a normal child today is the same as that which was found in children who had been sent for psychiatric treatment in the 1950s.

Green economics proposes a move away from a focus on economic growth and towards a ‘steady-state economy’, which is the only type of economy that can be sustainable in the long term. In the steady-state economy, the planetary frontier is respected and the earth is therefore the most scarce resource. This leads us to conclude that we should use it as wisely as possible, maximising its productivity while at the same time minimising our use of it. We should therefore focus more on quality and less on quantity.

In order to achieve the steady state we need to pay attention both to the number of people who are sharing the earth’s resources, and also their level of consumption. We should also be aware of the regenerative capacity of the planet, our only basic resource, so that non-renewable resources should not be removed at a rate faster than renewable substitutes can be developed, and our outputs of waste, including pollution, should be limited to the level where they do not exceed the planet’s carrying capacity.

The issue of resources is crucial. Economics is defined as the study of how resources are or should be distributed. Green economics suggests a whole change of perspective on our attitude to resource use, one that can be portrayed as a shift from the perspective of the cowboy to the perspective of the spaceman. The cowboy views his world as infinite and lives without a frontier in an environment where there are endless resources to meet his needs and a vast empty area to absorb his wastes. The attitude of the spaceman could not be more different. He is aware that his environment is very limited indeed. He only has available the resources that can be fitted into his small capsule, and he is only too familiar with his own wastes.

Green economists suggest that we need to leave behind the attitude of the cowboy and move towards that of the spaceman. Nowhere is this more necessary than in the world of business, where the gunslinger stills rules supreme but where viewing the earth as our only available spaceship would be a better guarantee of our survival as a species:

A businessman would not consider a firm to have solved its problem of production and to have achieved viability if he saw that it was rapidly consuming its capital. How, then, could we overlook this vital fact when it comes to that very big firm, the economy of Spaceship Earth and, in particular, the economies of its rich passengers? (Schumacher, 1973: 12).

2 January 2007

Space is Money

At school we all hated geography. History teachers were always glamorous and exciting; their tweed jackets and cravats suggested hidden knowledge. Geography teachers always seemed to be part-time games teachers and brought their robust approach back into the class room. This link between geography and sports mysteriously persists in my children's schools. Perhaps it is something to do with the physical.

Whatever our school-era prejudices the time has come when we have to tangle with geography, because whether we are thinking about climate change or globalisation issues of place and space are of key importance in building a sustainable future. For an idea of the excellent work being done by radical geographers listen again to the essay from the esteemed Doreen Massey offered as part of the Today programme for new year's day. (Douglas Coker has kindly made a transcript of this that is posted below.)

The presenters of the Today programme were a bunch of listeners who feel that geography does not receive its due weight. You might characterise this complaint as the victory of history over geography in the classroom or the dominance in our culture of time over space. We are obsessed by a fear of growing old, by failing to make our mark before it is too late, by accumulating money and prestige as quickly as possible. Even fame itself is marked out in intervals of 15 minutes.

In another post you will notice my revulsion from the capitalist mantra that time is money. This is the pernicious nonsense that was brought to us by the factory system where profits were maximised by making as many widgets as possible as quickly as possible. It is the thinking that has led to the loss of joy in work, the loss of quality in what we make and is leading to the death of the planet. It also distracts us from the fact that, in reality, space is money since if we owned land to live on and grow our food on we would have no need to sell ourselves, or as it is euphemistically described, our time, in order to survive.
It is a difficult but interesting exercise to try to think yourself out of the era of clock time, which is relatively short-lived in terms of our human history. Barely more than 300 years ago time was governed by the seasons. Most people worked on the land and could not afford artificial light and so the amount of activity differed hugely depending on the time of year. Time itself was related to significant agricultural or astronomical processes. It was experienced and observed rather than being measured. As clock time has torn us away from this natural relationship with the planet so we can start to rebuild that connection by undermining our obsessive grasp of the 'timepiece' and substituting an awareness of the natural cycle of the year. We can do this in community through celebrating the annual festivals of time, such as the winter and summer solstices, and those of the seasons, such as the midwinter festival that has just passed and the spring festivals that will be with us as the light returns.

So, how about that for a new year resolution? Every time you find yourself being driven by our culture's obsession with time try to rethink the problem in terms of space instead? Or perhaps try throwing away your watch? Or not wearing it on Sunday? Why not make 2007 the year you thought more about space and less about time?

Doreen Massey on the importance of geography

Transcript of Doreen Massey (OU) on Radio 4 Today programme 1/1/07

There is an argument about climate change that goes like this. The UK’s contribution to global emissions of greenhouse gas is only a small percentage. There’s not much point in taking responsibility for our own place when India and China are growing as they are. Now I might have found that a comforting argument but it seems it’s a totally inadequate geography. What that small percentage counts is the greenhouse gas emissions from the United Kingdom directly. In that sense it treats the UK as an isolated entity - but it is not. That calculation it seems, misses out the effect of all the things we import from elsewhere, many of them indeed from China. We demand of those goods, that we do not count as our own, the pollution of producing them.

Nor does that small percentage take account of the role of UK companies in production around the world. It’s been estimated for instance that maybe 15 % of global carbon emissions derives from companies listed on the London Stock Exchange. Our economy is said to benefit from these companies. So what responsibilities do we as UK citizens have towards them?I could go on but the point is this. That small percentage is meaningless in an interconnected world.

We cannot pretend that because all that greenhouse gas emission doesn’t happen here … it doesn’t happen because of us. We are in a way implicated. But surely, back come[s] the reply, we are improving. The UK is on course to meet its Kyoto targets. Indeed it is. But why? Well … largely because we have allowed our manufacturing to collapse, because we closed the mines and dashed for gas, because we opted for an economy based on services and, especially, on finance.

It’s not so much that we are behaving better as that we have exported our pollution and reshaped the UK’s role in the global economy. And that reshaping has reshaped too, the geography of the UK itself; as manufacturing regions have declined, as the north-south divide has widened, as our economy revolves more and more around London’s financial sector. Forget that comforting geography of small percentages. These are some of the other geographies that lie behind responsibilities for climate change.