22 February 2011

The King's Speech

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

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

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

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

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

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

Who Bankrupted the Country?

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

21 February 2011

Tim Jackson to Speak at Green Party Conference

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

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

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

Witness Against the Arms Trade

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

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

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

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

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

19 February 2011

Insupporterble Ethics

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

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

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

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

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

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

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

16 February 2011

The Orgacity of Hope

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

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

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

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

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

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

14 February 2011

Big Society or Big Profits?

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

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

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

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

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

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

12 February 2011

Animal Spirits

Something is wrong in our relationship with animals. Lurking beneath the smooth surface of our sophisticated lives there is a deep and unexpressed grief for the mass murder of the other animals to whom this planet belongs, what more 'primitive' people might have thought of as their brothers and sisters. We read that we, the human animal, are responsible for a mass extinction event. My good friend and colleague Rupert Read calls for 'a new convenant with all beings' and such a call is long overdue.

Modern westernised people most regularly encounter animals in two settings: as pets and as food. It seems to me that both these ways of relating are grossly distorted. Pets are deprived of their independence and their spiritual wholeness, forced to behave as a extensions of their human 'owners', prevented from expressing their animal natures. The system of domestication and animal slavery has been taken to even more gross extremes in factory-farm production process, where sentient creatures are tortured by techniques that seem deliberately intended to deny their spiritual existence, as though this excused our desire to consume them.

Human societies that live respectfully and comfortably within their natural environment have quite different relationships with animals. Stories are full of animals expressing their particular qualities or of metamorphosis between human and animal form. In his wonderful book, The Spell of the Sensuous, David Abram describes the social and cultural role these stories play:

‘By invoking a dimension or a time when all entities were in human form, or when humans were in the shape of others animals and plants, these stories affirm human kinship with the multiple forms of the surrounding terrain. They thus indicate the respectful, mutual relations that must be practiced in relation to other animals, plants, and the land itself, in order to ensure one’s own health and to preserve the well-being of the human community.’ (p. 121)

In such communities, people often derived their ancestry from a particular animal, which then became the totem of their clan. We might think that we have developed a long way beyond the culture of totemic animals, yet there are hints of this closer relationship with animals in our own names. The Russian president's name, Medvyedev, for example, is derived from the Slavic word for a bear (medved), as is the familiar English forename and surname Arthur (from the Celtic ardd, a bear), while the familiar name Ralph is derived from a Scandinavian root meaning 'counsel of wolf'.

The journey towards a sounder basis for our relationship with animals will not be an easy one. For me, it will not include the abandonment of meat eating, but killing animals for our consumption will be undertaken in a different cultural framework. Because failing to respect the sacrifice of animals' lives is destructive to our own lives. In his book The Practice of the Wild, Gary Snyder recounts a native American story that is taught to children as they learn to hunt:

'Long ago, a boy went out to hunt deer. He rode on horseback. Pretty soon he saw one [a deer] standing by the side of a canyon. Then he went closer and shot it. He killed it. Then the deer rolled all the way down to the bottom of the canyon. Then the boy went down there. It was a buck, fat and muscular. There he butchered it. The meat was heavy, so he had to carry it up in pieces. He had a hard time reaching the top of the canyon with each piece.

He left the last leg behind. On his way home the boy got dizzy and nearly fell off his horse. Then his nose twitched uncontrollably, like Deer’s nose does. Then pain shot up behind his eyes. Then he became scared. He went back to the canyon to look for the leg but it was gone. He was very sick and nearly died and always had bad luck in hunting.'

9 February 2011

Who is the cleverest of them all?

From the mirror on the wall to the princess and the pea, the stories we are told as children are not inclined to encourage women to be smart. Attractive and sensitive, sure, but the smart girl is always the one in specs who doesn't get the boyfriend. And in case you think this is rather personal, I didn't get my own specs until I was 24 and already had one child.

To make this discussion rather more academic I would like to share some of the findings of an interesting paper from Danny Dorling published in the journal Significance, one of the peer-reviewed outputs from the Royal Statistical Society. It is a statistical analysis of the gender distribution of the allocation of Nobel Prizes and its findings are rather disturbing.

Dorling demonstrates that, since 1901 when the first prizes were awarded, only 35 of them have been given to women. Five were awarded to women the following year, suggesting that somebody had become concerned this might be noticed - one of those was the very first prize to be given to a woman for economics (this is not actually a Nobel Prize at all, just an opportunity for the economics discipline to impersonate the hard sciences).

The author's most sarcastic remarks are reserved for economists, who Dorling claims are not judging the best in the field but, rather, rewarding those who are like them and who fit in. Since the economics profession is dominated by men this has now become a self-fulfilling prophecy:

'It is possible that only men are able to be good economists. . . It is possible that just a chosen few are able to glimpse economic truths and reveal them to the small minority of their fellows who can understand the maths, while we masses are permitted to applaud. It is possible, but it is quite unlikely. Alternatively, it is possible that we have here a group of men awarding each other prizes if they fit in. . . Orthodox economists produce “dictionaries” of their subject where all those listed are men, and almost 90% of the “great economists” listed are men from just eight United States Ivy League universities.'

The Association of Heterodox Economists, discussed in the article as an academic society challenging the groupthink of the neoclassicals have made The Economists of Tomorrow the theme for their conference this year. Papers from women are particularly welcome.

7 February 2011

The Economist as Shaman

Economists have taken a fair old beating in recent years, culminating in the unedifying spectacle of a group of them finding themselves unable to find adequate answers to their sovereign's questioning about how they justified their existence in being asleep on watch during the most serious economic crisis in a century. When the Queen raised this question at the LSE in late 2008 she was reassured by the attendant academics that they all thought they were doing the right thing.

I am sure Her Majesty is not alone in wondering what our economists are up to, and perhaps it is timely to ask a wider question about what economists are for. Given the way that academic economists have made themselves irrelevant with their self-referential number-crunching, and the professional economists have put themselves beyond the pale through their economical approach to ethics, it is understandable that the role of an economist might not be an attractive one to today's generation of young people. So I am opening up a new research project to try to pin down what might be the role of an economist in a sustainable society.

This consideration is not about what economists do in our current society; instead I want to operate more like a social anthropologist, taking a step back and considering what an economist might be for in a general sense, rather than in the sense of a capitalist society in the early 21st century. Social anthropologists have the advantage of developing an in-depth knowledge of human societies vastly different from our own. They can thus develop a sense of what is essential about the way humans live together in community, and what is just superficial.

Clearly my proposition of the economist as shaman is a provocative one, and in some sense a thought experiment. The idea came to me because of my personal experience of the peculiar social and cultural role people were requiring of me, which reminded me of propitiation and mediation. Numerous people have expressed relief when I tell them I am not a vegetarian, or expect me to forgive them for making decision to fly to Australia to visit relatives.

Just as there is 'bad medicine' in causing too much disruption to natural relationships and the balance of creatures with the planet, so the modern shaman might negotiate our way to access resources that causes the least environmental disorder. Her or his role might be to mediate our relationships with the natural world, on which we depend for our survival. As resources become scarce and conflict over food, water and land intensifies, we might need to redefine the role of the people in society whose expertise lies in the area of resource use.

5 February 2011

'Generation Crunch'

This is a desperate time to be young. The pressure to consume, to conform, to achieve impossible educational feats sucks the joy and freedom out of youth. And what was all the effort for, when statistics demonstrate that the employment situation facing our young people is worse than it has been for several generations. Nearly 1 million UK citizens under the age of 25 are out of work, a full 20.3%. This represents the highest figure since record began in 1992.

The graphic shows the trend for economic inactivity amongst 16-24-year-olds between 1993 and 2010 - a relentlessly upward trend that shows a doubling in the rate of inactivity in this age-group from 6% to 12% over the period.

Rather than indulging in gloom over statistics, the Co-operative Group commissioned London-based think-tank Demos to investigate who these young people are and how they perceive the situation they have been handed. The resulting report - Back to the Future - and the short film of the focus group participants offers considerable cheer. They are thoughtful, sincere and well-informed.

The outcome of the consultation is a call for a transfer of 'political capital' towards young people. The events were held in the week before the spending cuts were announced, yet none of the people there had been able to vote since they were 16 and 17. A lowering of the voting age to 16 is a long-overdue reform that was overlooked during the clamour for reform prior to the election.

Perhaps a more practical - and achievable - suggestion would be the transfer of assets, particularly in the form of land, to enable young people to take control of their lives. Proposals such as those for community self-build, if combined with appropriate sustainability and local provisioning targets, could enable the 'generation crunch' to become the ecological citizens who will create our sustainable future.

3 February 2011

John Lewis University

Given the coalition government's support for co-operative and mutual forms of economic organisation, some colleagues recently suggested the adoption of a stakeholder ownership model along the lines of the John Lewis partnership for the higher education sector. Universities, they argue, have weak governance structures, enabling managers to extort excessive salaries:

'The governance roles of university councils or boards are formally similar to those of shareholders. But they are a poor proxy for shareholders - as they make no financial investment, they have no financial vested interest to defend. If shareholders cash out, this can signal falling market confidence, threatening managers' jobs. But if members of governing bodies resign, there is no market to register doubts over organisational performance.'

They propose instead that the assets of universities should be placed into a non-revocable trust who aim is defined as 'the happiness of all its members, through their worthwhile and satisfying employment in a successful business'. As in the John Lewis group model, employees gain the value from their work, although in this model the management of the university remains with the hiearchy.

It is important that a new and consensual model for university governance is found. The removal of most government financial support for courses is a major step towards privatisation. Over the next few years, as income to universities falls, some will be faced with closure and external or management buyouts will become a serious threat. Meanwhile the private and corporate universities (such as the prototype Hamburger Degree launched by McDonalds last year) are reducing still further the requirement for education rather than training from our higher education providers.

So ownership matters; but so does control. Why leave the management of the universities in the hands of those who have managed to best compete in the internal bureaucracy? Why not move beyond the trust model towards a fully-fledged multi-stakeholder co-operative? Who is better placed to decide the strategy for the university, and the content of its curriulum? A manager, or the academics and their students?

Co-operatives-UK recently commissioned some market research to demonstrate just how well co-operatives are doing in terms of public perceptions. Nearly 80% of those questioned knew that co-ops share their profits, 75% considered them fair and 73% knew they were owned by their customers. Around two-thirds thought co-operatives could be trusted and operated for the public good. They were also thought to be honest (63%), open (59%) and democratic. What better people could there be to take charge of our young people's education?