31 August 2012

From the Men of Property the Order Came

This week another part of the protection of the vulnerable is stripped away, as the government changes a clause in existing legislation to make squatting a criminal rather than a civil offence. The effect of this is to enable the wealthy to demand that the police undertake to remove squatters from their second or third homes at public expense, rather than them having to undertake civil action at their own risk. Squash, the squatters' support campaign have estimated the cost of squatting at £790m, money we will pay to defend the property interests of the wealthy.

In spite of its urban and somewhat risqué image, squatting is a noble and ancient tradition. Originally it meant squatting on land, laying claim to the right to provide for your own subsistence, to which the building of accommodation was secondary. Much as the members of Brazil's MST do today, our ancestors challenged the feudal land system by occupying farmland and providing for their needs. It was the shift of the economy towards a labour market and industrial production that changed the focus of squatting towards merely the need for a home.

The BBC quotes Housing Minister Grant Shapps as saying 'No longer will there be so-called 'squatters rights'. Instead, from next week, we're tipping the scales of justice back in favour of the homeowner and making the law crystal clear: entering a property with the intention of squatting will be a criminal offence.' This is a typical example of the divide-and-conquer tactics of the Tories, who ignore the fact that many of those who are homeless are in work, but are paid too poorly to afford the profiteering level of rents in many of our most expensive cities, and especially in London.

The answer to the homelessness crisis is for government to intervene in what should never have been a housing market. As a society we consider that education and health are too important for the vagaries of the market to control their allocation and their price - why not with housing too? And Tory ideologues should read their history and recognise the tradition of squatting as much more akin to the empowered economic response at the individual level that they so vehemently espouse than they might feel comfortable with.

24 August 2012

University Rent-Seeking: This Time It's Personal

As a university professor who is also the mother of an 18-year-old daughter, I am experiencing the anxiety of the university admissions season more than most this year. My daughter has her place, and yet I feel uneasy rather than jubilant. My visit to the institution of her choice convinced me that it is one of those rapacious London-based universities that profits from the rent paid by its own students while competing to out-rank Harvard in a meaningless international comparison. I try to explain the meaning to her life of a debt that may well reach £100,000 over her lifetime.

With my political hat on I have written a report for Green House thinktank that argues strongly for free third-level education for those young people who would benefit from it. My research into this issue blew away many of the myths that were propagated during the debate about raising students fees in the UK. I discovered that the UK’s spending on higher education in 2008 put it in 26th position out of the 33 members of the OECD. The figure illustrates these comparisons and offers some interesting evidence. Perhaps most striking is the high proportion of GDP that the US and Canada spend on tertiary education. While we are following the US models in terms of fee rates, we are not following their level of investment in education, which is around 2.5 times as much. It is important to stress that these data relate to a period before the 40% spending cuts introduced in 2011/12.

Now a paper published in the autumn edition of the Journal of Co-operative Studies explains where all our public money is going, and why we cannot afford to fund our young people through education. It exposes a process of self-endowment by senior academics, who have used the cover of the shift from collegiality to managerialism to massively increase their salaries. The absence of checks on managerial autonomy has enabled the moral hazard of self-serving rent-seeking:

'The levels of vice chancellors’ pay provide material evidence of this hazard. In 1994-5 the
median VC pay was £92,000 and in 2009-10 their average pay was £254,000. Over the same period, the top of the senior lecturers’ pay scale rose from £33,000 to £55,500. In 1994-5 VCs earned 2.8 times the pay of a senior lecturer at the top of the scale, whilst in 2009-10 the comparable multiple was 4.6. In 1995 the Prime Minister’s salary was £82,000 and 29 out of 103 vice chancellors earned more than £100,000. In 2010 the Prime 20 Minister’s salary was £142,000, but every single VC was paid more than him, as were a further 800 other university employees.'

The authors find deep-seated problems with the governance of universities that they argue can only be addressed by a change in the ownership structure: the John Lewis University. The assets of every university should be placed in a nonrevocable trust that would hold the formal legal title to the organisation’s assets. The university's academics and students would become the Trust's beneficiaries. The trust deed would 'affirm the university’s status as a community social asset and an element of the knowledge commons'.

The authors conclude that 'Current turbulence in higher education organisations in the UL opens up potential spaces in which such alternatives might flourish. What is needed is
imagination and the determination to make change happen.'

As ever, if you would like to read the paper but cannot get beyond the corporate firewall that encloses academic knowledge, please contact me.

22 August 2012

Obols or No Balls

While policy-makers struggle to increase the flow of money in stagnant national economies they fail to see that it is not the quantity of the money that is the problem but its quality. The imperialist currencies of dollar and euro were designed to serve the interests of elites, so we should not be surprised that they do nothing to support the livelihoods of citizens of countries the world over. In The Ecology of Money, Richard Douthwaite suggested a sophisticated multi-layered currency world, where different types of money played different roles. Although ignored at the time, this may be just the sort of proposal we need now to resolve the crisis in the global economy, and particularly the crisis in the Eurozone.

The structural flaw with the Euro was always clear to economists: a single currency means a single interest rate, a single price for money across a number of diverse econonomies. The overheating, subsequent bust and unpayable debts in Greeece, Spain and Ireland were bound to result from such a system from the start. For this reason the UK Greens campaigned hard against the Euro proposal as soon as its design and inevitable consequences became clear. Our policy was to support the Euro as a common currency rather than a single currency, and a shift to such a policy remains a viable option for the Eurocrats now, enabling them to save face by claiming that the Euro can survive with its membership intact, while allowing the countries of the periphery to escape ongoing suffocation.

So Greeks would still be able to spend Euros, and the tourism industry, for example, might continue to accept them. But the Greek government would initiate a new currency for the purposes of running its national economy (I would suggest that they not call it the Drachma). Governments need a currency in which they accept taxes, and they need to have control over this currency, Greece could issue Obols to pay the salaries of public-sector workers, and accept the same for payment of taxes. This would immediately liberate the country from the death spiral it is currently enduring. Traders would prefer to have Euros, but a currency which you can use to pay your taxes always has an intrinsic value and would be accepted faute de mieux.

Meanwhile Greek citizens are already finding creative solutions to the desperate shortage of currency: they are creating their own.  The best known example is the TEM (an acronym from the initials of the Greek phrase 'local alternative unit') which circulates widely in the Greek town of Volos.  The currency is a typical example of a community or complementary currency, circulating within a defined local economy. This system, like many LETS schemes in the UK today is run entirely electronically. It has provided a lifeline to many Greeks for whom the Euro is now unattainable. Its success provides evidence of the need to end the national and now international monopoloy over money and shift to a pragmatic policy of creating a number of moneys appropriate to the role that money should play in the economy: facilitation rather than strangulation.

14 August 2012

It's the Green Economy, Stupid!

It is widely agreed that the Rio +20 conference was a disastrous failure. What it proved most convincingly is that the people of the world cannot have 'the future we want' without taking the power back from the corporations who currently dominate the global economy. The ideological battle over what the green economy means must be fought and won: a sustainable economy is different in kind from a global capitalist economy. Although many who went to Rio were fighting hard for this agenda, the conference itself was unresponsive to their message.

My own small contribution to the Rio process was to call on some of the best co-operative studies researchers to contribute towards a special issue of the Journal of Co-operative Studies, drawing attention to why proposals for a green economy need to focus on how economic resources are owned and controlled. In my editorial I argue that:

'Much of the discussion around what the green economy means has focused on the need to achieve efficiency in the use of materials and energy. At the more conservative end this can mean simply a form of 'green capitalism', where the economy operates much as it does now, but with a different range of products on sale and powered by a different range of electricity-generating technologies. For others, however, this is too limited a vision, and the growth dynamic and profit drive that characterise a capitalist economy can never be compatible with a sustainable future. That is where the co-operative movement comes in, because two of its central concerns—with accumulation and allocation—are also central to the debate about the restructuring necessary to make our global economy green.'

The special issue also includes my thoughts on links between co-operation and the green economy from my keynote address to last year's ICA research conference in Mikkeli, Finland. Professor Mary Mellor outlines what she considers to be 'co-operative principles for a green economy'. Two more detailed papers describe what the co-operative business model has to offer networks of organic food distribution (in the USA) and local agricultural regeneration (in Spain). The paper also includes two papers from co-operative activists describing the co-operative contribution to renewable energy development and the encouragement of pro-environment behaviour.

The main reason for the failure of the Rio conference was that it was not organised co-operatively and not controlled by the people whose futures were at stake. For many of us, this was clear from the outset. The more fruitful way to achieve change in the short term, whether in terms of economic empowerment or sustainability, is in your own community. And in the longer term, we need to be focused on the ownership and control of resources--issues that were notably absent from discussions at the top table in Rio.

The green economy is not something we are planning or dreaming about: at the local level the real green economy already exists. We just need to expand it so that it takes over from the corporate, unsustainable economy that is so powerful at projecting itself but so socially destructive. All the practical examples you need are covered in a wonderful new book The Resilience Imperative, from Pat Conaty, who also contributed to the JCS special issue, and Michael. JAK banking, community land trusts, shared home ownership, and the Danish windpower revolution: all are covered to provide detailed guidance and inspiration.

If you would like copies of any of the papers in the JCS special issue please email me. 

11 August 2012

The Hyperreality of London 2012

As the Olympic Games draw to a close it seems important to mark the way in which they have become an extraordinary national festival. Living in Stroud I have plenty of friends who have seen and heard nothing, since the excitement has been entirely mediated and virtual: a culmination of a life where what happens on your television feels more real than what happens outside your front door. London 2012 underlines the insightfulness of Baudrillard's concepts of hyperreality and the simulacrum. The mediated appears more real than lived experience; the articifial has more power than the authentic.

So how green were these games? To what extent has the claim to be the greenest games ever been fulfilled? The job of monitoring this claim was passed to the Commission for a Sustainable London 2012, led by 12 commissioners. The focus of their activities is clarified by the range of 'experts' they chose to involve: in the areas of biodversity, waste, sport, and standards and ethics. Nobody was considering the amount of energy used in flying the millions of spectators around the world. The work of the Commission is typical of the way action on sustainability often ignores the wood to focus on a few whimsical trees. It is of some interest that the cauldron uses less gas than the cauldron in Beijing, and that the lighting system for the stadium was most out of recycled gas pipes, but these design features are farcically insignificant compared to the massive CO2 emissions resulting from the travel of the spectators.

This takes me to my most fundamental criticism of the games: they were planned to be and inevitably were a games for the elite. The people who live, work and run businesses in London were frightened into leaving their own city, turning it over for three weeks to be the playground of the world's rich and famous. This is what the Olympic games have become and it is symbolic of the displacement of citizens from all positions of power within the global economy, which is now similarly dominated by corporations and elites.

I may only be seeking to recoup my share of the investment in the games (which is now estimated at some £11bn, so slightly under £200 for every UK citizen), but I like to think that, in spite of all the focus on individual achievement it is we, the British people, who have actually won the games. Both Olympic bureaucrats and athletes have commented most on the warmth, enthusiasm and sheer niceness of us Brits. If the games have proved to us that we are a nation of kind and helpful people will it be worth my investment? I think only if we use that knowledge to spend more time getting to know each other and co-operating to achieve something real in our communities, and less sitting in our own homes, absorbing the messages of media elites about business elites celebrating the performance of sporting elites.

8 August 2012

Happy and Glorious?

The BBC's home editor Mark Easton has a fascinating post on his blog exploring the regional relationship between two sets of government data: the recent survey on levels of well-being around the country are compared with regional rates of prescribing of anti-depressants. He finds that there are significant regional variations in the rate of prescription of anti-depressants, as well as interesting relatonships with the self-stated happiness of local populations.

Easton writes that 'Blackpool is the place with the highest use of antidepressants in England - an astonishing 1,430 prescriptions signed for every thousand patients in the primary care trust. The PCT issued 221,000 items with 155,000 people on its books.Blackpool also emerged as England's unhappiest place in last week's well-being survey data, with 36% of adult residents giving a score of 6/10 or less when asked to rate how happy they were the day before.'

The top six places in the league of anti-depressant use are all in the North-East where some of the country's most unhappy people are also to be found. By contrast, as the map shows, rates of prescribing are much lower in London, in areas that also suffer high levels of deprivation. Such correlations are always difficult to interpret, but suggest that the message about the importance of talking therapies is influential, perhaps appropriate, where the chattering classes predominate.

As well as these relationships in the data, the absolute levels of prescriptions for these mind-altering drugs are truly disturbing. More than £270m was spent on anti-depressants last year, up 23% from the previous year. This is a trend that has continued for the past tend years, with numbers of prescriptions growing from 9 million in 2001 to 24.3 million in 2001 and 46.7 million last year. The information we do not have is about how many individuals are involved, since these are numbers of prescriptions, but given the the number of prescriptions written annually for anti-depressants is now about the same as the number of adults in the country, we can assume that a massive proportion of our fellow citizens are not in their right minds.

Once there was great concern amongst science fiction writers about the threat of mass medication: governments adding to water supplies large quantities of chemicals that made populations docile and passive. This would undermine citizens' ability to demonstrate political opposition, and also make them accept policies of injustice or oppression. To what extent can we suggest that the mass prescription of these drugs is already a form of such mass medication? Are levels of disempowerment, frustration and despair leading to a more voluntary version of the same threat? And why is there so little outcry from citizens in response to such blatant evidence of social failure?

1 August 2012

The Quest for Academic Credibility

This may, I know, be a futile quest. But I am impressed by the way the post-war pro-market ideologues came to control the world through controlling the economic ideas that dominated it. Much of this strategy was focused on systems of power, and particularly the media, but they also dominated academic economics, and that struggle to reverse that sorry tale of misinformation and deception of so many young people is an important one.

For this reason I would like to give a small plug to an article of mine that came out yesterday in the Cambridge Journal of Economics. This is the best of the economics journals, since it reflects the way economists at that university still have some freedom to question the neoclassical paradigm. Building on my book, Green Economics, I seek in the article to carve out a specific space within academia for an approach to economics that arises from reverence to nature and a fundamental commitement to social justice.

In the article I identify four characteristics of green economics:

'Its pluralism is inherent, and is evidenced by the repeated call for a wider range of perspectives on economic problems than those that currently dominate academic and policy discussions. This leads naturally to a commitment to global equity and to giving equal importance to the needs of the majority world to decisions about the allocation of global resources. Equity is also a concern at the domestic level, a concern that arises necessarily from the closing of the planetary frontier. Schumacher’s catchphrase ‘small is beautiful’ is influential, but has been developed into a call for strengthened local economies and an opposition to the globalisation and displacement that have typified economic ‘progress’ during the past century. And, finally, the call for a steady-state economy and the replacement of the growth dynamic that is central to the capitalist economy is a fundamental tenet of green economics.'

As part of a strategy of changing what economists do, and particularly how economics is taught to future citizens, I hope the paper will make a contribution.

PS In response to a comment about the fact that this article is copyright controlled, I forgot to include in the article the important information that academics often make a pre-publication version of their articles available via the Social Science Research Network. If you wish to read this article please email me direct (molly@gaianeconomics.org) and I will send you an electronic copy.