David Boyle's Blog, page 99

Wangari Maathai, one of the new economics greats

The Kenyan environmentalism Wangari Maathai, who died last week, was not just one of the great pioneers of the new economics - which puts people and planet first - she also started out as a candidate for the Kenyan Liberal Party.

http://www.neweconomics.org/blog/2011/10/06/wangari-maathai-one-of-the-new-economics-greats

Last week, historic for the new economics

I think we will look back on the last week of September 2011 as the moment when the new economics shifted into a different gear - when the idea of an economics that works for people (not the other way around) finally went mainstream:

http://www.neweconomics.org/blog/2011/10/04/september-2011-the-month-when-the-new-economics-went-mainstream

Community politics is not nearly enough

Why the debate at the party conference in Birmingham did not go nearly far enough.  We need to do more than simply re-commit to community politics - we need to completely re-invent it:

http://www.libdemvoice.org/opinion-only-two-cheers-for-community-politics-25422.html

Why we need green quantitative easing

Compare the speed with which Roosevelt rolled out the New Deal in 1933 with the terrifyingly slow nature of decision-making during our own crisis - when what we really need is green quantitative easing.  Or was that what Vince Cable meant in his deft and opaque speech last week?

http://www.neweconomics.org/blog/2011/09/26/roll-on-green-quantitative-easing-and-quickly

The feral elite and The Thing

The Compass campaign to identify a 'feral elite', that parallels the feral underclass, has some remarkable parallels with the campaign nearly two centuries ago by the great radical William Cobbett.  This is how I put it on the new economics blog:

http://www.neweconomics.org/blog/2011/09/23/time-to-resurrect-cobbetts-campaign-against-the-thing

The great policy gap: local economics

There is a bizarre moment in the half-forgotten Lindsay Anderson film Britannia Hospital, where the Queen arrives to open the new hospital wing wheeled in on a trolley, to avoid the demonstrators outside.

I was reminded of this going to hear Nick Clegg's speech on the economy at the LSE, where the security was so tight and labyrinthine that only the demonstrators knew where he was actually speaking.

Nick could be heard in his microphone, as he was being slipped in through the back door, asking: "Has the lecture theatre been booked?"

It was a good speech, well-delivered, and what he said was important – infrastructure, green investment, devolving money-raising powers (though I'm not sure that transport infrastructure inevitably brings growth, since it is likely to undermine local business as much as it opens opportunities for more distant business).

But there was nothing in the speech about those elements that might actually have some chance of reviving the struggling economies of many of our cities – enterprise, small business, local lending.

This reflects the gap in Treasury thinking and it is a serious problem. The establishment has no idea how to revive local economies, and increasing money flows there, and local government looks hopelessly and pathetically to the Treasury to do it for them.

The problem is that, although infrastructure projects and trade negotiations may help in the long term, we all know they will have little or no impact when and where it is needed.

Lib Dems have had so little to say on economics since the death of Keynes in 1947, and now it really matters. Time we got our act together.

Why public services fail

Kenneth Clarke's intervention in the debate about the riots was a breath of fresh air.  If 83 per cent of those arrested had already been through the criminal justice system at least once - then the system is not doing its job properly.

What interests me is how much this same argument could be applied to other public services.  It may be ridiculous to expect that people who have been through the NHS once should not remain ill, or that so many interventions are required with problem families.  Yet that is what Beveridge expected when he set out the terms of the new welfare state in 1942.  He expected it to get cheaper because it was so effective.

In fact, of course, Beveridge's Five Giants have to be slain again and again, every generation at at increasing expense.  The political establishment needs to start asking why this is.  So far they have been too afraid to, but those of us who support public services need to start asking why the are not more effective.  And, yes, I've got some ideas (see my new book published next month!)

In the meantime, we may not embrace the cuts.  But we should not unthinkingly defend all public services exactly as they are, because there may just be more effective (and therefore cheaper) ways of doing the same job.

Are the cuts heading in that direction.  No they're not.  But this admission about the manifest failings of the crimial justice system is an opportunity where we might just begin the debate.

Why politicians don't get the riots

Nick Clegg asked today why an 11-year-old would feel so alienated from their community that they could trash it.  He is asking the right questions, but he is one of the few politicians to do so

But the politicians have returned to Westminster yesterday, and the new political language which does not have 'aspire to own tat' at the heart of it has certainly not arrived yet.  In fact, much of the political positioning on the riots has been deeply depressing.

No, it is not about people who are so poor they are hungry – you can't eat flat-screen TVs.

No, it is not about leniency – Britain relies more on prison for young people than most other countries in Europe (and why are we sending those convicted to prison?  To become real criminals?).

No, it isn't about the cuts – the symbols of state authority were largely ignored compared to the lure of the superstores.

No, it isn't about 'broken Britain' – the response of communities around the country, acting together to protect their high streets and to clean up the mess, is a sign that Britain is not broken. So is the shocked tones with which Le Monde announced that there were no water cannon on mainland Britain.

No, it isn't about immigration. In fact, the Harvard sociologist Robert Sampson suggests that Latino immigration to the USA, with their strong sense of family and community, is one of the reasons crime is falling in the USA.

Why is it that the political Left rejects the idea that disorder is partly about the breakdown of family life? On the other hand, why is it that the political Right can't see that family breakdown has been driven by high house prices, shift work and job insecurity?

Why is it that those who talk about the 'culture of entitlement' don't see that this applies equally well to our banking elite, and their greedy record of extraction, as Compass suggested today?

The truth is that both Left and Right have a great deal to answer for creating this culture of entitlement, from the feral underclass to the feral elite – for abandoning their moral vision for society and replacing it with retailing.

Both have been responsible in the UK for the corrosion of community and family life by the wrong kind of economics.

We have to pretend for a while that foul fair and fair is foul, said John Maynard Keynes. It maybe that the riots mark the last gasp of this pretence – because foul is not useful after all if it leads to moral, spiritual and mental decay.

This is no time for glib solutions to what is a moral crisis as much as a practical one. But part of the solution is going to have to be rebuilding local relationships by reforming our public services.

We need services that are human scale and capable of reaching out into their surrounding communities and rebuilding reciprocal links. That is the co-production agenda.

It is the antidote to the factory schools and hospitals, and the inhuman technocratic institutions into whose tender mercies we now fling those communities which have bred the rioters and which have in turn been torn apart by them.

It isn't just glitzy and inhuman materialism which has created the riot generation, it is inflexible and inhuman services.

Unfortunately, our political elite sees neither of these problems very clearly. It is up to us to articulate them in such a way that they do.

Let them yearn for tat

I live in a relatively peaceful suburb of south London, in the heart of a huge allotment, secure in the knowledge that – if there is rioting – it will not come near here.

So it was a genuine shock, as I walked through the park to the station this morning, to find clothes hangers and plastic bags and the other detritus of looting, and then an abandoned car rammed into the side of the local mobile phone shop.

It made me all the more aware that we don't understand what is happening, still less do we have a coherent narrative of the riots.

The idea that the violent disorder was primarily about anger with the police went out of the window when the mobs began burning and looting people's homes. No doubt somebody will suggest that this is about alienation in the face of the spending cuts – as if the mob would resist burning down libraries or children's centres along with anything else.

No, but the official explanation – "sheer criminality" – while it is certainly true, does not seem quite adequate.

Two things strike me.

One is the faint folk memory of the Gordon Riots in 1780, when racist anti-Catholic mobs went on an orgy of burning and looting across London, culminating in the release of prisoners from Newgate and the destruction of the gaol.

It includes the picture of members of the mob drinking themselves to death in a burning distillery, brought alive so dramatically by Charles Dickens in his novel Barnaby Rudge.

Two centuries on, and we still have not progressed beyond sheer greed and appetite of the mobs at work over the last few nights, the fear of which lies at the heart of the motivation of so many British governments.

Second, the focus on shops gives these events a completely different atmosphere to the inner city riots a generation ago. These are not riots of rage, they are riots of greed. They are also perhaps a symptom of the way that retailing has been allowed to dominate economic policy for the past two decades or more.

But it is worse than that. We have developed a political dialogue which is no less terrified of the mob than it was in the 1780s, but has shifted from Marie Antoninette's famous dictum about cake to the more modern 'let them yearn for tat'.

We have a political system divided between 'let them work for tat' (the right) and 'let them buy tat' (the left). The result is a deep and valueless materialism that allows hundreds of young people across London to go on violent and thieving rampages simply because they can get away with it.

We have a school system dedicated to encouraging people to work for still more expensive tat. We have houses filled with tat. We have conversations dominated by tat and a culture that encourages us to yearn still more strongly for it – and little else.

There is a sense in which those terrifying television pictures of burning pictures are a vision of the spiritual and mental poverty that our materialist economics threatens to spread everywhere. It is the internal contradiction that, in the end, makes it impossible.

This is the issue which will dominate the century ahead, it seems to me. But our political debate is now so impoverished that we barely have the political language to stitch together an alternative.

I hope we try. I for one hereby dedicate myself to finding that new language.

Planning ahead for the next crash

"Future students of history will be shocked and angered by the fact that in 1945 the same monetary system that had driven the world to despair and disaster [in the Great Depression], and had almost destroyed the civilisation it was supposed to stand for, was revived on a much wider scope."

So wrote the Conservative French economist Jacques Rueff in 1964. The collapse of the old system in 1929 led to the Great Depression and the Second World War, so these are not unimportant questions.

There is also more than a whiff of 1931 about the current situation. The markets have realised that they have not, after all, recovered their confidence from the crash two years before. The banks are withdrawing money from circulation to pay for new reserve requirements. The leading economies in the world are involved in major cuts. Eight decades later, here we are again.

The real problem is not so much generating confidence in the system. It is that nobody in their right mind would have much confidence in it right now, as the great edifice totters under the weight of dollar and euro debt.

We are, in short, at a uniquely dangerous moment. And because of the interconnectedness of the system, it is in some ways far more dangerous than 1931. We have fewer human systems to fall back on to provide us with the basic requirements of life. The technocratic systems we rely on will rapidly unravel without the fuel of money.

But it is not hopeless. In the event that the system malfunctions disastrously, as well it might, we need our leaders to accept two fundamental measures.

1. If the system collapses, the central banks of the world must – by agreement that must be negotiated now – create the money they need to pay off the ruinous debt and reset the system. We need to accept, in other words, that the old system is dead rather than waiting hopelessly and disastrously for its revival. Human life, in the end, trumps the integrity of the banking system.

2. That implies the second part. Once the system is reset, then the world's leaders must gather once more in Bretton Woods, as they did in 1945, and this time re-organise the system in such a way that people and planet and their legitimate needs come first. We need a financial system fit for purpose, as they say, and fit for the needs of a different kind of world.