This is the direction we should be thinking in. What comes after? If we do not know, it will be the same old neo-liberalism. An important weekend read.
Robin McAlpine is the director of the Scottish think tank Common Weal.
Cross-posted from Source
THERE’S an awful lot of talk of about how ‘things will never be the same again’, but even though this is still all in the early months I am nevertheless surprised about how little discussion there is internationally on what ‘not the same’ actually looks like.
I can only plead that the post-virus economic crisis in Scotland must not be handled the way the virus medical crisis is being handled – for all our sakes. Finding ways to do as little as possible and leaving the rest to Westminster is a very bad idea.
It’s not really fair, but it’s still true – of all the world’s countries, I don’t believe there are many with more potential than Scotland to come out of this in a better state than it went in. So what principles should underpin the ‘back to better’ catchphrase?
Sufficiency and security
The ideological basis on which the economy has been managed is so long-standing and pervasive now that it’s easy not to notice it at all. The thing that free market economic theorists assume the public wants more than anything is ‘aspiration’.
And let’s not beat about the bush – they don’t mean ‘more time with my family’, and they very much do mean ‘greed and acquisition’. I’m afraid that greedy people see greed wherever they look, and it’s worth noting there are very few free market theorists who have not made a very comfortable living out of promoting their beliefs.
But this does not stack up; there is a wide body of research on what people really want from their economy – this Oxfam report is good on Scotland and what people want. In fact, what they really want is sufficiency and security.
It’s a simple concept – have what you need to live a good life now, feel confidence that you will also have what you need to live a good in the future. If this was at the heart of economic strategy, it would look quite different, and it is the kind of different that creates real resilience post-virus. People will always have hopes for the future, but public policy shouldn’t facilitate greed.
What is true of the individual will increasingly be true of the nation-state as well. The second the US started seizing medical equipment at airports which was bound for other countries and Germany banned the export of medical equipment to Italy, you’re well past the limits of free trade.
A nation needs sufficiency and security. This doesn’t mean self-sufficiency, but it does mean actively ensuring sufficiency of key goods and services. This will mean a combination of reindustrialisation, a different food system and a Foundational Economics approach.
Usefulness
There is so much about Dragon’s Den that I hate (making desperate people dance for the enjoyment of others for a start), but little about it grated more than the shared assumption that the only real goal was money-gouging. A device that saved lives but made no profit had no place there, while some piece of rubbish that gullible consumers might fall for was right at home.
And that’s the British economy; corporate monopoly at the top and people below encouraged to act like chancers and spivs to come up with a scheme for grabbing ‘theirs’. My sister taught entrepreneurial education; after a year of that, all the kids could market a pizza, but none could make a pizza.
I’ve already heard people express a degree of shame when they suddenly realise how utterly useless their job is in the scheme of things. This is good news – the more people who are driven to do something actually useful, the better our economy and society will be.
There are a load of industry sectors which are going to go down the tubes here, and many are just frivolous. From pointless (but very damaging) retail to pointless-but-fashionable business services, you would never in a million years invent them if you were designing an economy. So let them stay dead.
Instead, let’s focus on what is real and useful – growing, making, building, caring, serving, participating, creating (if you don’t think the arts are useful then you’ve been reading too much Daily Mail). If that means less pointless make-busy work then great, let’s all work less.
After this, if we’ve learned anything at all, let’s learn to be useful.
Wealth retention
What free markets are supposed to do really well is allocate resources efficiently. What free markets now actually do really efficiently is not allocate resources but extract wealth. Entire industry sectors have been invented with the sole purpose of taking ever-more wealth out of people’s pockets and transferring it to an ownership class.
We are told over and over that this is a natural process and that ‘the market’ is doing this because ‘it’s a good thing’ and ‘profit creates taxes’. That is theology, not philosophy – and certainly not science.
It is not a natural process, it is a global-level scam being operated by the rich and powerful. They have invented a global system which targets more and more of ‘the wealth of nations’, takes it out of those nations and gives it to corporations and asset-owners. That’s the function of globalisation.
But economies benefit if wealth is reinvested and they suffer when it is extracted. This is basic economics. This time last if someone called for nations to retain and reinvest more of their own wealth (as we did…) they’d have been ignored (as we were). Not to do so now looks flat-out daft.
Definancialisation
You probably think it’s lack of demand in the economy which is causing businesses to collapse. It isn’t – it’s the debt predators.
People’s wages are being paid so businesses should be able to weather the storm – if the banks and the landlords were not behaving as if the world revolves around them and were not demanding their debts be paid as if all was normal.
Then again, if there’s one lesson the financial and property sectors have learned its that yes, the western world does indeed revolve around them. All the way around. Everyone in Britain is suffering apart from banks and landlords who are making the same profits today as usual.
How? How are they pulling off this miracle? Easy – the government is giving them all the money. It’s briefly going into the bank accounts of citizens, but that’s just a detail. Restaurants are forced to stop trading for a period but banks are allowed to keep picking their pockets all the way to the…
The power of finance (property is really just a subset of financial services these days) is not only dangerous, it is utterly disgusting. One day I hope to god that every business destroyed and every employee made unemployed will vote en masse for a final reckoning with these awful institutions.
In the meantime, we should let their asset value collapse and nationalise them – then design them right back out of the economy. Since we can’t do that in Scotland (yet) we should set up a People’s Bank right now and do everything we can to let the rest hang.
Deglobalisation
I have to make clear every time I write ‘deglobalisation’ that globalisation has nothing to do with internationalisation. It is a process of removing democratic power from nations and handing it to corporations. It should be urgently reversed.
After all, it’s proponents are reversing it before our eyes – see ‘snatch and hoard medical supplies’ as above. Be clear – globalisation ends when its in the interests of the powerful for it to end. Which is to say it doesn’t work. You just can’t trust that, when push comes to shove, you don’t need democratic powers over the economy because the free market provides.
A philosophy that applies only when it benefits the powerful and disappears when ordinary people need it, leaving them without medical supplies? Economic sovereignty is the only sane response.
Regeneration
There is a risk that the impact of the virus makes us forget about the impact of the environmental crises. ‘Getting back to before’ is not only impossible but utterly irresponsible. The ‘status quo ante’ brigade are clearly nuts – ‘let’s get back to the place we purportedly accept has to change fundamentally’ must be the most intellectually redundant nonsense I’ve ever heard.
Where we get to next must have a regenerative economy – that economy must put back into nature what it takes out and it must not put into nature things which cannot be processed naturally by nature. It’s that simple. We learn our lesson now or we deserve our extinction.
Circularity and Sharing
Sufficiency and security is about always having adequate access to necessary resources. This becomes much easier if you look after your resources better. Rather than buying them on international markets, using them and then landfilling them only to repeat the process, we need to make sure that all resources are reused and recycled.
There are those who will say ‘oh look, you’re recycling the same beliefs from before’. Yes, I am. Those beliefs were built on the need to respond to a crisis (the environmental crisis), so it kind of makes sense that they are a good response to a crisis.
If we make things better and we use them more efficiently, then the objects in our lives are better and cost less. It sounds like magic but it’s just disposing of the black magic of capitalism which makes things 20 per cent cheaper at the price of making you buy four of them over time.
And we can have more with less if we share. I will write soon on ‘the magic of leasing’, but when we lease things as we want them and give them back when we don’t want them any more then we can have anything we want. Think about it – what would you give to take all the stuff you’ve bought over the last five years you don’t want any more and convert it back to money? Ta dah!
There’s another crucial resilient impact – in a circular economy you don’t need to join the looming war to grab a share of the dwindling supply of the phosphates without which modern farming collapses – because you need fewer (agroecology) and you can easily recycle them anyway (let’s just say we eventually flush all those phosphates down the toilet). That’s the power of resilience.
Designing
The term ‘planned’ is used as a pejorative in free market thinking and is yet another semi-religious belief in infallible markets as the only legitimate influence on the economy. This is no longer a credible belief given the scale of what is ahead.
Rather we must think of economic ‘design’ being key; it is not about control or certainty but is about explicitly creating the conditions for success. Metaphorically, you can’t make it rain, but you can build a reservoir.
Here’s an example: if we wish to build up the productive domestic economy then the uncertainty of free markets must be addressed by designing-in predictability so that public procurement can give businesses long-term confidence in demand where they are taking a risk on expansion or diversification.
Equalising
Achieving greater economic equality isn’t a nice add-on to resilient economics, but is is crucial. There is no version of a resilient economy in which resources are so unevenly distributed that a large proportion of people can never achieve economic security and where crucial public services are undermined by the sheer tax inefficiency of wealth inequality.
Think about a nursery class and lego. If you want to get things built, would it be wise to let the biggest kid bully the lego blocks out of the hand of the other kids? Or would it work better if the blocks were distributed more equally among the class? Which gets more built – equality or inequality?
Diversity and Decentralisation
I won’t dwell on this since I’ve made the case strongly in previous columns. Monoliths fall over, dominant centres suck wellbeing from subordinate peripheries, more people make better decisions than fewer people. Get Scotland decentralised and diversified and do it yesterday.
Better
This is the final principle and is very important. People are scared now. I knew many people were scared by the climate crisis before. But fear makes people do bad things and hope makes them do better things.
The reason I set out these principles is to help people see that what comes next has every chance of being better – much, much better – than what it replaces. Disaster-mongers will tell you to cling to what you have. I’m begging you to cling to what you will have, what is ahead – if we embrace it.
The future is not destined to be worse. It is certain to be different, but if we embrace the difference and shape it we can be much happier. I mean, wouldn’t you be willing to trade a proportion of the disposable nonsense you used to buy for never worrying about money again?
Wouldn’t you like a better house? Better-tasing food? Much better access to high-quality products? More time to spend with the people you love? Less pressure to measure yourself against what others possess?
Whatever you really want from your life – no, not the things you’ve been persuaded to put on a future shopping list, but the fundamental things that make you happy – believe those things can be yours.
The barrier to what you want is the old system. The virus is wiping it away. Have real, solid hope that we can build something better. All we need to do is follow these principles.
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