Category Archives for "Local Economy"

1 Our Town Centres Tomorrow

The core principle to Julian Dobson’s approach in “How to Save Our Town Centres” is perhaps summarised in this single sentence:

“The thriving high streets and town centres of the 21^st century will be those that rediscover how to maximise returns to their communities.” (page 127)

The concept of community is notoriously slippery and perhaps mostly we must fall back on “I know community when I see it”. We can say community is present where there is growth of sustained relationships between people committed to a particular place. Whilst there is a degree of trust required in any financial transaction, in large commercial chains it is primarily through written contracts and familiar branding; not so much through personal contact.

City Centres are Complex

So far, so simple. Dobson shows how complex our cities are and the many factors we need to consider. So, in the second part of the book, he has written chapters about:

Economic Development Equals Community Development

Dobson questions the approach to regeneration that brings together the great and the good. He writes:

“They fail to appreciate that economic development must encompass community development … this means considering not only what kind of places we want to create, but how they are to be run and in whose interests: who will control or influence what can happen in 5, 10, 20 or 50 years’ time and how to ensure our towns are no longer at the mercy of decisions taken hundreds or thousands of miles away – or even behind closed doors in the local town hall or chamber of commerce.” (page 262)

In my free e-book (see below) “Community Development is Dead! Long Live Community Development!”,  I argue practitioners have ignored the local economy. The corporations have taken advantage of the neglect many local activists have practiced towards their local economy. They have their power because activists have refused to dirty their hands in trade. As a result community activity has become grant dependent and so unable to build sustainable programmes in their communities.

An Objection

And this brings me to an objection to Dobson’s argument. We cannot get there by concentrating solely on town centres. Town centres are one part of larger towns and cities with many suburban centres. And they too need regeneration. The big supermarkets recognise local shopping centres are important and wealthier centres usually house at least one major chain in direct competition with local businesses.

Local businesses not only base their activities outside their town centre because they can afford the premises but also because they value where they are. They build networks of suppliers and customers where they are.

We need a model that provides a framework for trade across the city, allowing customers to find local businesses not only in the centre but across the city. I’ve written about Hunters Bar in Sheffield, a distinct centre that draws people for recreational purposes, perhaps on an afternoon off work. In the same post, Spital Hill is another example of a local centre, where there is in embryo an Islamic shopping centre. There are many other similar places in the city. We need to find ways of supporting all this economic activity and the city centre can support these satellite centres.

This apart, “How to Save Our City Centres” is an essential contribution to the debate about the future of our cities, local economies and communities.

2 Our Town Centres Today

So, what are the problems facing town centres today? Last Friday I introduced Julian Dobson’s book, “How to Save Our Town Centres”. Today I shall summarise what he understands their problems to be.

What Are Town Centres?

We are making a massive mistake if we think town centres are solely about retail; fundamentally they are places where relationships develop between citizens. Retail depends on trust and so the nature of cities and their spaces, where relationships can grow, is important. At least, that is true for local retail businesses. The large corporations depend on their brand to develop trust and so have become independent of civic institutions.

Dobson writes:

“Not only the shops are going: many of the institutions that once anchored town centres, from churches to libraries to adult education centres, have disappeared or diminished. The activities that brought people into town in the 19^th and early 20^th centuries are often no longer there, and sometimes no longer anywhere.” (page 10)

Later, he writes:

“Go back to the ancient Greek idea of the agora and you will find a far richer mix than exists in even the most successful contemporary street markets. The agora was a civic space, not just a marketplace. In the agora of Athens there was the courtroom, places of religious worship, the gymnasium, the mint that produced the city’s coinage, and the bouleuterion, the council building where people assembled to legislate and to discuss public affairs. The agora was used for theatre and performance, meeting and holding court: it was far more than a shopping precinct.” (page 46)

The Marketplace

This vision will be familiar to readers of this blog although I’ve usually used the word marketplace to describe similar diversity. People generate all these activities and so we say they are people-centred. Of course, some institutions, for example civic authorities, manage activities such as courts or council meetings. But all these activities are essentially public activities. They take place behind closed doors only in totalitarian states.

But ideally local businesses and community organisations generate most activity. Each activity supports future activities because town centres have histories known by the people and are an inspiration to them. They take civic pride in their unique place.

Three Trends Undermine Town Centres

According to Dobson there are broadly three trends that have undermined our town centres in recent decades:

“The shopping centre, the supermarket and the internet giant: each in its way is stripping trade out-of-town centres and away from local businesses.” (page 78)

And when the trade goes it becomes more difficult to sustain the other activities.

The one thing that unites these three threats to town centres is branding. Meadowhall, Tesco and Amazon (for example) are all trusted brands. This means they are well-known, provide a massive range of goods and offer credible guarantees of quality.

What Can Be Done?

Whilst many local retail businesses can compete on quality they can rarely compete on their range of goods (addressed by having many businesses and not so much by increasing the range of goods held by a trader) or becoming well-known because they have limited marketing budgets and are often based in premises they can afford outside the town centre.

Somehow we have an economic system that makes no effort to protect the interests of local businesses and communities.  Local authorities plan to attract corporate businesses into their areas in the hope it will regenerate their towns.  Instead they take more finance out of the area, destroy local supply networks and then when they find a better offer, are likely to leave.  Where are the plans to grow, support and protect local businesses and communities?

No summary can do justice to Dobson’s book and especially the wealth of examples he offers based on good and bad practice.

Next week I shall explore some of the solutions Dobson offers and reveal the one point on which I do not agree with him.

2 How to Save Our Town Centres

They used to say the story of Sheffield was a tale of two cities. The old city centre was bombed during the Second World War. I can remember travelling by bus as a child into the centre and passing bomb sites. I didn’t know they were bomb sites at the time. A comedian once said the residents of Sheffield quite liked the bombed look and so modelled their city on it!

One day during the 1960s, my parents took me to the Central Library to see a model of the plans for the city centre. This was the famous “Hole in the Road”. I remember being particularly impressed by a ramp built into Cockaynes (which I thought had been there forever). It was to connect to subterranean passageways from the hole in the road (follow the link for archive photoes, scroll down for Castle Square with the hole and as it is now).

Using subways, bridges and pedestrianised streets you could walk from Moorfoot to the Castle Market without crossing a road. Sheffield was the cleanest industrial city in Europe and the greatest shopping centre outside London.

I moved away in the seventies and upon my return in 1989, the hole in the road was a shadow of its former grandeur. Sheffielders were once again enjoying empty spaces. They wrecked the centre by building Meadowhall, the biggest out-of-town shopping centre in the region, a couple of miles away.

A Tale of Three Cities!

Today it is a tale of three cities. The hole is long gone, the Supertram introduced in the early nineties and many sixties monuments replaced by millennium projects. The millennium projects have actually been quite successful and are more popular than many of the buildings they replaced.

However, as a retail centre Sheffield has not done so well. There have been several attempts to build a new shopping centre at Barkers Pool and a new proposal is under consideration at present. The Castle Market has moved to Moorfoot (so there’s no need to do the famous walk) and they’re building a new retail site nearby. But the Moor itself is a shadow of its former glory with most of the retail chains closing or moving to Meadowhall. Fargate, arguably, the main retail street, is a mess. It looks like someone emptied a back catalogue of street furniture onto one street and then paved it with Italianate cobbles that make walking along it an unpleasant experience.

How to Save Our Town Centres

I could write more about Sheffield’s centre (and possibly should) and it will be familiar to Julian Dobson who lives in the same city and is the author of “ How to Save Our Town Centres: A radical agenda for the future of high streets”.

The only thing I would take issue with is the book’s title that hardly does justice to its content. The implications of his argument would stretch far beyond town centres and are relevant to every neighbourhood.

I’ve covered ideas in this book previously in this blog. (He uses the term Agora and writes about the retail co-operative movement’s significance.) The writing is brilliant, a pleasure to read and I’m really jealous he has managed so much I’ve attempted to write about!

The book is not only a pleasure to read but also practical. There are many examples of projects all over the United Kingdom and indeed the world. Experiments are happening all over despite the lack of political support for change. Dobson includes practical suggestions for activists and legislators, should we ever manage to elect politicians who truly share our interests in a thriving national localised economy.

Of all the books I’ve reviewed so far (and I’ve reviewed some very good books) this is the one I most wholeheartedly recommend you read. I’ll write more about it over the next few Fridays.

2 The Heritage of Asset Based Community Development

I’m not familiar with Asset Based Community Development (ABCD). However, Cormac Russell’s book “Looking Back to Look Forward” has inspired me to find out more.

The book is primarily Cormac Russell “in conversation with John McKnight about the heritage of Asset Based Community Development and its place in the world today”. John McKnight is one of the founders of ABCD. The core of the book explores nine key thinkers, who were or are McKnight’s contemporaries and inspirations.

The book has a helpful bibliography about ABCD. ABCD will re-issue it in an expanded form in 2016, to include interviews with other founders of the movement.

Alinski and Illich

Of the nine key thinkers I was previously familiar with two, Saul Alinski and Ivan Illich. The other seven thinkers and activists cover a vast area of expertise in areas such as a health, education and the arts.

Ivan Illich observed that as institutions develop they move from their foundation principles through various phases. They culminate in self-defeat, meaning they reinforce the problems they were set up to solve.

They clearly illustrate this principle in the economy. Local businesses exist to enrich communities. Good business people leave a trail of new or improved businesses because their model is generosity. Obviously things don’t always pan out that way and many business owners do not excel as employers, for example.  We remember the pioneers of the industrial revolution who left a great civic legacy. They were also exploiters of their employees.

At some point in the growth of a business it slips its moorings and ceases to benefit the wider community, concentrating wealth in fewer hands and extracting it from circulation in the economy. So, big businesses no longer enrich and begin to impoverish local economies.

Communities from the Inside Out

The vision behind ABCD is residents can grow their communities from the inside out, using the assets naturally available to them. They throw “their lives into becoming the counterbalance to a non-sustaining consumer culture”. Their negative view of the marketplace perhaps marrs his positive approach in some part. I would like to see a more positive vision of the marketplace when it is a place for sharing of local assets.

There has to be some focal point where communities share their assets and why not call it the marketplace? It would certainly be a more historically accurate use of the word than the current neo-liberal version.

The assets available to communities appear to fall into six categories:

Whilst I am sure the ABCD approach is on the right lines, I am less sure it has sufficient leverage to effect the changes we so desperately need. I hope to see in the longer book a positive approach to reclaiming marketplaces in local neighbourhoods and an analysis of the political leverage required to effect real change.

0 Location is Everything

One of the insights that have kept me going as a community development worker is “it’s where your feet are!” Many claim it is our heart or mind that forms our role in the world. There is a degree of truth in this because it is certainly true that our values are important.  But what forms our values? Perhaps our geographical location, where our feet are? Certainly the relationship between place and values is complex.  It cannot be ignored, location is everything.

There is interplay between our online and offline practice in a parallel complex fashion. David R Bell in his book “Location is (Still) Everything: the Surprising Influence of the Real World on How We Search, Shop, and Sell in the Virtual One“ makes a valiant start at unpicking this relationship.

His interest is primarily in lessons for online marketers and so his emphasis is on the behaviour of customers in aggregate and not so much the behaviour of communities and economies. His perspective is that of a business owner who is seeking a market on a nationwide scale and then on the impact these decisions might have on a community, where many such decisions affect the lives of residents, without their knowledge or consent.

The book is full of helpful insights and we should be grateful for that. The question, as always is how we use the insights gleaned from such research. This work opens up a lot of questions and finding answers to some of them is one of the purposes of this blog.

Marketing GRAVITY

Bell uses an acrostic, GRAVITY, to organise his message across seven chapters.

• Geography is the foundational idea, that where we live to some degree determines our relationship with the online world. Your online interests may be determined by the goods and services available locally. Obviously if something is not available it is possible to find it online. But perhaps less obvious is the way we can explore local possibilities online and then travel to make a purchase.
• Resistance is where our economic activities encounter barriers, of which there appear to be two main ones. Distance is one. However attractive an offer may be, there is a limit to the distance customers will travel to take advantage of it. The second is ease of searching for a solution to a problem.
• Adjacency is about how sales tend to cluster in geographical areas because of the spread of the news of a product or service by word of mouth or example.
• Vicinity is where people with similar lifestyles and values live in very different places and how information passed between them.
• Isolation looks at behaviours in areas with varying degrees of provision of a particular commodity. Where demand is high, local shops will tend to stock more options than in places where demand is low.  So, are people who live in low demand areas, more likely to purchase online?
• Topography explores some of the complexities of relationships between what is available online and locally. It doesn’t follow that online information leads inevitably to online sales. It is possible to find out what is available locally online. This is all further complicated by the growth of mobile devices.
• You explores some of the implications of GRAVITY for developing businesses.

All of these are worth further consideration about their implications for local markets.

One final word of high praise for David R Bell. It is always invigorating to find a writer who knows how to use the word “nice” nicely.

0 A Three Pillar Democracy

Last time I wrote about how “Motivation and Meaning” is behind all economic and political systems. In this third part of my review of “Change Everything” by Christian Felber, I shall consider his chapter about “Advancing Democracy”, wherein Felber suggests a three pillar democracy.

Sovereignty

The chapter describes an approach to democracy where the people are sovereign. Felber lives in Austria and many of the examples are from Central Europe. Quite how this idea goes down in the UK, with a monarch as  sovereign, is not yet known.  (Political parties opposed to membership of the EU, claim they believe in national sovereignty for the UK by which they presumably mean sovereignty of the monarch.  In the real world, Parliament has handed over sovereignty to the large corporations and I don’t suppose leaving the EU will make much difference to that.  This doesn’t make me optimistic that we’ll see a sensible or informed debate about sovereignty in this country.)

The September 2014 Scottish referendum is an example of how direct democracy can empower populations. Felber claims the sovereign people are usually more cautious than their politicians. The results of the referendum, show a significant majority voted to stay as part of the UK. However, the referendum radicalised the people and so in the General Election, May 2015, most seats went to the Scottish National Party (SNP).

The problem was with the referendum itself. The politicians designed the question to meet their own interests. The ambiguities meant many who voted no in the referendum actually wanted change as we saw in the General Election results. If the results of the first ballot was a no to the SNP, the results of the second was a no to the Westminster élite. Is anyone planning to find out what the people actually want?

A Constitutional Convention

Felber would suggest establishing a convention, independent of the Scottish or UK parliaments. The people would elect members of the convention whose task would be to come up with a political solution acceptable to the people of Scotland. A referendum confirms their recommendations.

Under such a system, referendums would stop being the plaything of governments and become a genuine element of participative democracy.  I am not optimistic referendums can offer the public a free choice whilst politicians set the question.

Three-Pillar Democracy

Felber suggests a three pillar approach to democracy that mirrors my three function model for community development.

Representative Democracy

So, representative democracy at national level mirrors the representational role of community organisations. (This link is to the first of three.)  However, practical considerations limit the direct democratic involvement of people.  This is why we elect parliaments, councils, etc – we entrust politicians to act on our behalf.  That our politicians are not accountable between elections is one the major democratic challenges we face.  They write the manifestos and then can change them once they’re in power.  We get to vote for parties and can’t pick and mix policies between parties.  If we disagree with a decision made during a term of office, we have no way of communicating which policy we disagree with through voting.

Our politicians cannot be trusted to truly represent people’s views. They decide the agenda and have exclusive powers to draft legislation, treaties, etc. Their most powerful lobbies are the corporations. The politicians have given away too much power to these lobbies and ordinary citizens have nothing like equal power over the politicians they elect.

Direct Democracy

This is where the second pillar comes in, direct democracy. This mirrors the planning stage of my three function model. Locally, planning is an opportunity for community organisations to meet with other local interest groups such as the council, police, NHS and local businesses.

A convention would be equivalent to representatives of community organisation directly involved in negotiations.   The elected convention’s task is to draft treaties and other agreements, which act as frameworks for politicians, on behalf of the people. They would not normally draft legislation, their role is constitutional.  So, determination of the relationship between Scotland and the rest of the United Kingdom, would include the roles of the Scottish and Westminster parliaments.  Parliaments make decisions about legislation within the constitutional agreement.  The convention would act in an open way, consulting with all interests and producing legislation for agreement at a referendum.

This would be for deciding constitutional issues, eg Scotland’s governance, the treaty with Europe (an international convention, perhaps?) and so on. Anything requiring a referendum would start with a convention.  The referendum would be to accept or reject the findings of the convention.

Participatory Democracy

Finally, participatory democracy is equivalent to the delivery function in my local model.  It is where people can be directly involved in their place of work, for example.

As these three pillars develop, they reinforce one another. As people find out about the enhanced power of participatory democracy, they are likely to increase their own involvement. With such political structures in place, we are likely to find they reinforce democratic involvement in our neighbourhoods and work places as well as at council and parliamentary levels. We will rediscover the political process in the marketplace.

The three local functions may seem weaker than the national democratic functions.  This is a product of contemporary national politics; national politics is more powerful and the weakness of local politics is part of the same system.  Introducing these three distinct pillars of democracy would strengthen local democracy people became more familiar with democratic participation.

1 Motivation and Meaning

From Economics to Politics

Christian Felber’s Change Everything is about economics but it soon becomes clear democracy is central to its proposals. If we are seeking a fair economic system, then we must improve our democratic or political systems.  This post focuses on his chapter: Motivation and Meaning.

History tells us humanity is very good at inventing unjust economic systems. Indeed the purpose of many political systems appear to be to legitimise injustice. Where there is justice it tends to draw little attention and can seem unstable. However, given most political systems prove unstable in the end, this does not mean justice is impractical.

It’s easy to forget the equitable purposes of institutions over time. For example, insurance used to be a means to share risk. If someone claimed, everyone’s premium would increase by a very small amount. These days if you make a claim, your premium increases by a large amount. We’ve forgotten the equitable principles underlying the original scheme.

There are many other examples; the carpetbaggers of the 1980s, who joined building societies with the intention to vote for their demutualisation. Demutualisation changed assets owned collectively into shares owned by each shareholder.

So, there is something more fundamental than either politics or economics. It is fundamentally to do with our spirituality, the values that we bring to the marketplace.

From Politics to Spirituality

Felber’s chapter Motivation and Meaning is a good place to start.

Survival of the Fittest

I have written in earlier posts about the mis-use of Darwinism by apologists for the current economic system. Felber writes on page 106, “the capitalistic, that is, social Darwinist image of humankind according to which human beings are primarily motivated by egoism and competition“.

Why do we attribute this view to Darwin? Presumably it alludes to the “survival of the fittest”, a term missing from the first edition of the Origin of the Species. Alfred Russell Wallace who proposed a similar theory of evolution to Darwin’s at around the same time, makes no reference to it.

Somehow survival of the fittest has become integral to the Theory of Evolution. Why is this? It seems likely competition was an important element of the worldview of the powerful at the time of Darwin and Wallace. They seized upon survival of the fittest as a way of demonstrating their approach as natural.

It is hard to think of a more blatant example of science being formed by society. The powerful wanted a theory of evolution that supported their way of doing things and that’s what we have. They say, “Our economic system is just like natural evolution where the powerful survive and the weak go to the wall.” This is perhaps one of the most damaging myths of our time.

Questioning Competition

Is it true competition solely motivates people? 80% of new business start-ups fail. Obviously there are many reasons they fail and some ideas deserve to fail. But how many fail because they believe in competition? They believe not only that they have to protect their business against competition but that they have to work alone, never in partnership. I suspect it is those businesses that understand businesses survive when they collaborate that do in fact survive (assuming they are viable). Viable businesses fail when they are badly managed and a mindset that is competitive to other businesses and bullying to its staff is likely to be poor at management.

On page 113 Felber writes,

“Thus the root of the problem lies in inwardly impoverished people who are incapable of investing their own lives with meaning; they lack the self-confidence needed to recognise themselves as being ultimately responsible for their own lives and their own decisions.“

Competition pushes the reason for my failure onto someone else. It motivates me and maybe in the short-term winning the competition means business success. But in the end it seems “those who live by the sword perish by the sword”. The original Greek does not use ‘die’ but ‘perish’. The difference is intentional, to live in this way causes the person to perish, to lack meaning or purpose other than to triumph in competition. We confuse perish and die because to perish is to die from the inside out. Most of the world’s religions recognise this.

Competition and Meaning

If we are planning to change everything, to change economic systems towards something more collaborative, equitable and sustainable, it is necessary to change our political systems and to change our political systems we need to change ourselves. It’s a tall order and one that has been known for centuries. If we’ve been trying for centuries and failed, why should we be successful this time?  If only competition motivates us, what does this say about the meaning of our activities?  Is it true the “business of business is business”?

Who says we’ve failed? Perhaps the times and places where there is justice appear rare. Often they are communities within a larger economic system they oppose, perhaps by having a profound impact. The retail co-operative movement, which because it was successful inspired many other experiments into mutuality and education, had an impact in the fine-grain of our lives in many ways we don’t notice unless we know some history. We don’t see it because our attention is rarely drawn to it. This is what happens when you have a single prevailing economic worldview.

2 Creating an Economy for the Common Good

The retail co-operative movement and its associated mutual experiments, was for a time a parallel economy for the common good to the dominant liberal economy of the Victorian era.

It challenged not only the mainstream economy but also the stream of socialism based on trade unions and centralised state ownership. It offered collective ownership as an alternative to private and state ownership.

This model not only flourished but initiated many institutions that are today foundational to the mainstream economy. Sadly, the government privatised many of these institutions; privatisation has absorbed not only nationalised industry but many mutuals. Its grip on the economy and our imagination is far greater than the so-called threat of communism achieved.

From the perspective of the twenty-first century, communism was never an alternative to capitalism.  The Soviet Union practised state capitalism and trade union based socialism in Britain was an accommodation to the capitalist economy and not a genuine alternative to it.  The difference between twenty-first century businesses and the days of trade union power is the decline of large industry.  It is hard to see how unions could regain the power they once had without these large employers.  Large companies these days are not employers but accumulate capital.  Perhaps these differences are a matter of degree but trade union decline cannot be fully reversed by a more favourable legal environment.

Change Everything

It is hard to envision an alternative to the prevailing neo-liberal model and that is why I welcome Christian Felber’s new book, “Change Everything: Creating an Economy for the Common Good”. Here at last is a credible alternative!

The Economy for the Common Good is an international movement, originating in Austria. Felber’s book is the first time his thinking has been available in English. In it he describes a framework for a new understanding of the economy; moving from “the business of business is business” to “the purpose of business is the common good”.

It is important to understand Felber is not promoting a single model for the economy but a different standard any number of models can address. This standard attempts to overturn the neo-liberal mindset, which sees competition as central, to a worldview based on co-operation. I’m planning to review this book over several posts. In this first post, I shall make three comments, reflecting my concerns about his approach. They are not so much criticisms as attempts to show where there may be difficulties.

I want to promote the book as I cannot possibly, in a few posts, do justice to the ground it covers.  These comments may assist a critical reading.

Co-operation happens already

One of the lies about the neo-liberal model of the economy is business depends solely on competition. Felber claims competition is less effective than co-operation and I would go even further.

Felber includes a chapter of examples of the economy for the common good from all over the world. These are valuable and important and I plan to write about some of them soon.

What I don’t think he dwells upon fully is how even neo-liberal business depends on co-operation. Competitive ideology undermines business because it is naturally collaborative. Successful businesses collaborate. Many small business owners flounder because they believe the politicians and think they are in a cutthroat competitive environment.

Too much business collaboration is behind closed doors. Many scandals are where politicians are swayed, where relationships become way too cosy.

So, with the neo-liberal worldview collaboration can become counter-productive but for most small businesses it is a natural route to a prosperous business. Good businesses put business in the way of other businesses; they help one another to grow.

Felber’s values would place business collaboration in the service of the common good and not primarily for private profit.  He does not rule out private profit but moves it away from being the main point of economic activity.  Many entrepreneurs might embrace Felber’s approach because it offers a more supportive environment than the neo-liberal model with its aim to centralise economic activity in a few powerful hands.

An economy within an economy?

Felber’s approach is admirable because it could in principle replace the prevalent neo-liberal model. It’s certainly possible, after all in the immediate post-war years, neo-liberalism was the preserve of eccentrics. Owen Jones describes in the first chapter of his book, “The Establishment“, how these peripheral eccentrics developed the dominant ideology of our time.  Now we’re the eccentrics, up against powerful vested interests.

The reality is, for a time at least, the two worldviews will co-exist. This is much as it was for the co-operative movement. For all its successes it never broke through and ultimately lost out to the uneasy alliance between capitalism and a trade union based socialism.  We can see now this version of socialism was not really an alternative to the capitalist system but an adjunct to defend the interests of workers within the system.  This unstable alliance ultimately collapsed when neo-liberalism became dominant during the 1980s.

Never underestimate the power of dominant ideologies to colonise opposing worldviews, just as mutual businesses have become neo-liberal businesses.  Another example is the domination of the Christian faith by the Roman Empire.  Constantine bought into Christianity because he believed it would help him win wars.  That ideological struggle continues to this day at the heart of every church congregation.

A Worldwide Movement for Change?

Is it really credible that a worldwide movement can usher in a new approach to the economy over the entire world? It is a tall order and I hesitate to even concede it is possible.

I think we need to look again not only at the successes of alternative economies but also at their failures. Why did the co-operative movement lose out to the conventional economy, to the extent it largely disappeared in the 1980s UK?

It’s worth asking how far we can go without dismantling the neo-liberal systems? It may be essential to dismantle them but what happens if they persist? What if the vested interests are too powerful? What can be achieved under those circumstances?

Understand I ask these questions to strengthen the movement. People need to see immediate benefits if they are to commit to this approach. Each person who commits weakens the old system and so the advantages of a parallel economy need to be clear.  I shall return to this theme in the future, especially to explore how the Internet can support this parallel economy.

The Challenge to Privacy

Many people fear what happens if Felber’s models are too full on. What if our economic systems imply a society where differences are not tolerated, where everyone knows everyone else’s business?

This appears to be a concern among those living in alternative communities and it is something important to take seriously. Why?

Because the last socialist experiment was a civil liberties disaster. Granted it was state capitalism, capitalism by other means. But it is always true in human systems that freedom and equality can be opposed.

Felber’s approach is attractive because there is no single model. Small businesses can still exist, offering independence to their owners and they can choose the extent to which they adhere to Felber’s framework. This allows perhaps sufficient wriggle room to allow substantial freedom in a world where there is greater equality.

Freedom and equality are not natural givens and they need to be understood and defended.  What do you think?

0 The Living Wage or Citizens’ Income?

We live in a welfare state and the major recipients of welfare are the Corporations. It’s the rich that get the money and the poor that get the blame.

The Corporations pay low wages and expect the state to top up their employees’ wages through tax credits. There’s a similar scam with housing benefit. Employers set wages just like landlords set rents and both expect the state to make up the difference.

The Living Wage

So, the Chancellor has impose restrictions on tax credits. He also claims to have introduced a national living wage, by which he means a version that will not upset the corporate lobbyists.  This so-called national living wage is really an inflated version of the minimum wage.  The living wage is supposed to be a wage where a family lives without benefits.  This new level of the minimum wage does not fully compensate families for the loss of tax credits.

You see if the Chancellor wanted to introduce a genuine living wage, he could offer financial incentives to businesses, to help them pay it. The government could means test businesses compensate them if they genuinely need help.  The Corporations would need to use their offshore accounts or bosses’ bonuses to find the difference.

It would be interesting to explore the consequences of businesses going cap in hand to the government. Why should employees accept the blame for their employers’ stinginess? If employers had to make their case directly to government to receive benefits to subsidise their wages, it would be a massive increase in accountability.  They would have to pay at a rate equal to or more than the living wage set by the low pay commission.  I suspect most Corporations would find the money.  It would be small businesses that would need to the financial support.  And why not?  With the level of subsidy for businesses overall reduced, the state would assist small businesses creating jobs in the local market.

The Small Business’s Dilemma

Without help, many small businesses would go bust if the living wage were compulsory. Let’s say someone opens a coffee shop and employs one person on the minimum wage. That person currently claims tax credits which helps them pay their bills.

The business owner meanwhile lives on drawings from the business, which often means they live on their savings.

One claim about the living wage is if everyone received it there would be more money circulating in the economy. In theory this means more people would have spare cash to buy cups of coffee. Increased pay for the employee is a fixed amount going out every week. Increased takings depend on factors that cannot be guaranteed. Even with more money circulating because everyone is on a living wage, it’s no guarantee the coffee shop would break even.

This is the dilemma facing many small local businesses. Whilst Corporations grumble about paying the living wage, they have more capacity to accommodate such changes.

The idea of grants to businesses who pay the living wage is one possible approach. It would save government money by means testing businesses. The Corporations would need to redeploy some of their offshore profits. It would be very clear they’re the beneficiaries of government subsidies and do away with the illusion it is the poor who are to blame.

Citizens’ Income

A living wage is certainly an attractive model because it would make the Corporations accountable. The alternative would be citizens’ income. Here everyone would receive a payment irrespective of whether they are in or out of work. In work, all earnings are taxed. Employers would be obliged to pay a minimum wage because when people have some income, they are less likely to accept low wages.  The government could set the minimum or leave it to market forces to work their usual magic (usually not a good idea).

Citizens’ income resolves a lot of issues for small businesses because their staff are subsidised already.  However, citizens’ income subsidises corporations unless they contribute to it.  So, tax businesses on the number of people on their payroll and allow them to claim tax credits if this tax means genuine hardship.

Living Wage or Citizens’ Income

Citizens’ income does achieve a lot of what we need, ending welfare dependency and getting money flowing in the economy. However, is it able to make the Corporations accountable to the government in the same way as a compulsory and subsidised living wage? It’s big advantage for local businesses is simplicity, they would have no administration and would not need to apply for grants to subsidise their pay.  (I’m assuming my idea of taxing businesses to pay for the Citizens’ Income is not on the agenda.)

Whilst there is a need to debate these two approaches and understand their relative merits, do not forget one thing. The whole system supports the interests of the Corporations. They will resist both approaches because the current system of unaccountable subsidies for Corporations from the state suits them fine.

0 Sunday Trading or Weekend Market?

In this series of posts I’ll explore some of the issues local businesses face. What do I mean by a local business?

There are two types: established and developing. An established local business will do three things:

1. Employ workers and pay them at least a living wage (original definition)
2. Pay their taxes without tax avoidance
3. Invest surplus locally

These are objectives and many local businesses fall short of them for a variety of reasons.  Some are too small to employ staff or can’t afford the living wage. Some are too small to owe taxes or they do not generate sufficient surplus to invest.

The economic environment in which local businesses operate is adverse. It is adverse because of the decisions made by politicians of all parties over many decades.  So, most local businesses are developing. They may aspire to be established but find they fall short. This is why many local businesses are small.

And we have to face it, many self-employed people have little prospect of breaking even but are under pressure to stop signing on.  Self-employment is one of ploys used by this government to massage the unemployment figures and so claim employment is on the increase.

Sunday Trading

The demand to bring an end to restrictions on Sunday trading has been in the news recently. The BBC has found an endless procession of vicars to discuss family life. They also found trade unionists who rightly express concern for workers who not only have to work on Sundays but will lose the extra pay many receive for working on a Sundays.

I want to leave these arguments to one side. It is well established that everyone should have at least one day each week free from work and it is reasonable to expect this to be on the same day as the rest of their family. Perhaps it is not essential everyone agrees on which day it is. Not all religious traditions celebrate the same day and people should be free to celebrate their chosen day and equally free to trade on the other six.

My concern though is why the government is considering legislation to enable local authorities to authorise lifting restrictions on Sunday trading. Members of Parliament rarely have ears for anyone other than corporate lobbyists. It has to be at their behest because it is solely large corporations that lose out at present. Large stores are currently permitted to open for only 6 hours on Sundays.

This allows a minor competitive advantage for small local businesses. With so little money in circulation, local economies cannot afford corporate interests to hoover up more and salt it away in offshore accounts.

Weekend Markets

There is a limited amount of money in circulation and lifting these restrictions will not increase it. It will increase the amount leaving local economies. If only local businesses had their own lobby, maybe we would start to see legislation that favoured them.  Just imagine if it were possible to extend the restrictions to 48 consecutive hours of closure each weekend!  This would allow smaller traders to establish their businesses, build a customer base and maybe introduce a greater sense of community into the shopping experience.

The large supermarkets, department stores and shopping malls have taken shopping out of the public space.  If they were not permitted to open at weekends, it would offer public spaces an opportunity to develop what they had to offer.  This might actually favour churches and other non-trading bodies as their activities belong in the public space.  (I understand some churches in the United States are in effect shopping malls.  This is not something I would encourage as it is still privatising shopping space.)

But it is quite different to envision stepping out of a church service into a thriving local economy.  Under these circumstances the church would contribute to the weekend economy by being another reason for people to be present in the marketplace.

Family life?  Well, the Corporate employees would have their 48 hours.  If this allows smaller businesses to become established, then maybe they could afford to close mid-week when demand would be less while the big stores are open.

Of course, this will never happen and even if it did, it wouldn’t work in isolation from other changes needed in the local economy.  So, this is part of a larger vision.  Next week I shall show how the local economy could be funded.