Category Archives for "Mutuality"

0 St Benedict in the Marketplace

About ten years ago, BBC2 broadcasted a short series called the ‘The Monastery’.  Six men lived in a monastery for a month, adopting the same discipline as the monks.  The monastery was Worth Abbey and the Abbot Father Christopher Jamieson (I believe he still is).  The programmes had quite an impact at the time and Jamieson said many business people contacted him seeking spiritual guidance.  Not all of them were Christians and many had not previously heard of St Benedict, who first wrote the rule that governs Worth Abbey many centuries ago.

There have been other similar programmes since and Jamieson published a book, Finding Sanctuary.  It had a secular imprint because Jamieson wrote it for everyone, not just believers.  It sold out during the first week of publication.  I think that was in 2006, the edition available from Amazon is dated 2008.  (I’ve pasted in a link to the book, in case you’re interested but I am not reviewing the book in this post.)

I am returning to Theonomics, the book I started to review last Friday, when I commented on one short passage from the book.  Today, I shall review one chapter from the book and next week finish by reviewing the whole book.

Chapter 3 on page 37 is “A Framework for Flourishing” by Alan Hargrave.  This chapter is about the Rule of St Benedict and its relevance to business.

Think about religious communities as models of ideal communities.  They are not ideal communities, far from it but places where their members make a conscious effort to live in community.  Benedictine communities follow a rule developed by St Benedict where the community members make three vows.  These vows are not poverty chastity and obedience but obedience stability and transformation (Conversatio Morum).

Here is my take on these three vows; we can all consider them when building local marketplaces.

Obedience

Obedience is not what you might think.  The Latin root of the word means to listen.  The obedient person pays attention and acts accordingly or appropriately.  So, the opposite of obedience is not disobedience but absurdity, acting without reason.

There are those who cannot read the signs of the times and so act inappropriately, not even in their own long-term interests.  Climate change deniers spring to mind.  It seems no evidence will convince them.

I recently wrote a post about Prayer in the Marketplace, wherein I suggested prayer is paying attention.  Obedience is not doing what you’re told but paying attention and acting appropriately.

Stability

It’s where your feet are.  That is the important thing to remember.  This vow is about choosing a neighbourhood and commiting to it.  Your chosen neighbourhood is not better than anywhere else because all places are worth  commitment from those who live there.

Our neighbourhoods are desperate for people who commit to them on the behalf of others, who seek sustainable approaches to the issues of their chosen places.  Community depends upon incarnation, the real presence of those who live there.

Transformation

Scholars tell us Conversatio Morum is difficult to translate.  A close literal meaning is conversion of life but as such it implies an individualistic focus on self-improvement.

Perhaps it is better thought of as a commitment to conversion of life in general, for everyone.  The important thing is an opportunity for everyone to meet their potential;  removal of constraints on human development, such as poverty.

The Radical Agora, marketplaces at the heart of revitalised neighbourhoods, places where community happens, is one way of visualising how conversion of neighbourhood life might look.

The point is the Radical Agora cannot happen if this vision of transformation is all we have.  We need obedience and stability too.

Do you think Benedict speaks to our communities today?  If you have a view, please share it in the comments.

2 What is Common Ownership?

My grandparents’ generation understood common ownership.  Even in the early 2000s, they would proudly quote their membership number when you mentioned the co-op.

It is only in relatively recent times that membership of the co-op has come to mean very little.  In days when every supermarket has a loyalty card, the co-op divi makes little difference and can be worse as in recent years there’s been no dividend.

At one time the divi made a real difference to the household budget.  And shopping at the co-op guaranteed low prices and good quality.  All of these were benefits of common ownership.

Theonomics

The reason I’m raising this issue is the book I shall review over the next few Fridays.  “Theonomics: Reconnecting Economics with Virtue and Integrity”, edited by Andrew Lightbown and Peter Sills contains essays about economics by Christian practitioners.  The papers vary in quality but it is a helpful snapshot of the thinking going on in the churches.

I’ll take a look at the more inspirational papers next time but this time, I want to respond to this passage from Peter Sills’ paper “A Christian Framework for Economics”.  He quotes Pope Leo’s concerns for poverty in the capitalist system and then we find this passage:

“Pope Leo’s social concern is an expression of the divine concern for the poor rather than a political manifesto, and he was equally critical of socialism, particularly its advocacy of common ownership which he saw as destroying the natural right of property.”  (Page 22) (Rerum Novarum, Leo’s encyclical,  published in 1891.)

I’m not particularly concerned about defending socialism, a somewhat varied collection of beliefs.  To praise or condemn socialism, it is usually helpful to explain which particular version of socialism you are praising or condemning.

Neither do I praise or condemn the “natural right of property”.  People do own property and I’m not aware of any political system that does not endorse a right to private ownership of property unless it uses totalitarian methods to enforce some alternative.

State Ownership

Pope Leo was writing long before the Soviet Union and so it is difficult to know exactly what he meant.  In the twentieth century we saw several experiments forcing populations to give up private property in favour of “common ownership”.  But what we saw was not common ownership but state ownership.

I am in favour of state ownership where it is appropriate.  The state must own the NHS, for example,  to deliver free health services to the population.  Paying for the NHS through taxation is the best method we have been able to find.  It is hard to imagine any advantages to moving the NHS into common ownership.

Common Ownership and Private Enterprise

The point is different activities need to be supported appropriately.  Common ownership is not the same as state ownership.  Common ownership is where customers or workers own an enterprise.  So, for example, John Lewis’ workers own the company.  Those workers also own their own property.  When they receive a dividend from the business it is theirs to spend as they wish.  Whilst I’m sure this approach is consistent with some versions of socialism, it does not follow that all those employed by John Lewis are socialists!

Common ownership is an approach to economics embedded in a system where everyone owns private property.  In a system that optimised common ownership (this would mean common ownership of most established businesses) there would still be some state ownership, eg the NHS, and there would still be private ownership.

Every household would own property, some financed through common ownership.  But more important there would still be private businesses.  And the place where they would be found is locally!  Small businesses, privately owned are an efficient way of testing new ideas.  There is work and expense in  setting up common ownership and for a lot of new businesses, it is more economically efficient to test a new business at its owners’ risk.

The time to decide to create a co-operative or social enterprise, or use any other beneficial business model, is once you have a business.  These days successful businesses are usually incorporated.  It would be good to see more proven businesses exploring alternative pathways with elements of common ownership.

The Common Good?

Pope Leo went on to say:

“develop the idea of the ‘common good’ as a positive duty ‘to make sure that the laws and institutions, the general character and administration of the commonwealth shall be such as to produce of themselves public well-being and private prosperity.”  (page 22)

Sills goes on to show how the Catholic Church developed these ideas during the twentieth century.  My question for Pope Leo is: how does he intend to deliver on his light-weight concept of the common good without common ownership?

Common ownership is the road less travelled.  It is rarely advocated by politicians or theologians even though it offers “public well-being and private prosperity”.

9 What Are Community Assets?

Community organisations view ownership of community assets as something of the Holy Grail of community development, although in practice they can be something of a mixed blessing.

Of course, I need to define what I mean by assets. Usually when we talk about community assets, we mean buildings. On reflection people may add a few other things such as a mini-bus or play equipment but normally assets mean buildings.

Asset or Liability?

I want to challenge this view in two ways. The first is perhaps more superficial but still important. Assets can be liabilities. Anything that requires investment of time money or passion can become a liability. It can be a drain on resources. For all the effort invested it is possible you won’t see the benefit you expect.

From my experience I can think of examples of buildings that have worked for communities and buildings that have not. I have seen buildings divide a community as local people wrestled for control. I can think of several examples, to the extent I would argue this conflict is the most common outcome for a community that owns a building.

Perhaps this most likely happens with buildings controlled by weak organisations, where two or more factions lay claim to them. Organisations established for the benefit of the community but at the same time independent of the community, perhaps fare better. Their building belongs to them and not to the community.

Two Examples

Perhaps an example of a building I was involved with some years ago, where the organisation is strong enough to withstand these power games is The Wesley Centre in Maltby. I haven’t been in touch with them for some time and so don’t know their recent history. However, this looks like a thriving community centre, supported by rental income from small businesses.

An example of assets that did not work out for a community is Burngreave New Deal for Communities. I’ve written about this at some length because the lessons are important. £50 million invested in a community that is now worse off than similar neighbourhoods in the same city that did not receive the same investment. One of its slogans was “legacy not history” and the idea was that income from the assets would fund community development in the future. The City Council owns the assets now and nothing finds its way to the community. (I don’t blame the City Council for this. They had to take on the assets and have had to close other buildings in the area to keep the New Deal buildings going. If they sell the New Deal buildings the money has to be returned to national government.)

So, I’ve offered two examples from my experience, with very different outcomes. It is easy to see buildings can be liabilities as well as assets. Loads of well-managed organisations own buildings and many buildings offer benefits to local residents. The point is they are not guaranteed to be an asset and can just as easily become a liability.

What are Community Assets?

There is a deeper argument against viewing buildings as assets. What do we mean by assets? Too often we set off asking the wrong questions. Buildings can be an asset in the technical sense of bringing value to its owners and they can be an asset to the wider population if they bring a perceived benefit into an area.

However, buildings and other equipment are not the only types of asset there are. Indeed, I would argue the assets behind a building that works are the assets that matter. It is not the monetary value of the building so much as the contribution of the organisation that manages it.

If only we could find the assets that make building ownership successful and isolate them! Maybe we would find they work as assets even without owning a building.

Six Categories of Community Asset

A few months ago, I wrote about Asset Based Community Development (ABCD). In this post I reviewed a book about ABCD which lists the assets available to communities in six categories:

Over the next few weeks I shall explore these in turn. They are part of my spirituality sequence but could equally be in the community development strand.

Why spirituality? Well as I explained in an earlier post, spirituality is essentially about paying attention. All these assets imply a commitment to a place and digging deep to discover the assets already present.

I am not very familiar with ABCD and intend to read more about it. However, I thought it would be interesting to explore these six types of asset from my experience and then perhaps compare my notes with the findings of those who practice ABCD.

So, next time I shall explore local residents’ skills.

0 Fundamentalist Economics

Is it true scientists and engineers are more prone to being recruited as jihadis?  Paul Vallely in his Guardian article, Are scientists easy prey for jihadism? suggests maybe it is.  This is not an easy question to answer but perhaps we see  fundamentalist economics at play here!

Engineers solve convergent problems.  These can be highly complex but if you crunch the numbers, the likelihood is they will converge on one or a few answers.  Furthermore, once you get it right, others can reproduce your answers and there may be consensus about the correct answer.

This approach contrasts with divergent problems where more information leads to increasing numbers of answers.  There is no right answer and so everyone has to choose the answers they want to run with.  This means answers are contested and any consensus will be provisional.  The arts and humanities generate divergent problems.

Vallely’s article suggests someone has studied mainly convergent problems might seek convergent answers in all disciplines.  This leads to a fundamentalist mindset, where there is one answer and everyone who disagrees is being deliberately obtuse.

I have two problems with this view:

Are Scientists and Engineers really More Prone to Fundamentalism?

Vallely suggests this problem may originate in universities in the Middle East.  This could be so.  However, if the problem is with convergent problem solving, then any student in engineering or science disciplines would be vulnerable.

First, whilst I appreciate scientific disciplines may be taught in such a way that only convergent problems count, it simply is not true that all scientific problems are convergent.  Indeed physicists sometimes adopt a mystical worldview as they probe the mysteries of relativity and quantum mechanics.

I can appreciate some people who work in IT might see all problems as convergent.  Certainly many people treat website design as if it is!  A moment’s reflection would show website design is far more a human than a technical challenge.  They are communication tools and so good design addresses the infinite range of human perceptions.

Surely, the problem is the other way round?  Many religious people do not understand science.  The fundamentalist mindset is attracted to a worldview where both science and religion produce single correct answers.

Take a look at this passage from Vallely’s paper:

What Rose has done is to highlight three specific traits that characterise the “engineering mindset”: first, it asks “why argue when there is one best solution?”; second, it asserts “if only people were rational, remedies would be simple”; and third, it appeals to those with an underlying craving for a lost order, which lies at the heart of both salafi and jihadi ideology.

These are traits of fundamentalist thinking.  Vallely is right when he says it depends on how scientific subjects are taught.  Correlation does not necessarily imply causation.  Fundamentalists attracted to engineering are just as likely as engineers becoming fundamentalists.

Here’s a cartoon about Religion, Science and the Fundamentalist Mindset.

It is an Economic Problem

So, what explains this correlation (if it exists)?  I think the clue is right at the end of Vallely’s article:

But they will need something that cannot come from western cultural experts. What the report omits to point out is that students will require input from others within their faith – to open up to them the richness of the Islamic traditions that constituted the religion before the arrival of oil-rich salafi fundamentalism.

The key word is “oil-rich”.  Fundamentalism is divisive because it promotes superiority for those who are right and  traditionally wealth is the primary indicator of who is right.

Neo-liberal economic systems treat economics as a science.  When I was at university in the 1970s, economics was a part of the social sciences and as a real scientist, I looked down on social sciences as a subject that had pretensions to scientific rigour.

Certainly, some social scientists envy science’s clarity.  But economics is a divergent system.  Whilst it is possible to play the system if you have enough wealth or power, it still depends on multiple human interactions.

IS Same or Different?

The wealthy use the power of wealth to control others.  Fundamentalism is one way of doing this.  Islamic State (you know who I mean) opposes the West, not because they are different but because they are similar.  The neo-liberal state is a direct competitor to their power base.

Most of us don’t have a stake in this rivalry.  Refugees and those killed as a result of terrorist attacks in the West are victims of a proxy war between two competing ideologies.  The wealthy have a lot to defend and can afford the weapons.

We’re often told IS is not Medieval because they use the Internet and modern warfare but the rich and powerful have always been with us.  They’ve always dealt in certainties because it allows them to divide the world into good and evil.

Vallely is right about the richness of Islamic traditions.  The best in all the religious traditions favours supporting ordinary people who simply want to make a living in the world.

1 Imbricated Roles

A post this week, about the presence of development workers in neighbourhoods, mentioned imbricated roles. A search for the term showed me it is not present online. Google claims they are the same as nested roles.

A nested role is one job within another.  Perhaps this happens where the job description for one job has other related tasks added to it.  The new role may have additional privileges, eg higher pay but contains an older job.

Imbricated roles, especially within community development, describe how two functions overlap.  So, a local resident employed as a development worker in their own neighbourhood has a highly imbricated role.  Note being a resident is not part of the job; their appointment may be because of their knowledge of or commitment to the area but it is not a formal part of the job description.

Unfortunately I have mislaid my copy of Skills in Neighbourhood Work by Paul Henderson and David N Thomas.  I have checked the index online for the second and fourth editions and under roles there is a section about overlapping roles.  It is possible they demystified later editions by reverting to the word overlapping.  (The word imbricated in Latin means overlapping.)

It would have been helpful to re-read their section on imbricated roles but that won’t stop me!  I favour sticking with the term imbricated roles because I think it makes a specific point about development work.  What are the implications for varying degrees of imbrication?  This is not about deciding the ideal degree of overlap so much as assessing the pros and cons of differing amounts.

What are Imbricated Roles?

I understand imbricated role to mean specifically overlap between residence in and commitment to a particular neighbourhood with the formal role of development worker.  It is easier to follow if you assume by formal role, someone appointed to do the job by some independent authority.

There may be other types of overlapping role.  A rural doctor may find, for example, their circulation around their patch means they play several roles in addition to their medical role.  But I shall use imbricated role to mean a specific commitment to the neighbourhood which at one extreme means residence in the neighbourhood.

To illustrate why this is important I shall consider four degrees of overlap and their strengths and weaknesses.

75% – 100% Living in the neighbourhood

These percentages are notional but this degree of overlap strongly implies the worker lives in the neighbourhood where they are practicing development work.  100% may be someone born there and living their life in the same place.  75% may be someone who moved into the neighbourhood when they started to practice as a development worker.

Many workers choose to do that.  Of course living there can mean a variety of things.  The worker could move into housing in some out-of-the-way corner, or in an adjacent neighbourhood.  They might live there but not make a big thing of it and spend a lot of their time elsewhere.

The big strength of this approach, especially for the lifelong resident, is stability.  This is someone with a proven commitment to the place, trusted and so able to act as a catalyst for change.

However, there are disadvantages.  Potentially the biggest problem is role confusion.  If the worker is not clear about the difference between community activism and development work, the chances are they will find they are paid to be a community leader, the role played before employment!  This role confusion has he dual effect of (1) undermining the activist role, and (2) downplaying the development role.

Perhaps this approach works for some.  From experience, I would not recommend workers take on this type of overlapping role.  Mostly they need more distance.

50% – 75%  Identifying with the neighbourhood

Here the worker is not resident in the neighbourhood but spends a lot of time there, drinking in the pubs, participating in events, etc.  They may live outside the neighbourhood, far enough away to experience some distance.  Most workers find they drift into this degree of overlap because they might have moved into the first neighbourhood they worked and then their job moved on and they were happy to stay where they were.

Where a worker enjoys building inter-personal relationships, this approach may work very well.  They have some distance from the neighbourhood, perhaps enough to be perceived as an outsider but also likely to be trusted.

The temptation is to identify too closely with activist work.  Many workers find they are doing admin for local groups or participating in leadership roles.  I found it is too easy to be drawn into taking on roles that should be occupied by local people, perhaps because the worker is one of the most skilled people around and has the time to do it.

25% – 50%  Accompanying the Neighbourhood

This level of overlap implies someone who committed to developing a particular neighbourhood and approaches it by mentoring community leaders.  A development worker of this type will stand out as different from the local residents.  I found I was more successful when I wore a jacket and tie in my development worker role.  It reminded residents and other local workers that I was an outsider with a specific role and it also reminded me.

This approach does not imply reduced commitment to the work, it is an alternative approach and perhaps better suited to the more introverted worker.  It does have the big advantage of making a clear distinction between the development and activist roles.

The big disadvantage, as the degree of overlap declines, is disengagement from the neighbourhood.  Finding a balance between an outsider who brings new ideas and resources to a neighbourhood and someone delivering a government scheme is really important.  There is a fine line between development work at this level of overlap and simply being a worker in the community.

0% – 25%  Independence from the neighbourhood

At first this degree of overlap may seem to be a non-starter.  There are any number of workers in the community placed there for a few months to deliver some scheme.  Their focus is in delivering their employers’ programmes and not local development work.

However, an example of someone who rarely or never visits the neighbourhood and yet has a development role might be the manager of a community development team.  They might care about several neighbourhoods and act as a mentor for their team.

I have suggested in my ebook, Community Development is Dead!, the future of development work is centrally based teams with no-one assigned to specific neighbourhoods.  They would work by supporting local leaders or activists.  They would visit a neighbourhood to help with the design of events or activities but the networking would be largely carried out by local activists.

A similar role might be carried out by an online development worker who coaches local activists.  These may be in communities far away, they are never likely to visit.

Can this work?  The potential disadvantages are obvious.  The development worker would not develop the networks of  contacts, the relationships that result in successful development work.  This would be and possibly should be a task for local activists.  Certainly it is hard to see how this might work for someone with no experience of working on the ground.  But existing practitioners and even retired practitioners may be able to contribute something of value from a distance.

Conclusion

I have attempted to present each degree of overlap in the most positive light possible without denying the disadvantages.  The point is to show what is at stake.  Each degree of overlap has strengths and weaknesses and it is important the worker understands the dynamic of their chosen approach.  It certainly is not a given that the only valid approach is to live there.  Development workers soon find the work is simply not that simple.

So, what percentage would you assign to your approach to development work?  What do you see as the advantages and disadvantages of your chosen approach?

0 Money Circulation in the Local Economy

I’ve explained this to several people but so far not written about it!  Writing about the local economy, it is easy to imply local economy means money is somehow ring-fenced to particular localities.  The key thing to remember is money circulation is the key to local economies.

The wealth of any particular geographical area would be measured (if it is possible to measure it) as the flow of money through that area.  Money accumulated is not a measure of wealth because accumulated money is not active.  Whether it is in a shoebox under a bed or held in a bank account, inactive money does not contribute to local wealth.

Sometimes people use the leaky bucket as an analogy.  The thing is you need the leaks.  What matters is where the money flows out to and that the flow in at least matches or exceeds the flow out!

Money Circulation Tornado!

Think of a tornado.  Air circulates in a column that narrows as it approaches the ground.  If you look down on it from above, you would see a spiral of air currents if air currents were visible.

This is certainly over-simplified but the point I want to make is the circulation is not solely around a neighbourhood but has to flow through other parts of the economy.  In practice money will circulate in far more complex ways.  It is impossible to map the flow of money but it may be possible to find out what blocks the flow.

Money can accumulate at any turn of the spiral.  However, the further out you go, the more likely it is accumulation of money will damage the economy.  However, there are some advantages to accumulation of finance.  Finance can be used for large-scale infrastructure projects.  These projects bring jobs and finance to local areas.  This is usually described as investment.

There are generally two ways money accumulates.

The first is through taxation.  The big advantage of taxation is use of money is to some degree transparent and accountable.  Public sector finance creates jobs and supports the economy in local areas.

However, the trend in recent years has been to privatise public services.  When local authorities use tax payers money to enter into long-term contracts, where voters are not permitted to see the terms and conditions of those contracts, they have sold their democratic accountability.  I’ve never understood how large corporations can possibly be more efficient than public services; corporations pay shareholders and this is an additional cost.

The corporations are the second way in which capital accumulates.  Even here the scale of the accumulation is important.  A small developer who raises capital to build houses probably does little damage to the local economy.  Indeed I suspect many such businesses are finding it harder to raise capital.  Alternatively, a small landlord who buys property to rent may not be such good news.

How is Accumulated Capital Used?

It is worth asking what the wealthy spend their capital on.  The reason finance is not easy to find for small businesses is because most of it is going into purchase of property.  By property I mean things like houses and infrastructure but also shares in companies.

If you own stuff you control it. This is known as a rentier economy and the point is, it is an economy that has slipped the moorings of democratic control.  What we need to understand is a rentier economy is an economy that is anti-business.

It is alarming to hear that production is declining.  We’ve seen further closures of steel companies in recent weeks and this is a sure sign that financial transactions take precedence over transactions benefiting the whole community.

One of the biggest political lies is that opposition to accumulated wealth, or inequality, is the same as being anti-business.  On the contrary, the City of London and similar, are the enemies of business.  They take finance out of the economy and are not democratically accountable for the finance they own.

How do we redress the balance?  Clearly, getting the right balance of accountable capital into the economy is important.  One simple thing would be to abolish fractional reserve banking.  This is where when banks make a loan, they do not have to match what they loan from their reserves.  In effect every time a bank makes a loan, it creates money.  This means the flow of money into the economy is not controlled by the state.  (The link connects to Positive Money, a campaign against fractional reserve banking.)

If banks had to match their loans to their reserves, this would reduce the impact of finance on the economy.  Whilst the volume of money in circulation would be reduced, so would inequality.

Of course, it is not as simple as that, it never is.  My main point today is to underline the interests of the wealthy  oppose the interests of local businesses.  Those who oppose capitalism do no good if they oppose local business.  The challenge is not to abolish capitalism so much as to find a capitalism that benefits everyone.

0 Postcapitalism: A Guide to Our Future

Whilst in some respects Paul Mason’s “Postcapitalism: A Guide to Our Future” is a good read, I found it disappointing.  I expected at some point to understand what Mason means by postcapitalism and whilst I understand why it is not possible to define it, the concept seems incomplete.

The argument is capitalism cannot adjust to the Internet age because the Internet makes production effectively free.  Work no longer has financial value.  People collaborate and create new things because they enjoy innovation.  But as soon as you create something, it can be duplicated for next to nothing by machines.  This applies to material as well as digital products; once machines are in place, production requires little contribution from human beings.

Exactly how this brave new world operates is naturally a mystery because it is still emerging and so we cannot fully discern its shape.  Capitalism has been around for about 200 years.  The earlier economic system, feudalism, lasted many centuries longer.  Inequality is a major issue today.  The market doesn’t work properly because 1% hoover up most of the resources.  Feudalism and its precursors do not seem to be any better.  Inequality was just as much a feature of the Roman Empire, itself a pattern for every dictatorship we’ve seen since.

It is hard to see how allowing a new paradigm to emerge, trusting it will be fairer than the one we have, is going to solve anything.

Resisting the Inevitable

Mason takes a lot of time explaining Marxist theory.  This is interesting and the best part of the book.  He describes how capitalism’s story is of long-term cycles.  Someone invents something, it opens up new possibilities and so the economy grows.  As more people take on the new development, returns fall and the economy moves into recession.  It seems the latest cycle has broken down; capitalism cannot resolve the current cycle created by the Internet.

Possibly this theory shows the struggles of the last century are the struggles of the proverbial bald men fighting over a comb.  It has never been a fight between capitalism and anti-capitalism (called communism, socialism or, bizarrely, liberalism (a more pro-capitalist ideology is hard to imagine)) but a fight between capitalisms.

The Soviet Union was not an alternative to capitalism but state capitalism.  China today is managing to be capitalist without the democratic trappings of the West.

In truth we can design our own capitalisms.  After all, the issue is not the value of capital but the ownership of capital.  When 1% of people own most of the capital you can expect the economy to be less healthy.  Demanding this should end is not demanding an end to capitalism.

One interesting point Mason makes is the working class in the UK did not follow the Soviet route but chose to reform capitalism.  One such route was trade unions.  Their approach to capitalism was so threatening to the wealthy that the Tories crushed them in the 1980s and still feel threatened by the feeble rump that remains.

Co-operation: an alternative?

Another approach, Mason hardly mentions, is co-operatives.  The co-operative movement was immensely diverse during its glory days and presented an alternative economy within the imperialist economy of the British Empire.  It was crushed during the 1980s too, to the extent most people no longer understand mutuality.

So, how about this vision of post-capitalism-as-we-know-it?  Run the corporations, big businesses and public services as mutuals to set the standard for the economy.  Smaller, local businesses can be mutuals but self-employed are able to set up smaller businesses.  This allows people the flexibility to experiment with new ideas at a local level.

In such a local economy, people still have money and property but a lot of what they own is part shares in mutual businesses.

The Internet

Mason claims the digital revolution is a main cause of the current recession and transition to some unknown future.  He actually writes little about the digital revolution and in that respect the book is a disappointment.  The problem is I can’t help asking whether he would hold to his analysis if he knew more about the digital revolution.

One obvious issue is the digital revolution works only when most people link to it and that costs money.  If the machines can open up something new, how does everyone take part?  It may be true that a lot online is free but it is free only once you have purchased the equipment and access to the Internet you need.

Who Decides How Technology Works?

The reason so much is free online is a decision taken by the people who invented the Internet.  Lanier in his book, “Who Owns the Future?” says the links we use are one way; they point to another page.  You cannot track back to the original page through the same link.  If they had chosen that option it would have been possible to track everyone’s contribution and they could have earned a share in any profit made through their contribution.

They made these early decisions for good reasons but the decisions that prevail are the ones that favour those with power.  The information you put on Facebook, for example, benefits Facebook’s owners. The Internet is an unparalleled opportunity to aid communication within and between communities.  We have hardly begun to explore its potential.  Our ancestors achieved unbelievable things through mutuals with limited transport (trains) and mass communications (newspapers and the telegraph).

What do you think?  Do we wait for Mason’s postcapitalist world and then decide whether we want it?  Or do we follow the example of the Rochdale Pioneers and shape the new world from within in our own way?

2 Reorientating Economics

In most debates about capitalism, it seems, no-one has a clue what it is they are talking about!  Capitalism has become a catch-all for the modern economy.  I heard two Conservatives debating capitalism on the radio the other morning.  Is capitalism essentially free enterprise?  Or does it also encompass the financial markets (a misnomer if ever there was one) and capital accumulation with no connection to production?

If small businesses are part of a capitalist economy, then so are co-operatives.    Mutuals hold wealth in common and some people do not believe this is really capitalism.  Their view is capitalism is about accumulation of personal wealth.

I have argued elsewhere that accumulation of wealth is the wrong priority.  Wealth needs to circulate and to measure its circulation is to measure the economy’s health.  How do we set about reorienting economics?

I’m not an economist and so one problem I have had is finding an economist who discusses these ideas.  Perhaps Roberto Mangabeira Unger, whom I mentioned in my post Approaches to Social Innovation a couple of weeks ago, is one such economist.  If you click on the link over his name it will take you to his Wikipedia page.

I make no apology for basing this post on a Wikipedia page; you are following the development of my thinking and this is as far as I’ve got with his contribution.  I intend to read some of his books and will review them later.  For now, if you want to follow these thoughts you can scroll down the Wikipedia page to Economic Thought and read on from there.

Today I shall highlight two insights from these paragraphs.  I’m sure I shall return to these themes in the future.

Classical and Marginalist Economics

Unger distinguishes these two approaches.  Classical economics focuses on social value and this means economics  has a vision for the future.  You can look at what’s happening and say, “We don’t like that so let’s change the way we do things.”

Marginalist economics began as a response to socialism and is the dominant approach today.  It is an empirical approach to economics, which claims to be more scientific because it measures things.  You can look at what’s happening and say, “It’s a pity things are that way but there’s nothing we can do about it because that’s what the statistics say.”

Unger seems to be saying there is something profoundly wrong with marginalist economics but I don’t think he is advocating a wholesale return to classical economic models.  So, what is his model?

Permanent Innovation

This is a massive generalisation but it seems to me Unger has thought through the implications of an economy based on permanent innovation.  There are, he argues, no real economic eras such as feudalism or capitalism.  These are rationalisation we impose upon history.  What actually happens is a struggle, as I see it, between those with a practical, innovatory approach who seek problems and solutions and those who have an absolutist, ideological approach who seek certainty and domination.

The former tends to be reformist and the latter revolutionary.  Looked at this way, we can see both approaches are potentially flawed.  The practical approach can lose sight of social values, whilst the ideological approach can stifle innovation, running after a false vision of what human society can be.

He advocates a revolutionary reformist approach, an approach designed to make politicians on both the left and the right worried!  This is exactly where I have found myself, advocating a national localised economy.  It looks reformist to the left and revolutionary to the right.  It is the approach most co-operative and trade-union movements took in the UK.  Compare their approach with the 1917 revolution in Russia.

How to Stimulate the Economy

I fully intend to return to Unger’s contribution in future posts.  In the meantime, I shall finish by listing three key policies he advocates.  They are all about encouraging innovation in the local economy:

The Wikipedia article hints that Unger’s work is worth exploration.  Leave a comment if you know his work or find what we know so far exciting (you’re allowed to be excited even if you don’t agree!)

0 Business and Society in Bed Together (Shock! Horror!)

I’ve read the New Statesman from cover to cover every week for decades. The only exception is their supplements; mostly they are not worth the effort and serve to publish dry-as-dust material that no-one would pay for.  Last week’s supplement, about business and society, was an exception and I went out of my way to read it. “Should Business Play a Role in Addressing Poverty in the UK?” can be found in the 23 – 29 October edition or you can download the pdf by clicking on the link.

The supplement is based on a report, supported by the Webb Memorial Trust, about the potential role of business in reducing UK poverty.

Just like most of these supplements, this makes sober reading and the very first sentence does not bode well. “Business and society are often portrayed as being unlikely bedfellows.”

What does this say about our society? How have we found ourselves in a place where the purpose of business is not seen as the benefit of society? The only other possibility is that the purpose of business is to enhance personal wealth and I fear that may not be far from the truth, not only in the public mind but also in the minds of many wealthy owners of corporate businesses.

The Poor Contribute More to Cashflow

It is worth referring to this blog post, “Why companies don’t just target the rich – because the poor have most of the cashflow”. This is a more polemical piece but the point it makes in the first graph is certainly true (although it isn’t referenced at the time of writing). The bottom 50% in society own almost no wealth but provide 30% of the cashflow. The top 10% own 70% of the wealth and contribute 20% to spending.

I argue in this blog, wealth is of no value to society if accumulated in bank accounts. It adds value when it circulates. It seems the poorest contribute proportionately more to circulating finance in the economy than the wealthy.

So, it is not business per se that is the problem. The problem is what happens to the wealth created by businesses. Distribute more of it to the poorest and there will be more cash flowing in the economy and more businesses benefit.

Excessive accumulation of wealth not only locks people into poverty but also makes business more difficult. The various scams described in the “Why Companies …” blog post would not be necessary if more money were circulating.

Private Sector Benefits from Tackling Poverty

Return to the New Statesman supplement and turn to page 7, where you will find a table listing how the private sector benefits when it tackles poverty:

Poverty it seems “with its associated physical, mental and emotional problems, contributes to reduced productivity.” I’m sure that’s right but the point is inequality also contributes to poor business prospects by reducing the money in circulation. Poor circulation will affect productivity too because it means it is harder to meet costs.

Reputation suffers because businesses resort to scams as described in the “Why Companies …” blog post.

New opportunities implies the challenging financial climate opens up new business opportunities and revenue streams. Really? I understand the argument, for example climate change could mean more jobs for businesses installing renewable energy sources or insulation.

But the main blockage, true since the recession in 2008, is there is too little money in circulation. You can’t get a loan to finance your business ideas.

In the end, the supplement demonstrates the poverty of thinking endemic among the political classes. It’s not that poor people’s stress affects productivity so much as the inequalities that make them poor in the first place. If our political leaders do not understand this, what chance have we of a fairer society?

Business and society are natural bedfellows, it is our blindness to the impact of globalisation and the corporate élite that both increases poverty and reduces productivity.

1 Approaches to Social Innovation

Today’s topic is an article by Geoff Mulgan in the 16-22 October 2015 edition of the New Statesman, “Trotsky, Blair and the new politics“.  (You may find it helpful to read the article first; it will open in a new tab.)  Mulgan does not dwell on either Trotsky or Blair; he tells his own story and raises a number of issues.

Sadly, the article is another dig at Jeremy Corbyn.  The New Statesman does not support his leadership and has found it difficult to find a constructive response.  This article might be their most positive approach so far.  It begins by arguing Corbyn’s leadership “could help the Labour Party rediscover its purpose”.  At the end Mulgan suggests the party may have turned down a cul-de-sac.

To a degree, I share this ambivalence.  As a Green, I depart from Corbyn’s approach to the environment, the economy and democracy (voting systems).  Nevertheless, I welcome his promotion to leadership because politicians have become too complacent. It is possible his leadership will open up new possibilities.  It’s a pity the New Statesman can’t offer constructive ideas about how the Labour Party could develop in the future. Instead it laments the loss of the election in 2020.

Mulgan’s career took him from the hard left to working closely with Tony Blair.  He learned to see the difference between the divisive and largely theoretical leftism of the various Trotskyist groups and the need for good management and administration.  He understood the implications of digital technology in the late twentieth century and argued for “networks and different ways of organising the state”.  This contrasts with the top-down arguments for nationalisation and planning from the hard left.

He contrasts political protest movements with the use of political power to cut poverty and rebuild public services.  A significant problem on the left, is a tendency to overemphasise the former at the expense of the latter.  Is it better to emphasise management? The ideal is perhaps credible politicians energised by a strong movement.  Without such a movement the party is solely concerned about winning elections and not about what to do once they have power.

The problem for many on the left is they do not recognise entrepreneurship and innovation.  This does not derive from committees but from people experimenting on the ground.  I have written about the innovation that accompanied the growth of the retail co-operative movement.

Minimalist and Maximalist Social Innovation

Mulgan cites the work of a Brazilian thinker, Roberto Mangabeira Unger, who in a new book, New Frontiers in Social Innovation Research (Palgrave MacMillan) distinguishes minimalist and maximalist social innovation.  Mulgan writes

“The minimalist view puts social innovations squarely within the third sector and: ‘Its resonance is with solidarity and communitarianism … within the tradition within classical liberalism that prizes voluntary associations as well as with the strand within socialist thinking that proposes a non-statist socialism.’

“By contrast, the maximalist view, Unger writes, is concerned with ‘the whole of society, of its institutional arrangements and of its dominant forms of consciousness … At its maximalist best, the social innovation movement [undertakes] the small initiatives that have the greatest potential to foreshadow, by persuasive example, the transformation of those arrangements and of that consciousness.'” (All ellipses and additions are Mulgan’s.)

I have argued, for example in my ebook “Community Development is Dead!” (see below) that community development is weak when tied into the third sector.  Local businesses are at best ignored.  Even social enterprises, whilst often similar to small and medium businesses, are designed over and against mainstream local businesses.

Innovation and the Third Sector

Mulgan and Unger are not arguing against social enterprises, so much as underlining the fact that social innovation can happen anywhere through the work and the risks taken by just about anybody.  It is not right to restrict social innovation to the third sector.  There are two reasons for that.

Third sector organisations can be just as moribund as public sector and large private sector organisations.  The third sector draws many people with alternative values and so if you’re looking for the entrepreneurial spirit, for social innovation, it is one place to look.  But large voluntary sector organisations can become just as ossified as other organisations of comparable size and age and even smaller groups just as readily opt for bureaucratic solutions.

The second reason is that a lot of social innovation does happen in the private sector, particularly in the local economy.  For many, their starting place may be different but their destination closely parallels that of social entrepreneurs.

The fact is neither of the main political parties has ever favoured local business or social innovation.  Both favour top-down, corporate planning solutions.  Their policies always seem to be about concentrating wealth and power in fewer hands.

This is the political change we need.  Neither main party embodies this approach, although Mulgan suggests, bizarrely, David Cameron’s Big Society is closest.  Corbyn has broken the mould but I do not as yet see any evidence his economic policies are close to understanding social innovation.

Still, whilst things are chaotic, we cannot be sure how things will pan out.  It will be interesting to see how the debate develops over the coming months, now that Labour has jettisoned the ridiculous idea it needs to win the next election.