Neoliberalism – the set of economic ideas and policies that have dominated politics for the past 40 years – is rapidly losing legitimacy in the face of multiple crises: stagnant or falling living standards, sharply rising inequality of income and wealth, financial fragility and environmental breakdown. At this critical juncture, new ideas about the kind of society we want to live in, and the future we want to see, are needed more than ever.

‘New Thinking for the British Economy’ brings together leading thinkers to outline the broad pillars of a new economic agenda, and the type of policies that are needed to get us there. As well as more traditional policy areas such as trade, finance, housing and industrial policy, the book explores a range of areas that are not typically considered to be within the sphere of economic policy but which nonetheless play a critical role shaping our political economy – such as the media, our care systems, racial inequalities and our constitutional arrangements.

Contributors include Adam Ramsay, Andrew Cumbers, Ann Pettifor, Christine Berry, Craig Berry, Dan Hind, Johnna Montgomerie, Katherine Trebeck, Laurie Laybourn Langton, Laurie Macfarlane, Mathew Lawrence, Maya Goodfellow, Ruth Bergan, Susan Himmelweit, Thomas Hanna, Tom
Mills and Will Stronge.

Download the eBook for free – or purchase hard copies for events and reading groups

The eBook version of New Thinking for the British Economy can be downloaded for free here, or viewed in the embedded viewer below. Printed versions of each chapter are also available for £1 via Commonwealth Publishing and the Democracy Collaborative. If you would like to order physical copies, and inquire about organising author events, please contact Dan Hind or visit the Commonwealth Publishing website – www.commonwealth-publishing.com

New Thinking for the British Economy has been produced with generous support from the Friends Provident Foundation. All the authors have contributed to this volume in a personal capacity and do not necessarily endorse all the views expressed within it.

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The lost decade?

A decade on from the Global Financial Crisis (GFC), now is the time for serious reflection on where we are, how we got here and what future lies before us. In the aftermath of the 2008 crisis, finance-driven capitalism appeared to be on a precipice. The collapse of leading global financial institutions in the US and UK led to a free fall in global markets, followed by the European Sovereign Debt crisis. It all seemed to herald the end of unfettered financial expansion. Indeed, many believed 2008 was another 1929 moment – a systemic crisis would bring about a New Deal style recovery and a Bretton Woods agreement for the 21^st century to establish clear parameters for a stable global financial system. A decade later the outcome is far different: finance capitalism has never had it so good.

The initial bailouts, deemed necessary to keep the financial system afloat, were followed by drastic reductions in interest rates that have yet to return to pre-crisis levels. Risk guarantees offered by Central Banks and Treasury Departments across the globe were committed to providing the money (liquidity) necessary to maintain the stability the global financial system. This was followed by asset buy-back schemes and long-term refinance operations which became systematised into successive rounds of Quantitative Easing (QE). Technocratic speak refers to the last decade, euphemistically, as the ‘era of unconventional monetary policy’, or the biggest ever helicopter money drop onto the financial sector in living memory. Those who believed 2008 could have been a reckoning for the failures of finance-driven growth could not be more disappointed. The financial sector is more entrenched than before the crisis, and the political power of finance to control the public policy agenda stronger than ever.

Looking to the future and seeing much of the same

Looking back over the past decade, even achieving an economic ‘recovery’ took longer than the Great Depression. The promises of a rebalancing of growth across Great Britain, well-funded health and education services, and prosperity for 95% that did not benefit from QE, never materialised. The failures of austerity are plain for all to see: the economy is stagnant and most people are worse off now than a decade ago.

Our shared economic future only promises more austerity. Wages and incomes will continue to stagnate. The economy will be still dependent on private debt to fuel asset bubbles and ever more household debt will be needed to sustain meagre economic growth. With the economy in the doldrums and Brexit looming on the horizon, we face entrenched economic malaise or another severe financial crisis. When growth is forecast over the medium term, it is always revised downward. To put it simply, no one is predicting that the UK’s economic future will get any better.

Making another future possible: we need an alternative policy agenda

In the face of peril, we cannot lapse into fatalism. We need to break out of the perpetual loop of anti-austerity, which points to the real failures of the austerity policy agenda without clarity on viable alternatives. The Progressive Economy Forum (PEF) seeks to dispel the myths and lies of austerity economics and replace that pernicious ideology with a progressive macroeconomic vision and narrative that makes another future possible.

The aim is to develop a 21st century Keynesian policy platform, that will end today’s austerity just as Keynes’s ideas in practice helped end the Great Depression and usher in a generation of economic stability and prosperity.  In his pioneering work, The General Theory of Employment Interest and Money (page 383), Keynes famously wrote:

“Practical [people] who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”

Today, the global economy is gripped by these same “madmen in authority” that bring us austerity. The current “voices in the air” come from economists who are very much alive and whose scribbling continues unabashedly. In response, we must begin mapping out a new direction, to forge a different path that leads to a better future.

100 policies to end austerity: a call for interventions

The goal of PEF is to build a policy platform that will end austerity in a way that embraces the progressive values of equality, dynamism and sustainability. In line with openDemocracy’s New Thinking for the British Economy agenda, our aim is to cultivate a rich garden of new ideas, policies and plans to end austerity by forging a new path. Our bold plan is to curate 100 Policies to End Austerity as a starting point for a better future. We will bring together contributions from economists and policy experts that articulate clear proposals for a progressive, sustainable and equitable British economy for the 21^st century. This is the start of an interactive conversation, not a definitive policy platform, about a vision of a better future.

In practice this means debating the key ideas that inform public policy, like monetary, fiscal and taxation policy needed to end austerity. In addition, it requires addressing the problems created by austerity. For example, creating an investment bank, green jobs, affordable housing, a fully-funded NHS and education system, compassionate care for an ageing population, a secure social security system, better local authority services and regional development. The list of ways to end the harm caused by austerity goes on. The challenge for progressives is to create a policy agenda that can foster a better future for everyone.

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Britain’s economic model is broken and needs to be radically overhauled. In 2018, this is not a controversial statement. But when the messenger is one of the UK’s most influential think tanks, backed up by voices as diverse as the Archbishop of Canterbury, the Global Managing Partner of McKinsey and Company, and the General Secretary of the Trades Union Congress, it certainly means something.

Today the Institute for Public Policy Research (IPPR) published the final report of its Commission on Economic Justice (CEJ) – Prosperity and Justice: A Plan for the New Economy. The report is the product of a two year long work programme, led by Director Michael Jacobs and supported by a crack team of policy wonks: Mathew Lawrence, Grace Blakely, Laurie Laybourn Langton, Catherine Colebrook, Carys Roberts, Lesley Rankin and Alfie Stirling.

Throwing their weight behind the report are 21 Commissioners from the world of business, policy and academia. Although it is made clear that the Commissioners do not support every single recommendation, the fact that they all support the “broad thrust” of the report is significant.

Prosperity and Justice begins with an astute diagnosis of where contemporary British capitalism has gone wrong, building on the findings of the interim report published a year ago: an over-reliance on household debt and rising property prices; a large current account deficit; stagnant productivity and low wages; a financial sector that serves itself rather the real economy; a corporate sector plagued by short-termism; and a highly unequal distribution of income and wealth. This economic model is broken, and as with previous episodes of socio-economic breakdown, it must be replaced.

The report structures its key recommendations for a “new economic settlement” around ten policy areas. Among these are new mechanisms to raise the level of public investment (including reference to my own work on state investment banks with Professor Mariana Mazzucato, who was one of the Commissioners), a new industrial strategy, stronger collective bargaining powers, higher minimum wages, worker representation on company boards, greater control over the financial system, and a more progressive tax system.

But much to its credit, Prosperity and Justice goes beyond reheated social democracy. It offers fresh thinking on a range of policy areas, much of which stems from the consistently excellent output from the CEJ team over the past two years (work which we have featured regularly on this site). Proposals such as commencing a process of ‘managed automation’ to accelerate the diffusion of productivity enhancing technologies across the economy; a new ‘Office of Digital Platforms’ to regulate the major digital platforms like public utilities; and the creation of a ‘digital commons’ to organise and curate public data, show an acute understanding of the forces shaping our future.

Perhaps most significantly, Prosperity and Justice has put the issue of ownership back into the limelight. New models of ownership are central to the report’s overarching goal of rebalancing inequalities of power and reward. A new Citizens’ wealth fund would transform private and corporate wealth into shared public wealth and pay a ‘universal minimum inheritance’ of £10,000 to all 25-year-olds, while new legal and tax incentives would encourage employee ownership trusts and co-operative and mutual businesses. Taken together, these proposals represent a significant step towards democratising the ownership of capital – a radical ambition from what was once described as “Tony Blair’s favourite think tank”.

Last but not least, environmental sustainability is treated as a binding constraint, not a vague ambition. A new Sustainable Economy Act would require on government to set environmental limits in law, and to produce economy-wide plans to achieve them.

Prosperity and Justice is not a final blueprint, and neither was it intended to be. There is hardly any mention of welfare policy or trade policy, for example, and in some areas there is scope for bolder thinking. But taken as a whole, the report is an impressive attempt at setting out a credible alternative to the failures of neoliberal capitalism.

For this the IPPR should be commended. At a time of political upheaval and environmental collapse, we need bold and ambitious ideas more than ever. But too many of our think tanks – and most of our media – have failed engage in this debate, or even acknowledge the scale of the challenges we face.

That’s why at openDemocracy, we have been collaborating with the IPPR and others from across civil society to get to grips with the long running economic crisis unfolding in Britain, and promote discussion and debate on alternatives.

Prosperity and Justice has set a high benchmark. The task now is to challenge, critique and expand its offering, and to build the infrastructure that is needed to turn ideas into reality.

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Ten years ago I spent the summer after graduating waitressing in Cafe Uno in Cambridge. The most political campaign for me that summer was the fact that I was getting paid below minimum wage because they could top up my salary with tips. At the same time, the western world was on the verge of financial collapse that would not only change the course of my future work, but also deliver such a shock to the world order that nothing would ever be the same again.

So what has changed in ten years? I’m guilty of banging the angry drum that nothing has changed, and saying that finance is still totally self-serving. In absolute terms, this is true. The vast majority of new loans continue to pour into financial and property markets, and this hasn’t really changed since the crash. Lending to the productive economy, including SMEs, has not grown. It was the failure to reform the financial sector, and the vacuum of conversation about what must be done, that allowed the conversation to morph into the need for austerity, which was of course completely untrue.

But looking under the bonnet of the headline figures about our stagnating economy, rising food bank use and record high stock prices, there is some good news. We are building an army of voices who didn’t exist ten years ago. The public know that things are not fixed. Today we at Positive Money have released a poll showing 66% don’t think banks work in their interests, and 63% are worried about another crash. The conversation is changing.

Here are ten things that have changed over the past ten years, including some huge achievements, that should be cause for hope and celebration.

1. Occupy captured the public’s imagination

The Occupy movement struck a chord with many of us. It said that the system is unfair and broken, and we need something new. People camped outside St Paul’s, and there were book groups, workshops and lots of other activity that encouraged people to wake up and realise that we need something new. Importantly, it repeatedly made the news, and memes like ‘the 99%’ stuck and exploded across the world. The challenge of Occupy was always going to be ‘how do we take its passion, voice, energy, and impact and channel it into a self-sustaining movement?’. And now, in the years after Occupy, do we avoid saying the inevitable ‘we need another occupy’ whenever a meeting full of activists and campaigners get together?

2. A civil society movement exists

We now have an ecosystem of institutions, campaigners, organisers, thought leaders, and economists focused on reforming the banking and finance sector, and its growth is accelerating. Organisations that were set up before the crash, like Robin Hood Tax and Share Action, have grown in size, profile and impact. New organisations like my own, Positive Money, as well as the Finance Innovation Lab and Finance Watch have established themselves as key NGOs with expertise. Larger NGOs like Oxfam, Friends of the Earth, and WWF have allocated resources towards recruiting people dedicated to looking at the finance sector. Think tanks started work on finance and banking. The New Economics Foundation set up a banking and finance team and have done an awesome amount of research on issues ranging from financial system system resilience to stakeholder banks. IPPR, Demos, and Respublica have all looked at alternative banking models. Work focusing on how people at the sharp end of the finance sector are affected, such as from Responsible Finance and Toynbee Hall, continues to grow. Unions are finding their voice in criticising the financial sector. A coalition of organisations are organising a large event to mark ten years after the crash, which will be taking place on 15th September.

3. Women are leading the movement

Anna Laycock heads up Finance Innovation Lab, Catherine Howarth leads Share Action, Maeve Cohen is the Director of Rethinking Economics, Miatta Fianbullah leads the New Economics Foundation, Faiza Shaheen is the Director of CLASS, Sarah-Jayne Clifton heads up Jubilee Campaign, Jennifer Tankard is the Chief Executive of Responsible Finance, Sian Williams is the Director of Policy at Toynbee Hall, Grace Blakeley at IPPR has been doing some fantastic work on Financialisation and Tax, and the brilliant Christine Berry has been doing excellent work across the movement. This is a fantastic development, which is not totally unconnected to the next point.

4. There is a culture of collaboration and systems thinking

Civil society has always been victim to a human characteristic prevalent in modern society – competition. Starting essentially a new sector and movement, we knew we had to do things differently. Finance and civil society is clearly a David and Goliath situation. If we spend time competing with each other, we won’t be able to move fast enough. That’s why when I joined Positive Money at the end of 2012 I wanted to work with the movement and create a culture of support. So I partnered with Charlotte Millar and Chris Hewett, both then at the Finance Lab (which was set up by three amazing women and a great man) to set up the transforming finance network. An important aspect of creating this collaborative culture was that we have several ‘systems thinkers’ amongst us. Systems thinkers are able to hold uncertainty, hold tensions, have humility, and can adapt, innovate, and most importantly evolve. Donella Meadows’ paper ‘leverage points’ was a key text for us. Systems change attitudes results in less ‘my policy is bigger or better than yours’, and more ‘how can we work together to move our common agenda forward?’

5. The rethinking economics movement is growing strongly too

The crash also triggered a shaking up of the economics establishment. A close relative of the financial reform movement is the rethinking economics movement. As well as fantastic student and university focused organisations like Rethinking Economics, there is a growing number of thinkers writing about how we need to ditch neoclassical economics and be more pluralist in our approach. Even new institutes are being set up such as Mariana Mazzucato’s Institute for Innovation and Public Purpose at UCL.

6. The tax justice movement seized the opportunity to make gains

The shock of the crash, followed by hijacking of the narrative by austerity, presented an opportunity for the tax justice movement. In the UK we saw the flourishing of direct action groups like UKUncut and tax experts like John Christensen and Richard Murphy. Large NGOs also got on board, which allowed it to cut through the public consciousness. This hard work meant that even David Cameron picked up the baton to ensure tax avoidance was clamped down on. A key reason for the success of the tax justice movement was having some key bits of infrastructure in place before the crash, including experts, grassroots activists and large NGOs working on it.

7. More must be done to reform regulation 

It would be remiss to write about the last ten years without saying something about what has happened in the world of regulation. Whenever I go on panels to talk about regulation I generally complain about how regulation is a mess. It’s a tricky point of view, because obviously as civil society we all want banks to have greater regulation, but is more regulation good if the premise on which its developed is based on problematic first principles? For example, ring fencing will be in place by January 2019, but it has always been about a false logic that retail banking is safe, while investment banking is the risky side. But the 2007/8 crisis emanated from the retail arm in the first place, so ring fencing wouldn’t stop another crash. Basel III looks at risk-weighting of assets which categorises lending into the productive (or real) economy as high-risk, whilst mortgages are low risk, even though it was mortgage lending that was a key factor in causing the crash

8. The Bank of England is now a risk manager

After the crash the Treasury took positive steps to add financial stability to the Bank of England’s mandate. The Bank now understands that to predict a crash it must look at the system as a whole, rather than just individual banks balance sheets. Its regulatory approach since the crash has been focused on how to ensure a bank can fail without bringing down the whole system, and as such they have been looking at bank bail-in regimes. While it is an important step forward, it doesn’t go far enough to meet the Bank’s mission which is ‘to serve the good of the people of the UK’. If it was to take its mission seriously, it would look at how banking is failing to serve our domestic economy, and how monetary policy has nothing to offer in the event of another crash. Similar to regulation, this approach can be thought of like a ship sailing off a cliff and crashing, and then continuing in the same direction to sail off another cliff, but along the way making sure there is less mess this time. We might be calculating the risk of sailing off the next cliff in a more complex and rigorous way, but we are not thinking about changing direction.

9. Building the new

Buckminster Fuller famously said that ‘to change something, build a new model that makes the existing model obsolete.’ Several leaders from civil society’s financial reform movement are now also building the new. Tony Greenham, formerly Director of Banking and Finance at NEF, co-author of ‘Where Does Money Come From?’ and more recently Director of Economics at RSA, is now working full time on developing new co-operative banks in the South-West and London. The Finance Innovation Lab runs a Fellowship developing the leadership capacity and business skills of innovators building a new financial system – one that works for people and planet. Alongside Finance Watch, the Finance Innovation Lab is also sounding the alarm about fintech – which is not all cute and cuddly. We’ve also seen more interest in credit unions, as well as complementary currencies popping up, such as the Bristol Pound.

10. Changing the old

The story of RBS is probably the best example of the challenges associated with changing the old, and of the strong inertia inside the government and regulators. As a result of the emergency bail-out package in October 2008, the British public acquired a majority shareholding in RBS (almost 80%) at a total cost of £45.5 billion. Among the many examples of how RBS fails to serve the UK economy, including consumers and businesses alike, probably the worst is the Global Restructuring Group (GRG). It was found to be deliberately pushing SMEs towards insolvency in order to shore up RBS’ own capital position, in some cases then buying up their assets cheaply. Despite economists, campaigners, and researchers continuing to call on the government to think of alternatives for RBS, namely turning it into a network of regional banks, the government is fixed on selling it back to the private sector at a loss to the public.

Where do we go next?

We must continue to work together by forming alliances and coalitions, increasing our expertise and skills, and building new infrastructure for the movement. We must appreciate our different tactics and theories of change, and tackle different parts of the system at the same time. We must bring down the old, while also building the new. We must challenge the neoclassical thinking that underpins the status quo, while also developing new policy prescriptions that can be implemented now. To do all this successfully at the same time, we need more people.

Brexit means finance is at a crossroads

The government, the City, Mark Carney and the Bank of England all want our financial services sector to be our ‘engine of growth’. Carney said he wants to see it double in size over the next ten years. We know that the bigger our finance sector is, the more detached it is from our domestic economy, and the more detached it is from real people, jobs, work and investment. What 2008 should have shown is that we can’t have it both ways. We can’t have a bloated financial sector in the City of London serving itself and global financial markets, because it will always undermine the kind of economy we are trying to build for most people here in the UK. As Michael Hudson’s book aptly puts it, the finance sector is ‘killing the host’.

The stakes are high, but if the last ten years have taught us anything, it is that if we aren’t in the game, we definitely can’t change things. So let’s get stuck in.

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I’ve written previously about the role played by media amnesia in the decade of austerity and general doom we’ve found ourselves in since the 2008 financial crisis. Briefly, after the banking collapse, private debt became public debt as governments saved their banking sectors and the credit crunch led to a deep recession. Concurrently, a dazzling rewrite of the crisis was also taking place in the mainstream media – at the same time that the debt was being transferred from the private to the public sector, so too was the blame being transferred. Public sector waste and Labour overspending became the culprits behind the deficit, as the real reasons for the crisis were forgotten or misremembered. This shifting of blame onto the public sector was a key justification for austerity.

I’ve also written elsewhere about the causes of this media amnesia – from the concentration of media ownership and the crisis in journalism funding, to the ‘Westminster bubble’ and elitism, to news values that prioritise the very latest happenings over context and process.

In this piece, I’d like to put forward some potential remedies for media amnesia. How can we solve the problems with media that have had such serious consequences for the way we have all lived our lives for the past ten years?

Regulation

There are some simple, modest things we can push our government to do about the media. Pressing ahead with part two of the Leveson inquiry, and properly implementing the recommendations of part one, are clear examples. Media activists and some journalists have called for a strengthening of regulation around the right to privacy, the right to reply, the publication of corrections and the process of lodging complaints against media companies. These proposals aim to protect members of the public from having their privacy violated or from being misrepresented in the media. Another demand concerns the transparency of media policy – particularly contacts between senior government officials and media owners or executives. Justin Schlosberg recommends that details of these kinds of interactions should be published on a central register, made available in spreadsheet format and updated at regular intervals. Yet another proposal is to implement plurality safeguards that protect the editorial autonomy of journalists and editors from interference by management, owners or external sources.

Meanwhile, the BBC and public service journalism should be protected and also reformed. The Media Reform Coalition has a proposal for how to make the BBC more independent, democratic and representative. In these ways, selective amnesia, misremembering or all-out blackouts could be curtailed.

Alternative media

What with the proliferation of voices now on offer thanks to the interwebs, we are free to seek out media that we trust and find informative. Supporting your favourite alternative media through sharing, subscribing, donating, or just using, is central to creating a healthier media environment. The recent success of Jeremy Corbyn’s Labour Party at the 2017 general election (well, relative success) has been in part put down to social and alternative media. I would recommend particularly supporting alternative media that are collectively owned and run – that prefigure the kinds of ownership models on which we might hope a future economy will be based.

We also need to start asking ourselves questions about what we actually want from news. Why do we need to frantically keep up with everything reported? Would we rather have less news but better context? Instead of a tsunami of information about certain goings on in certain places, would we prefer to learn about the processes connecting different parts of the world together? The slow news movement, for example, tries to offer less quantity but more quality of news. Understanding how the present connects to the past, and how geographical regions connect to each other through the global economy and geopolitics, are key to beating media amnesia.

Public journalism

There are two problems, though, with focusing only on alternative media. Firstly, alternative media by definition reach a lot fewer people than mainstream media. If we want a more level playing field in public debate, we need to get involved in discussions about the media ecology as a whole – not confine ourselves to just one part of it. Secondly, alternative media often reach us via the mega corporations that have taken over cyberspace. The internet giants like Google and Facebook are part of the problem at the heart of both the 2008 financial crisis and its amnesiac reporting – the consolidation of resources in the hands of a few. It is therefore essential to target ownership structures, and reorganise our media from the bottom up.

Caps could be placed on the share of the market for content provision controlled by individuals or groups, with violations of the threshold remedied through forced divestment if necessary or through shareholder dilution. Tackling the media barons and breaking up media oligopolies is vital if we are to put an end to deliberate amnesia and misremembering in the interests of the uber rich.

At the same time, non-corporate media could be supported through an independently dispersed public fund. The fund could be used to support a whole plurality of media with a public service interest. As well as supporting the production of content, it could facilitate civil society-run social media and community open access and media infrastructure initiatives. Where is the magic money tree to pay for such a fund? Taxes on the mega media corporations of course, who are notorious tax avoiders. There are all kinds of proposals for these kinds of funds and how to pay for them. The crucial thing about them is that a) they aim to achieve media that are independent from both the state and from corporations. And b) that they are funded through progressive taxation.

There have been more ambitious proposals. Back in the 1960s, the late cultural studies scholar Raymond Williams argued that the means of mass communication should be owned by media workers. In this scenario, small scale equipment would belong to media producers themselves. Large scale media infrastructure would be taken into public trusts, and content-producing organisations could make use of it. More recently, Dan Hind proposed the idea of public commissioning. Again, a fund would be set up and members of the public could vote on what investigations they want journalists to do and how to disseminate the results. This would sit alongside the existing media system, but eventually as people got more used to being autonomous it could be expanded. In this way, plurality would be safeguarded and the media would become more democratic – making media amnesia a thing of the (forgotten) past.

Obviously, these bolder solutions are about a million miles away for where we are now. For now, we should celebrate if we manage to prevent the Murdochs from taking over Sky. But it’s important to consider a whole range of options and to think about what kind of media we actually want, not just about what’s ‘realistic’. Who knows, in developing visions for the kinds of media systems (and other societal systems) we want, we could change the parameters of what is considered ‘realistic’ in the first place.

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A review of ‘Media Amnesia: Rewriting the Economic Crisis’ by Laura Basu

Mark Blyth described it as the greatest bait and switch in history. Just a year after the financial crisis everyone was talking about the government’s deficit. Why did the media seem to effortlessly move from one story to another without apparently looking for any connection between the two? That question is at the centre of a new book by Laura Basu entitled ‘Media Amnesia’.

The book has a wide range, looking at media coverage of the Global Financial Crisis (GFC), the subsequent recession, austerity and the Eurozone crisis. The author uses her own research and that of others to examine how the different parts of the mainstream media (MSM) attempted to report and frame these events. There is increasing evidence that the media can have a profound influence on voters and therefore politicians. Although nowadays social media might get more attention, the traditional MSM remains the main source of news, and even in social media MSM brands dominate.

Although the author describes inadequacies in the coverage of the financial crisis in some detail, she herself says that these problems were as nothing compared to what happened under austerity. Furthermore in the UK what she calls hysterical coverage of rising government deficit began while the Labour government was still in power, in April 2009. Before then there had been a theme of Labour ‘overspending’ in the Tory press, and others had speculated that bank bailouts might put pressure on the public finances, but this discussion did not become centre stage until the Budget of 2009.

That Budget showed the full extent of the recession’s impact on the public finances. Budget deficits always increase during a recession, and as the recession following the global financial crisis was the largest since the Great Depression in the 1930s the deficit unsurprisingly rose more rapidly than it had done in previous recessions  In addition, the Labour government had quite rightly added to the deficit in the short term in order to apply a fiscal stimulus to the economy. Monetary policy had run out of steam with interest rates at their lower bound and Quantitative Easing a completely untried policy instrument. For all these reasons the majority of economists were reasonably relaxed about the rising deficit. It was what was required to end the recession and start a recovery.

The media told a different story. Words like ‘horrific’ and ‘frightening’ were used to describe the deficit. In part this was because George Osborne had opposed the short term stimulus and had started to focus on the deficit and linking it to Labour ‘overspending’. But this is not enough to explain why the balance obsessed broadcast media took up the same tune. In my view it had a lot to do with the decade or so before the crisis. Journalists, helped by the IFS, had got into the routine of focusing on deficit projections at each budget event, and speculating on what it meant for government spending on taxes. They did this partly because the Bank of England was taking care of the job of stabilising the economy, but also because the analogy between the government’s accounts and a household was easy to make.

The Treasury had estimated that some of the decline in UK GDP following the GFC was permanent, producing what is called a structural deficit even when the economy had fully recovered. They had persuaded Labour Chancellor Alistair Darling that some fiscal savings would be required after the short terms stimulus. When the UK Treasury and then the IFS revealed this in the April 2009 budget, the media behaved as they would have behaved before the GFC, except at greater volume because the numbers were bigger. The media amnesia came in not understanding that a consequence of the GFC was that budgets were now about helping the recovery, and the household analogy was now wildly inappropriate.

From that point on things went from bad to worse in terms of media coverage, like a tragic game of Chinese whispers. The author describes how the phrase ‘Labour’s decade of debt’, originally used by Osborne about private debt, morphed into being about public debt. The right wing press began to frame the bank bailouts as fiscal irresponsibility. As academic Mike Berry found in focus groups, 70% of respondents thought that increased public spending had caused the deficit. In reality, the structural budget deficit before the GFC was trivial compared to the impact of the GFC. Thus the media completely misinformed the public in a highly political way.

The broadcast media also began to play up how budgets had to please the markets as well as voters, giving credence to the (largely false) idea that if deficits were too high interest rates would rise. Parallels with Greece were just too easy to make, even though they were largely invalid. In my view a major problem here is that economic journalists working for broadcasters become dependent on City economists for instant ‘analysis’ of short term market moves, and City economists are naturally pro-austerity and also overstate the importance and volatility of markets. The amnesia runs deep here, relying on ‘experts’ from the institutions that had brought the economy to its knees in the GFC.

What I found extraordinary, as a macroeconomist at Oxford working on fiscal policy, was that the view of most macroeconomists was almost completely absent from the media. BBC reporters saw it as their job to reflect the opinions of politicians, and that to bring in other information (like the view of experts) would be, according to one former senior editor quoted in the book, ‘doing the opposition’s job for them’, and would therefore be a breach of impartiality. This is classic ‘shape of the earth:views differ’ stuff, and miles away from the BBC’s mission to inform and explain.

The consequence was that austerity was increasingly seen as common sense in the media, even though it the complete opposite of what every economics student around the world is taught, and was very different from how governments had behaved in previous recessions since the 1930s. As a result, we had after the GFC the slowest recovery in the UK for at least a century. What is more this media coverage led the majority of the public not only to believe austerity was necessary, but to also see imagined Labour government profligacy rather than the GFC as responsible for it. This was why just before the 2015 elections polls showed the Conservatives ahead on the economy, despite the slow recovery and an unprecedented decline in real wages. In my view this in turn led Labour politicians to shy away from attacking austerity, or even to embrace it, which was a big factor behind Jeremy Corbyn’s victory.

As the book’s title suggests, Basu does not regard this particular case of forgetting as unusual. Instead she describes how well known changes to how the media industry works, like 24 hour news and reduced resources from advertising, gives journalists just enough time to react, and little time to tell any kind of story. We have information overload with ever fewer journalists to process it. This makes them much more dependent on the PR industry and lines that come from a government’s spin doctor. Journalism becomes ‘churnalism’.

Which is a shame, because the public remember stories better than a succession of facts without context, and they want journalists to separate facts from spin. More and more journalism privileges events over process and causes. It also means that journalists become more dependent on what Stuart Hall calls primary providers, allowing these providers to frame news events. In the final part of the book the author presents an interesting discussion of how the various problems with the media identified in the book can be remedied. This book is required reading for anyone who wants to understand the key role of the media in shaping events in the UK after the GFC.

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Remember when the banks created the mac daddy of economic crashes? Back in 2008, you would have had plenty of company if you thought the end was neigh for the economic model producing that crisis. You would have been mistaken. In the UK, the political consensus around this model is only now beginning to be questioned, after Brexit, the tragedy of Grenfell and the Carillion and Capital scandals. How was it maintained through a decade of crisis?

There are many factors, not least the grip of corporations on politics – power that intensified rather than receding after the 2008 financial collapse. The mainstream media have also played a major role, one that shouldn’t be underestimated. In particular, media have suffered from an acute amnesia about the causes of the crisis. As it morphed from a banking meltdown to a public debt crisis, blame shifted from greedy bankers and free market ‘casino capitalism’ onto public sectors, immigrants and people who didn’t have much money. This forgetting and misremembering helped make austerity, privatisation and corporate tax breaks seem like common sense responses to the problems. Understanding media amnesia is therefore vital if we are to find a way out of the neoliberal groundhog day in which it has trapped us. With that in mind, here are five factors causing media amnesia.

1. Media barons

It probably won’t come as a shock that British media is controlled by a handful of media barons and corporations. Three firms control 71 per cent of national newspaper circulation and five companies command 81 per cent of local newspaper titles. Rupert Murdoch’s media empire is probably the most notorious, and is currently trying to take full control of Sky plc. Social media may have led to a proliferation of voices online, but the mainstream brands still dominate the online news space. And don’t forget that the new gatekeepers to news like Google and Facebook are themselves giant corporations.

2. Political partisanship

With journalism in the hands of media barons, it is hardly surprising that the mainstream news landscape is skewed to the right. Whether proprietors intervene directly, whether they hire editors whose values reflect their own, or whether journalists censor themselves to fit in with the culture of their title, make no mistake: content will more than likely reflect the interests of proprietors. The right-wing press deliberately manufactured amnesia about the causes of the crisis to bash Labour and back the Tories, and to promote austerity, the shrinking of the social state and the passing of resources from the public to the private sector.

The liberal sections of the press may not have manufactured media amnesia deliberately, but they often reproduced it passively. Because they backed Labour or the Lib Dems during elections, they often ‘retweeted’ the narratives of these parties, especially close to election times. It wasn’t in the interests of either of these parties to dwell on the role of financialisation or corporate capitalism in causing the problems, as no party had any intention of tackling those roots causes. Labour was in a pickle. It had no choice but to take the blame for the crisis, since it had been in power for the past decade. It could either take blame for deregulating and liberalising the economy or it could take blame for overspending. Since it was planning some level of austerity anyway and wasn’t exactly chomping at the bit to take on the 1%,  Labour was unable to develop a convincing alternative narrative about the crisis.

3. The Westminster bubble

Regardless of which party their paper backs during elections, senior editors of newspapers have close professional and personal ties with politicians. The same goes for the public service broadcasters like the BBC, which are mandated to be politically impartial. They all live in the ‘Westminster bubble’, meaning that the views and narratives of politicians will shape news content. In my media study, 51% of the sources quoted in the content were politicians and other officials. As stated above, the Tory narrative about wasteful public spending was not being successfully challenged by Labour, so the media would have had to look outside the bubble for other explanations. This they often failed to do, and when they did, they turned to people who were giving out similar messages.

The second biggest group of sources in my study were financial services representatives and the fourth biggest category was business representatives (excluding financial services). Together, politicians, business and finance accounted for around 70% of all sources quoted. And so, those responsible for causing the problems were called upon to make sense of them and offer solutions. Those who might have had more accurate explanations for the crisis – for example campaigners and activists, heterodox economists, or trade unions – hardly got a look in (each accounting for less than 2.5%) . As long as the pool of sources remains confined to politicians and business representatives, the range of views will be limited and analysis will be partial.

4. News values

Media scholars have long been studying the professional values and routines that shape journalism. A major news value contributing to media amnesia is an obsession with the very latest events at the expense of historical context, explanation and process. In my sample, 49% of coverage offered no explanation whatsoever for the crisis. In the vacuum created by the absence of other explanations, the inaccurate ‘public sector profligacy’ narrative was able to become dominant. This was the key justification for austerity.

The social values of journalists might also play a role here. Although there are many kinds of journalists and media outlets, it remains the case that those with staff jobs at established media organisations come from among the elite. They might lean left or right but their interpretations of events and ideas about appropriate responses will likely not be too far removed from those of the politicians with whom they studied at university.

5. Churnalism

Journalist Nick Davies coined the term ‘churnalism’ to describe the state of journalism in the current era. Since the 1980s, media companies have been stepping up their cost-cutting and revenue-raising practices. They have done this to maximise profit in a context of both increased competition in the digital era and increased media privatisation, deregulation and conglomeration. This has put enormous pressure on journalists, who are having to fill an ever widening news hole with fewer resources. Unsurprisingly, this has had an effect on the quality of content, and has led to problems of inaccuracy, cannibalisation, and an unwillingness and lack of time to hold the powerful to account and seek out alternative viewpoints. Thus, the neoliberal era of corporate power and profit-seeking that produced the crisis is also partly responsible for its amnesiac media coverage.

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Curing media amnesia

To tackle the causes of media amnesia and develop media systems that are fit for purpose, we will first need to tackle the question of ownership. Media oligopolies should be broken up and non-corporate media should be supported. This goes for the social media giants as well as organisations producing media content. Secondly, if the current political system continues to fail to represent the interests of the majority of people, we should rethink whether politicians should get to have such influence on the media narratives we’re exposed to. Certainly, the pool of sources needs to be much broader than politicians and CEOs. Thirdly, diversity should be increased within journalism itself. Fourthly, we as news consumers should ask ourselves questions about what the purpose of news is and what we actually want from news. And finally, we need to understand that the struggle over media is part of the wider struggle over the control of resources at the heart of the 2008 crisis and the aftermath with which we are still living. We need to have a good think about how we want our societies to be organised and what role we want the media to play in them.

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This article is a response to Paul Mason’s recent essay ‘Labour must become the party of people who want to change the world, not just Britain’, in which he argues that there can no longer be any privileged position for organised labour as an agent of socialist change. This reply will respond to that question specifically, leaving aside some other aspects of Mason’s essay, and argue that the working class remains the key strategic actor for overhauling capitalism.

The post-class left

Paul Mason’s 2007 book ‘Live Working Or Die Fighting: How The Working Class Went Global’ described how advanced capitalism had globalised capitalist class relations. The process has been recent, and spectacular. An internationalised proletariat has only recently become the world’s biggest single class; there are more wage workers in South Korea now than there were in the entire world when Marx and Engels wrote the ‘Communist Manifesto’. Vast new working classes have been created in Brazil, India, Mexico, Nigeria, Bangladesh, and elsewhere. Objectively, the material potential for socialism as a politics of working-class self-emancipation, based on workers organised as workers at the site of production, exists on an unprecedented scale.

But the Paul Mason of 2018 faces in a quite different direction to the Paul Mason of 2007. He is now one of the figureheads of what might be termed a new “post-class left”, writers, commentators, and activists who no longer believe in any privileged role for the working class as an agent of socialist change.

Mason argues that: “Networked technology, combined with high levels of education and personal freedom have created a new historical subject across most countries and cultures which will supplant the industrial working class in the progressive project.” What has caused Mason to give up on the idea of the centrality of class? The proletariat, it seems, has let him down. “It persistently refused to play the role of capitalism’s gravedigger”, he complains.

Some facts appear to lend weight to Mason’s argument. While new and powerful labour movements have emerged around the world, on the whole labour is weak and on the defensive. It is certainly the case that the past generation has been characterised by defeat and decline for organised labour in Britain. The trade union movement is now half the size it was at its 1979 peak, with vastly fewer elected workplace reps and shop stewards. In 2016, strike levels were at their lowest since records began. In 2017, after a period of stagnation, trade union membership fell. Recent high-profile national disputes – my own union’s fight against the imposition of “Driver Only Operation” on the mainline railway, or university workers’ strikes against pension cuts – are very much exceptions rather than a rule.

Do those sobering and disappointing statistics speak to an objective change? Is the organised working class disappearing from the historical stage as a distinct actor? What the statistics in fact reflect is working-class defeat, not changes in the structural position of labour under capitalism. That defeat is not eternal, or insurmountable. Mason and the rest of the post-class left have extrapolated erroneous claims of objective changes from those subjective realities of those defeats. Rather than attempting to challenge and overcome them, they have assimilated them into their worldview. Mason describes what the French labour movement called “la vie ouvrière”, what has elsewhere been called the “union way of life”, as having been “vapourised”. A more accurate metaphor might be to say that it has been smashed. Not much more comforting, perhaps, but containing an implicit potential for rebuilding that Mason rejects.

The post-class left is not a new phenomenon. It is a political tradition with a long history, that reasserts itself in periods of retreat for organised labour. In 2017, Paul Mason won the inaugural Ellen Meiksins Wood Prize. Three decades previously, the Marxist theorist after whom the prize was named wrote ‘The Retreat From Class‘, a superb polemic against those careering away from the idea of working-class agency in the direction of, amongst other things, liberal “social movement” politics. The new agents to whom Wood’s targets looked greatly resemble Mason’s “networked individuals”, including in the respect of being largely non-existent as a cohesive social element with any structural power within capitalist society.

Wood described the post-class socialists’ perspective like this:

“The formation of a socialist movement is in principle independent of class, and a socialist politics can be constructed that is more or less autonomous from economic (class) conditions. This means two things in particular […] A political force can be constituted and organised on the ideological and political planes, constructed out of various ‘popular’ elements which can be bound together and motivated by purely ideological and political means, irrespective of the class connections or oppositions among them. […] The appropriate objectives of socialism are universal human goals which transcend class, rather than narrow material goals defined in terms of class interests. These objectives can be addressed, on the autonomous ideological and political planes, to various kinds of people, irrespective of their material class situations.”

Wood was prescient. She could have been describing Paul Mason in 2018 directly. His incantational listing of movements such as the Arab Spring, Occupy, Scotland and Catalonia’s independence movements, demonstrations against Orban in Hungary and more besides are precisely an attempt to conjure a new agent “out of various ‘popular’ elements which can be bound together and motivated by purely ideological and political means, irrespective of the class connections or oppositions among them.”

It might be noted that the only one of those movements to come anywhere near to achieving any of its goals, the initial Egyptian revolution at the heart of the Arab Spring, did so precisely because of the unique role played by organised labour in huge industrial combines like the Mahalla Textile Company.
What is it that Mason claims gives his “new subject” its revolutionary potential? Neither the mere condition of being “connected” (connected to what? By what means?), nor that of being “educated” (by whom? On the basis of what ideology?) imbue structural power vis-à-vis capital. As Christian Fuchs put it in his critique of Mason’s 2015 book ‘Postcapitalism: A Guide to Our Future’:

“Almost all managers, CEOs, and other members of the class of the 1% are ‘educated and connected’. They are the globalised, networked, educated, influential – and wealthy. Are the educated, connected and networked hedge fund manager and the educated, connected and networked entrepreneur, who parks and hides his wealth in tax havens, part of this subject? Definitely not! Education, networking and connectedness are not automatically politically progressive.”

Mason argues that our consumption power may give us leverage:

“We are ‘pro-sumers’ in many different ways: our fashion choices create the value of global brands. In addition, huge new corporations have adopted business models based on harvesting the positive network effects of our online behaviour.”

But what common, socially-cohesive, interests, do “pro-sumers” having their data harvested by tech corporations actually have, beyond perhaps a desire for more digital privacy? What structural power can people organised on this basis actually wield? Indeed, how can they even be organised, except perhaps as passive electoral supporters of a party that promises to represent their “values”? Maybe that is indeed Mason’s ultimate aspiration: there is more than a little evidence to suggest this may be the case. He is entitled to this view, but whatever else it is, it is not a strategy for “overhauling capitalism”.

What appears to underlie much of Mason’s wider perspective is a morass of theorisation that contends that capitalism itself has entered a new condition. Sometimes referred to as “information capitalism” and “cognitive capitalism”, the claim is that individualised cognitive labour, based on interface with digital systems, has replaced the collective production processes of “industrial” capitalism.

Certainly, information technology has changed the nature of a great deal of waged labour. But a dockworker who operates a semi-automated crane from a digital workstation is still engaged in an industrial process and in a wage relation. Combination and common organisation with other workers engaged in other aspects of that process – the workers on the ships, the workers driving the containers away from the port, the transport workers running the train networks serving the port – are still the means by which that worker, “cognitive” and technologised though their labour is, can confront their employer and affect change.

It is on that basis, of structural position within the social and economic infrastructure of capitalism, that Marxists have understood the working class as central to the socialist project. As Wood puts it:

“Revolutionary socialism has traditionally placed the working class and its struggles at the heart of social transformation and the building of socialism, not simply as an act of faith but as a conclusion based upon a comprehensive analysis of social relations and power. In the first place, this conclusion is based on the historical/materialist principle which places the relations of production at the centre of social life and regards their exploitative character as the root of social and political oppression. The proposition that the working class is potentially the revolutionary class is not some metaphysical abstraction but an extension of these materialist principles, suggesting that, given the centrality of production and exploitation in human social life, and given the particular nature of production and exploitation in capitalist society, certain other propositions follow.”

In other words, it is the position of labour in the machinery of capitalism that gives its unique power. The wage relation is capitalism’s essential core. It is in the workplace where capitalism most fundamentally “happens”. Until the answer to the question “where does value come from under capitalism?” is something other than “human labour”, organised labour will continue to have this unique potential, no matter how weak, beaten-down, or misled our organisations may be at any given moment.

For all his insistence that it must be supplanted as the agent of socialist change, Mason makes little attempt to account for what has actually happened to the working class, or where he alleges it has gone.

“The bargaining power of the individual worker is weakened by globalisation” he says, without making any attempt to substantiate this. Globalised production process and supply chains in fact provide the potential for a greatly increased bargaining power: what is lacking is a subjective element, an organisation of workers across the supply chain that can take collective and coordinated action.
In many ways, Mason’s use of the word “industrial” is misleading. The types of work traditionally associated with this word, such as mining and heavy manufacturing, have certainly declined in Britain. But firstly, that is not the case globally. Read against the backdrop of miners’ strikes in South Africa or factory workers’ revolts in China, Mason’s present thesis seems parochially Anglocentric, even on its own terms.

And secondly, it is not the “industrial working class”, or any other section or subset, that Marxists posit as the key agent of change, but simply the working class as a whole: all those live by selling their labour power, and the social collective around them. Yes, certain industries, such as transport, logistics, and telecommunications, may have more strategic significance within capitalist economic functioning than others. But it is neither the case that workers outside these strategic industries are powerless, nor that the strategic industries themselves have disappeared.

Kim Moody’s new book ‘On New Terrain‘ examines a generation of change in the American working class, and concludes that far from causing it to disappear as a strategic anti-capitalist actor, many of the changes (for example, the creation of vast logistics hubs and distribution networks) provide a renewed potential to build working-class organisation and power. Again, it is the subjective element of working-class organisation and resistance that is missing, rather than objective changes to the way in which work is structured under capitalism having rendered organised, or potentially organised, labour powerless.

At its height, the great 1984/85 miners’ strike involved less than 150,000 workers. Around 20 times that number, close to 3 million, work in the supermarket industry today. This is not a picture of a disappearing proletariat. Many of those 3 million retail workers may not have the same direct leverage in terms of the immediate strategic significance of their labour to the economy as coal miners did, but collectively, their labour is of huge strategic significance.

Imagine a union organised across the retail sector, organising shop workers, warehouse and distribution workers, and drivers. A strike by such a union would have an immense economic and social impact. Many of those workers might, according to some of Mason’s categories, also be “networked individuals”, in the sense of being connected by their common usage of various social media platforms, for example. Many are young. Many are migrants. All of these conditions and identities are important, but it is their position as workers, and their involvement in the production process and a wage relation, that fundamentally coheres them and gives them socially-transformative power.

Mason also cites “precarious work” and “a culture of individualism that would have been obnoxious even to the dockers of Limehouse fighting over halfpennies on the streets in 1889” as factors that have destroyed the working class’s power to affect socialist change. Neoliberalism has indeed had ideological and cultural impacts (the “culture of individualism” Mason refers to), but there is something of imaginary-golden-age reminiscence about his Limehouse dockers “fighting over halfpennies on the streets”. In any case, those dockers were no strangers to precarious work. Indeed, the organisation of employment on the docks were heavily based in precarious hiring practises and zero-hour contracts. Far from being a uniquely new development, “precarity” has been a feature of capitalism, since its inception.

New Unionism, and a new New Unionism?

Mason’s article makes much of the period of “New Unionism” in the 1880s, a moment of immense upheaval and recomposition for the labour movement in Britain. This is indeed a useful focus. Where was the organised working class movement prior to this period? Weak, bureaucratised, divided in conservative and exclusionary unions based on craft, and still reeling from the defeat of Chartism, the great movement for working-class democracy, a generation previously.

But, as Mason’s article and history records, organised labour revived. That revival did not happen by mere collision of historical forces but because conscious, organised actors within the working class undertook political and educational work to develop an approach that could catalyse struggles, spread them, and help them win.

Mason refers to Eleanor Marx telling a crowd in Hyde Park: “enough of strikes, fight for socialism and the eight hour day”. But this is a gross misrepresentation of Marx’s role in the period. She taught Will Thorne, a gas worker in Beckton and a key strike leader and founder of the ancestor union of today’s GMB, to read. She helped found that union’s women workers’ section, and sat on its executive committee. She spoke repeatedly at rallies for the dockers and other strikers. The role of Marx in New Unionism was absolutely not, as Mason alleges, as a carrier of “the left wing orthodoxy of the previous century”. Indeed, while Marx, Thorne, Tom Mann, and other New Unionist leaders were members of the Social Democratic Federation, Britain’s first organised Marxist group, their political activity as SDF members and their industrial organising were largely separate, and the SDF as a whole tended to take a sectarian attitude to the reviving labour movement. Their roles in New Unionism were precisely to break from orthodoxy and inertia, to find an opportunity to light a fire, and to help it spread.

The potential for labour movement renewal and recomposition today, a new New Unionism, lies precisely in the struggles of the modern analogues of the workers who made the 1880s movement: the precariously-employed, often migrant, often women, often young workers largely on the margins of the existing, bureaucratic unions, whose self-organisation and activity exploded the inertia.

Fast food workers in the Bakers’ union and cinema workers in the Bectu section of Prospect taking on multinational corporate giants in McDonald’s and Cineworld; restaurant workers in Unite; outsourced migrant cleaners in small unions like IWGB, CAIWU, and UVW, as well as in established unions like RMT, fighting for living wages and direct employment; “gig economy” workers exploding the myth that superficially atomising employment practises have robbed them of power and leverage; and politically-disparate but expanding attempts to consider how workers in the immensely strategically-significant logistics and distribution industries can organise. These are sparks that can be fanned into a conflagration if the workers within them, supported by organised socialist activists in the wider labour movement acting as the “memory of the class” and providing a repository of previous struggles, victories, and defeats, undertake the same conscious efforts that Marx, Mann, Thorne, and others took in their day.

The Corbyn surge and the return to class: how to transform the labour movement?

The immediate backdrop for Mason’s essay is the Corbyn phenomenon in the Labour Party. Still immensely febrile and in flux, this movement has seen hundreds of thousands of people, many of them young, flood into the Labour Party, inspired by a sharp break from Blairite orthodoxy on many policies. The movement has the potential to radically transform the party, making it more democratic, rooted in working-class communities, and a catalyst, supporter, and political representative of working-class social and industrial struggle.

In this sense, Mason is right to aspire to a party that is both itself a social movement and part of a wider social movement. But to overthrow or even meaningfully confront capitalism, that social movement needs deep roots in capitalism’s engine room: the workplace. A return to class on this basis can move past the psephological triangulations between the perceived wants and desires of “metropolitan”, socially-liberal workers and youth on the one hand, and those of ex-“industrial”, socially-conservative workers in the north and Midlands on the other. A democratically and politically transformed Labour Party could seek to organise, represent, and empower both groups on the basis of a shared class interest.

The Corbyn surge is yet to find a real expression in the trade union movement. Even Unison’s Dave Prentis, a notoriously bureaucratic and conservative leader, has managed to position himself as a Corbynite. What the situation requires is not a desperate casting around for a new agency, but a conscious effort to transform and revolutionise the existing labour movement.

In the first place, the young people energised by the Corbyn surge need to express that energy where they work. The US collective Labor Notes’ Troublemaker’s Handbook provides a basic manual for fighting back against the direct and immediate representative of capital in your own life: your boss. Socialists involved in the Labour Party should be seeking to adapt it for a British context, and run workshops on it through local Labour Parties and Momentum groups.

Trade union militants in Labour should be agitating for it to become the party of strikes. For the first time in generations, a genuine organic link can be made between the demands of strikes and Labour Party policy. Labour can say to striking McDonald’s workers: we are the political expression of the demands of your strike. If we are in government, we will legislate to secure your demands. And, conversely, McDonald’s workers seeking to politically bolster their industrial dispute can join and becoming active in Labour, not as passive electoral foot-soldiers but as conscious actors seeking to express their class interests on the political terrain.

Within unions, the dynamic energy of the Corbyn surge can be a force for democratic renewal, just as it has the potential to be within the party. The tradition of independent rank-and-file organisation and insurgency is largely submerged in the British labour movement, but it is one that may soon be rediscovered by, for example, University and College Union (UCU) members organising to build a counter-power in their union against a capitulatory leadership. UCU is not a Labour-affiliated union, but many of the activists leading the new rank-and-file initiative are broadly situated within the milieu of the Corbyn surge. Many of them, no doubt, would also fall into Mason’s category of “educated, young, networked people”, but like the skilled cognitive dockworker operating computer systems in a container port, it is their position as workers, and their involvement in transformative struggle within class organisations, that gives them their power.

In this way, there can be a symbiotic relationship between the radical transformation of both the political and industrial wings of the labour movement. This will be a prerequisite for consolidating and defending, even on its own moderate social-democratic terms, the Corbyn project in government. If a Corbyn-led Labour government attempts to legislate for a £10/hour universal living wage for example, and rogue employers simply refuse to cough up the increase, how else will that policy be enforced other than by those employers’ workers leveraging their own class power and striking to enforce it? That level of militancy and organisation can be achieved if socialists active in the Labour Party and the unions develop a perspective of building for it right now.

There are other voices in the Labour milieu advocating what might present itself as a “return to class”. But refocusing on class on the basis of seeking a radical transformation and renewal of the labour movement is quite distinct from the perspective advocated by, for example, the Blue Labour tendency. This ostensible return to class is in fact a form of nostalgic identity politics, with class conceived of as a category of cultural identity, often figured in deeply socially-conservative terms – see Blue Labour’s use of the slogan “faith, family, and flag” – rather than a collective social relation.

The working class has never really resembled the picture painted by both Stalinists and Blairite “authentocrats” like Stephen Kinnock, centred on an archetypal male, white, essentialised worker, in a manual industrial job, part of a “stable community”. That was not the working class of New Unionism; it is not the working class of today. Our class comprises migrant workers, women workers, LGBT workers, benefit claimants and the unemployed, and women engaged in unpaid domestic labour. A revitalised and transformed labour movement must become the organised expression of our class as a whole.

Horizons beyond electoralism

Accompanying, and informing, Mason’s retreat from class is an unacknowledged but massive contraction of his political horizons.

Despite his selective quotations from (Karl) Marx, and despite stating in the introduction to his essay that he wants to “overhaul” capitalism, he now argues that “the ultimate, and most revolutionary form of political action that can be taken amid a neoliberal system in crisis is to put a party into government committed to the positive goals and values of “educated, young, networked people”, etc.

Wood answered him in 1986:

“In the final analysis, the theoretical and political touchstone for the NTS [“New True Socialists”, Wood’s tag for the post-class left of her day] is not socialism at all, but simply electoral victory. Once we understand that the logic of their argument is an electoralist logic, once we accept that their standards of success and failure have little to do with the conditions for establishing socialism and everything to do with constructing victorious electoral alliances […] it will at least make some kind of political sense.”

This is not to dismiss the importance of electoral activity, or organisation on the political terrain. Marx and Engels’s identification of three fronts of class struggle – ideological (or theoretical), political, and economic – remains a vital frame, and the socialist movement must be actively organised and intervening on all three. Electing a Labour government and shaping, pushing, and radicalising its policies via pressure from below, including extra-parliamentary action, should be a key aim. But it is only by reconnecting with class, the structuring relationship at the core of capitalism, that this electoral horizon can be expanded into a horizon of revolutionary anti-capitalist counter-power.

Mason has retreated from class into the diminished horizons of electoralism, confecting a substitute agent for the project that is part radical-sociological woo-woo (tip: another word for “member of the ‘salariat'” is… “worker”) and part psephological fantasy. It is a defeatist recoiling from a situation of weakness, masquerading as innovation. Contrary to its own claims, it does not develop Marxist politics, but gives up on them.

Our task is to rebuild class power, not to pretend it no longer matters. The socialist project does not need to move beyond class, but return to it. This is not a matter of millennarian faith in a historical mission, but of renewing our political resolve and undertaking an act of will to help our class unlock its potential. As Hal Draper, the great writer of the unorthodox-Trotskyist American left, put it in his 1950s article ‘Why The Working Class?’:

“The socialist revolution, once observed Rosa Luxemburg, is a war in which there are necessarily a continuous series of ‘defeats’ followed by only one victory. Nothing can be guaranteed, of course, except the honor and dignity of fighting for a new and better world, rather than the vileness of adapting one’s mind and heart to a vile one.”

Young activists eager to forge from today’s febrile political moment a movement that can overhaul capitalism and replace it with socialism – radical democracy, common ownership, and social freedom – would do better to take their strategic advice from Hal Draper, Eleanor Marx, and Ellen Meiksins Wood than Paul Mason.

The Marxist project – working-class self-emancipation, and through it, the emancipation of all humanity – is as possible now as it ever was. What it requires is new activists to fight for it.

The post Why class still matters: a reply to Paul Mason appeared first on New thinking for the British economy.

‘Networked individuals’ have replaced the industrial working class as the key agent for overhauling capitalism in the digital age. To win power, Labour must represent their values, culture, aspirations and political priorities.

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In the spring of 1888, a sociologist called Beatrice Potter went undercover in the East End of London to research conditions in the garment industry – publishing the findings as Pages of A Workgirl’s Diary not long after. One finding, however, proved too scandalous to publish:

“The fact that some of my workmates, young girls in no way mentally defective… could chaff each other about having babies by their fathers and brothers, was a gruesome example of the effect of debased social environment … The violation of little children was another not infrequent result…”

Potter saw the unskilled working class as helpless and degraded, incapable of rising out their ignorance and self-oppression without intervention from above. This was a consistent trope in 19th century sociology – reinforced by skilled, self-educated workers themselves as they clawed their way out of poverty and expressed scorn at those they left behind.

The popular assumption was that middle class women like Beatrice Potter had agency; the workgirls of Limehouse did not.

Within 12 months the entire assumption was blown away. In July 1888 the “match girls” famously went on strike at the Bryant & May factory; then in 1889 the dockers – whose lives Potter had described as a mixture of “bestial content and hopeless discontent” – shut down the Port of London through mass, spontaneous strike action. Then much of London joined them, led by union organisers who could quote Marx because Karl’s own daughter had been educating them.

The London Dock Strike of 1889 was not just a British event. It was part of a global moment in which the unskilled and migrant working class of the late 19th century found collective agency. Potter’s memoir of that year is entitled “How I became a socialist”, though by now she had also become Beatrice Webb.

It took 12 years from the formation of mass trade unions in 1889 to the formation of the Labour party in 1901, under the tutelage of Webb and the Fabian socialist movement she helped create. Between then and the outbreak of the war, progressive social movements hit the British establishment like a meteor shower. The Suffragette agitation and the mass strike agitation, which reached a peak in 1911-1913, had the greatest impact. But Robert Blatchford’s The Clarion newspaper and the emergence of working class voices via the new repertory theatre movement show that a wider popular radicalisation was also under way.

The London Dock Strikes. Image from the Illustrated London News of 7 September 1889. Public domain.

By 1914 nobody could dispute the facts: a labour-movement consciousness was widely and spontaneously shared by millions of working people; it was rooted in the technological and social realities of early 20th century capitalism; and it was allied to demands for wider democracy and social justice – even if it took until 1924 for the word ‘socialist’ to appear in a Labour party manifesto.

Labour’s challenge today is to repeat this process with a whole different set of people. It’s not going to be easy and, as with the Fabians, the Suffragettes and the syndicalists of the Edwardian era, it will take time.

***

Neoliberalism is the first form of capitalism since the 1830s in which capital is needed to atomise the working class instead of regimenting it. The sheer social strength of organised labour in the early 1970s, combined with the unworkability of the economic model that had allowed that strength to accumulate, required a break from paternalism and incorporation.

We live with the results. It’s not just that trade unions are weak and the old, fixed working class communities are destroyed. The bargaining power of the individual worker is weakened by globalisation, by precarious work and by a culture of individualism that would have been obnoxious even to the dockers of Limehouse fighting over halfpennies on the streets in 1889. The radical culture and lifestyle once known in France as “la vie ouvriere” (the working life) has been vapourised.

As a result, the most fundamental question facing the modern social democratic left is: who do we represent?

From 1945 until around 1989 you could say that the left’s problem in many countries was the decline in voting by class identification. After 1989 it became much more serious: the actual demographic basis of social democracy was dissolving, while the electoral base of the right – the middle class, people dependent on financial investment and the repressive state – was actually hardening up.

This demographic challenge was compounded by a political one after the 2008 crisis, when most centre-left politicians refused to see how badly the system was broken. They chose to implement austerity and to double down on support for globalisation, free market economics and the coercive imposition of competitive behaviour that required.

As a result there began a conscious switch among some – mainly white – working class voters towards authoritarian, xenophobic nationalist parties. Meanwhile the educated salariat were also drifting away, towards cosmopolitan nationalisms in places like Catalonia or Scotland; or towards Green or radical left parties, as in Spain, Greece and the Netherlands.

For the technocrats in charge of social democracy, this presented a sudden and insoluble problem. Their strategy had always been – as with Blair and Clinton – to take the manual working class vote for granted and to create an electoral alliance with the educated, urban middle class through policies differentially positive for the latter. These included support for the consumer against the “producer interest”; suppression of union rights; deference to the agenda of social liberalism; and the introduction of market mechanisms into public services, which the better educated were able to game to their advantage.

At its most effective, as the Labour peer Maurice Glasman pointed out, technocratic centrism created a community of interest between the atomized urban poor and the salaried public servants employed to police, jail and rehouse them. This was not the intention of the original Third Way, which assumed all could rise out of poverty and dependency, but one of its byproducts. Centrist politicians were happy to go with the flow. They treated the urban poor and the elderly as clients; revived social democracy as the administrator of the client state; and told the traditional manual working class of the small-towns to adapt or die. As a consolation prize, what was left of the trade union movement in the defence, aerospace and supermarket sectors could have “partnership”, albeit usually on the terms of the corporations.

Once austerity replaced fiscal expansion, the assumptions and alliances that held New Labour together fell apart.

In Britain, the problem was compounded by the unresolved national question. The tribal alliance needed to put Labour in power was never just about class. For a majority Labour government you needed the working class of the north of England, Wales and Scotland; the city-dwelling workforce of all big cities; plus some swing voters from the salariat of small towns in Southern England.

But Labour’s support for unionism during the Scottish referendum saw them punished by the section of the Scottish working class that wanted independence, losing 40 seats. Labour’s support for carbon-heavy energy policy and for nuclear weapons were some of the reasons one million people voted Green in the 2015 election. Meanwhile, the 4.3 million votes for UKIP in the European election of 2014 was another signifier that the tribal alliance was no longer possible. UKIP – and later the Tories – would feed off an unaddressed English nationalism that Gordon Brown, with his “Britishness” ideology, barely understood.

Today the facts about Labour’s support, and its membership, are clear. Its half a million members are overwhelmingly drawn from the urban salariat, with more than 112,000 in London alone. It has lost maybe a fifth of its voters – typically white, unskilled manual workers in small towns – to right wing nationalism. The 2017 election showed that, for many of them, UKIP was a gateway drug to voting Conservative. And it has lost vast numbers of elderly people.

But in turn, vast numbers of educated, young, networked people have mobilised themselves to vote Labour.

To party strategists, this problem presents itself as: “how do we win?”. The persistent ability of Theresa May’s Tory party to poll around 40%, however badly they mess up, is not about competence or charisma. Instead it reflects a new political alliance involving a section of the “old” working class who are opposed to migration, globalism and social liberalism, with a layer of middle class people who are opposed to redistribution and social justice.

We can only move forward if we can answer the deeper question: who wants to change the world, and who has the agency to do it?

***

After reporting on the 2011 revolts, and observing the similarities between the people in the streets and squares of Cairo, Athens and New York City, I became convinced that a new kind of person had emerged, which sociologists labelled the “networked individual”.

Networked technology, combined with high levels of education and personal freedom have created a new historical subject across most countries and cultures which will supplant the industrial working class in the progressive project, just as they replaced the cottage weavers and artisans of the 18th century.

An Occupy London Public Assembly at St Pauls, 16th October 2011. Image: Neil Cummings, CC BY-SA 2.0.

Orthodox Marxists are appalled by this proposal, and for good reason. If the classic proletariat, owning no substantial property and destined to spontaneously solidaristic ways of life, is not in fact destined to overthrow class society, then a key tenet of Marxism is disproved.

This, as I argued in ‘Postcapitalism’, is the inevitable conclusion we have to draw from 200+ years of working class history. The working class always wanted to go beyond the piecemeal reforms offered by parliamentary socialists like Beatrice Webb, but never – outside extreme circumstances – wanted to impose the proletarian dictatorship proposed by Marx. Nor during the rare times that workers’ council-type bodies gained power were the working class able to secure these institutions against the influence of outside parties and bureaucracies.

The actual 200 year record of the proletariat is heroic: it wanted control and cultural space within capitalism and would fight to the death for this, even against parties claiming to be communist. But it persistently refused to play the role of capitalism’s gravedigger.

However, all this is only a tragedy if you have never read the early Marx. In the so-called Paris Manuscripts of 1844, Marx argues that the ultimate goal is not communism; that humanity needs to overcome scarcity and to reconnect with its fundamentally social nature. Communism, says Marx, is only the initial form society will take once you abolish private property, but this itself is not the goal. Individual human freedom is the goal.

But since the individual human being created by mid-19th century capitalism cannot achieve it, there needs to be a collective subject to make it happen. The Marx of 1844 designated the working class the agent of human liberation because of the altruism, self-organisation and education he observed among the left wing workers of Paris.

If you see the networked individual of the early 21st century not as a degenerate offshoot from the proletariat but as an improvement on it, then it is possible to accept that Marx was wrong about the industrial working class while maintaining the belief human history has both an outcome (self-emancipation via the abolition of private property and the achievement of individual freedom) and a collective subject with the interest in achieving it.

It’s been clear since 2011 that this is the role that the networked, educated and connected people of the 21st century will have to play. Work, the working class, its culture and trade unions are not abolished, but the place of each one of these things in the progressive project has to be rethought.

What’s become clear to me since 2011 is that, just like the 19th and 20th century working class, the networked individual group will have to undergo a process of political maturity analogous to the one the British working class went through between 1889 and 1914.

***

Marx is thought to have distinguished between a class “in itself” and a class “for itself”. This too is the change that has to happen with the networked individuals.

The first concept can be summarised by the idea that “we have a common way of life, a common interest and we hate the rich”. The second concept can be pithily summarised by the words used at Jeremy Corbyn’s famous Seder celebration: “fuck capitalism!”

However, Marx’s account of working class consciousness was more complex, and the more complex version has relevance to our political tasks today.

Marx never used the term “a class in itself”. Discussing the spontaneous tendency of workers to form organisations in ‘The Poverty of Philosophy’, Marx says they become “a class against capital but not yet for itself”. This makes a lot more sense, especially in the original French, where the first condition is described as “une classe vis-à-vis capital” – i.e. both opposed to and defined in relation to capital.

What would it mean for the networked individuals to define themselves “vis-à-vis” capital today? Once you understand how 21st century capital exploits us, it’s obvious.

Today capitalism exploits us at not just at work, but through financial transactions and via consumption. We are “pro-sumers” in many different ways: our fashion choices create the value of global brands. In addition, huge new corporations have adopted business models based on harvesting the positive network effects of our online behaviour. In addition to that, as with all previous generations, capital exploits us by invading and commoditizing our ordinary human behaviour.

In its current form – overshadowed by a global debt mountain four times the size of annual GDP – this mixture of broken financial capitalism and unregulated info-capitalism relies heavily on coercion: we are coerced off disability benefits, coerced into competitive behaviour patterns, coerced away from cash as a store of value.

In addition, as long as people stick by the rules of market behaviour they are allowed to form all kinds of destructive power hierarchies – from organized crime to the culture of workplace harassment that triggered the #MeToo movement.

Harvey Weinstein. Image: Thomas Hawk, CC BY-NC 2.0.

Almost everything the networked generation has done can be interpreted within the framework of resistance and adaptation to these new forms in which capital exploits us.

The #MeToo movement is just the latest example. Consumer boycott movements against cheap labour in garment factories; the widespread sit-ins in banks and pharmacies in 2010-11 launched by UK Uncut; the Occupy movement and its political aftermath – which was the occupation of the Labour party by tens of thousands of active, educated, young networked people – can all be seen through this lens.

In the USA, Black Lives Matter was a product of the independent means of communication, access to the legal system and, above all, the emergence of a networked and educated generation who had actually studied at school and college the movements they would now emulate.

Even where issues of social oppression collide – as with the increasingly bitter “trans vs radical feminist” dispute in the English speaking left – you are dealing with two sets of network-empowered people fighting for the right to define their own oppression and set social norms to alleviate it.

When they first emerged among the tech workforces of the 1990s studied by Richard Sennett, the behaviour patterns of networked individuals seemed negative from the point of view of social justice movements. They cultivated weak ties, refused to form permanent organisations, framed all struggles in terms of the self not the collective, and seemed at home in the most alienating of modern environments – the newly gentrified inner city. The title of Sennet’s 1998 book sums up how the effects of networked technology looked then: “The Corrosion of Character”.

Since then, I think it is fair to say that this new demographic (I would not call them a class in the sense of 20th century sociology) have defined themselves fairly clearly “vis-à-vis capital”, as Marx put it.

They don’t like its effects. They fight its effects sporadically and in a framework centred on the individual. But they have no overarching concept of collective liberation, and their political project is poorly articulated. However, that too is changing.

***

When Marx used the term “a class for itself” he added that “the struggle of class against class is a political struggle”. The evidence that a social group recognizes its own interests and begins to fight for them as a positive concept comes through political action.

The Arab Spring was a political action. So was Occupy. So were the Corbyn and Sanders movements. But so also was the Yes campaign in Scotland’s big cities. So was Catalonia’s referendum on 1 October 2017. So was the camp at Gezi Park. So was the US women’s march of 21 January 2018. So was the anti-Orban demo in Hungary a few weeks ago. So is the Repeal the 8th movement in Ireland.

All over the world what appear to be the defence of “liberal” values against authoritarian, racist conservatism are in fact much more than this. They are the defence of a new concept of freedom, in the face of coercion from markets, states and kleptocratic elites.

But the ultimate, and most revolutionary form of political action that can be taken amid a neoliberal system in crisis is to put a party into government committed to the positive goals and values of this demographic group.

Above I said that the group I am talking about is not a “class” in the sense that the proletariat was from around 1820 to say 1989. But EP Thompson once made the point that the 18th century working class also had to be defined using different criteria.

Thompson taught us not to apply the concept of class that emerged alongside the 19th century workforce retrospectively onto the class struggles of the 18th century. The players then were the gentry, the monarchy, the respectable cottage artisan and the urban crowd. You could discern a class struggle within these blurred lines only by refusing to use the factory proletariat as the framework.

By the same token if my blasphemous proposal is correct, and the proletariat has been replaced as the historical subject by a more diffuse behaviourally-identified layer of people, not defined by their role in production but also by consumption, culture, attitude and ideas – then we can’t hope to describe them adequately in a framework based purely on people’s relationship to work.

***

The social explosion of 1889 didn’t happen by itself. Tom Mann, the organiser of the Dock Strike, had been an activist in the Marxist-led Social Democratic Federation, a member of the engineering union when it functioned more like a brotherhood, and worked in the USA at the time of the anarchist-inspired eight hours campaign.

But once it did happen, it posed left wing thinkers and strategists with a major question: are we going to provide this movement – mass, cultural and inchoate as it is – with a sharpened political tool or not? Are we going to leave parliamentary politics to the liberals or burst through into the power system with something of our own?

If you listen to Eleanor Marx on a soap box in Hyde Park on Mayday in 1890, she’s trying to answer the problem in the old way: enough of strikes, fight for socialism and the eight hour day, she tells the crowd.

If you listen to Beatrice Webb, however, there’s the beginnings of a new answer. Webb understood that the power of capital was too strong to be defeated and restrained by meagre things like co-operatives or garment workers’ unions. You had to enact the co-operative principle at the level of the state, she wrote.

Fabianism is often accused of belittling the agency of ordinary workers, but at its inception it was an attempt to focus that agency around achievable – and massive – political goals.

Mann himself, in the aftermath of the Dock Strike, contributes a different principle: that through self-organisation, self-improvement and the struggle for control, workers can create the beginnings of the new world through their everyday practice.

Here’s what I think that means for Labour in Britain now. As Brecht once wrote: those who will change the world are the people who don’t like it. Right now, what these people don’t like about it is, in no particular order:

• the coercive and invasive nature of markets;
• the unfairness and rising inequality;
• the lawlessness and tax evasion of the rich;
• the perennial resort of elites to wars of aggression;
• the persistence of racism, sexism and homophobia in a world where they’re supposed to have disappeared;
• the return of fascism, xenophobia and ethnic nationalism;
• the unaccountability of elites; and
• the precariousness and often pointlessness of work.

As they move from simply resisting these impacts of capital to a more political goal, the Labour party has to be the tent in which they gather. There has to be room in the tent for the modern Tom Mann, who wants to build the new society from below through defiant practice. There has to be room for the modern-day Eleanor Marx, who can’t forget the left wing orthodoxy of the previous century. And there needs to be a Beatrice Webb, to tie it all together into a long-term strategy at the level of the state.

Once you conceive Labour’s strategic task as representing and empowering networked individuals who want to change the world, the tactical problems don’t go away, but they can be placed in the right framework.

Labour has to represent the networked individual: their values, culture, aspirations and political priorities. Insofar as these things are represented by other parties – as in young urban Scotland or in Green voting parts of Bristol and Brighton – it must expect, and live with, the fact of other progressive parties.

Labour’s programme cannot be a mishmash of last-century demands with a few deferential nods to the agenda of the networked, precarious, individually-minded people who form the core of its support base and membership.

The radical thinking that has begun under Corbyn and McDonnell – the exploration of new forms of ownership, new business models, commitments to co-operatives and consideration of the basic income idea – has to gain pace and deepen. It took the Labour party from 1901 until 1924 to stop issuing manifestos that were simply appeals for more democracy and demands for higher wages and welfare benefits. We don’t have that long in which to overhaul the programme, culture and strategy of British social democracy in a radical direction.

Right now, the attention of many Labour activists and pro-Corbyn MPs is being sapped by the tawdry rearguard action of a few Blairite die-hards who seem determined to form a new party after they have trashed the reputation of the old one. When the break with them comes – and all the signals are there that it is coming – the danger is that it will empower “old-think” inside Labour. People will run towards comfort blanket of Keynesian state management, welfarism and corporate nationalisations.

Instead we need a new, expansive radicalism that enables everybody who wants to resist capitalism’s invasion of the self – via markets, coercion, authoritarianism, xenophobia and illiberalism – to identify Labour as the tool they will use to change the world.

That means, in turn, a Labour party that is both more like a social movement and part of a wider collection of social movements. It is to that organizational question I will turn to in a future essay.

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This week hundreds of activists will gather in Wigan for ‘CTRLshift: An Emergency Summit For Change’ – a three day conference exploring the uncertainties and opportunities of our times, convened by around 20 grassroots, social change organisations.

Kicking off on Tuesday 27 March, the event will bring together activists, organisers, and entrepreneurs to develop a shared agenda to shift power over our democracy, economy and environment, from Westminster and multinational corporations, to people and communities across Britain. By bringing these solutions together and mobilising people for local and regional action, the organisers hope to make ‘taking back control’ a positive reality. As the conference summary explains:

“Our departure from the European Union is a moment of significant disruption and presents us with an unparalleled opportunity to reshape the future. We believe that the best way to effect change is to bring together those working to reform the system with those actively building practical radical alternatives on the ground.”

Over the course of the conference participants will hear from a wide range of organisations and speakers and spend time discussing challenges, examining possible solutions, and exploring opportunities for collaboration. There will also time for socialising, networking and live performances. The overarching goal is to help a more effective movement for positive change to emerge from collective actions.

Partners include Co-ops UK, The Alternative UK, Forum for the Future, People’s Food Policy, Shared Assets, Permaculture Association, Solidarity Economy Association, Social Enterprise UK, The Finance Innovation Lab, Stir Magazine, Totnes Economy Project, Transition Network, Local Futures, Shared Future CIC, Coop Business Consultants, Schumacher Institute, The Low Impact Living Initiative, Real Farming Trust, Red Pepper, Schumacher College and many more.

For more information on the programme, or to find out how to attend, visit the summit website: www.ctrlshiftsummit.org.uk

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The aim of openDemocracy’s ‘New Thinking for the British Economy’ project is to present a debate on how to build a more just, sustainable, and resilient economy. In the project so far we’ve debated policy areas ranging from trade policy and universal basic income, to childcare policy and housing .

But across Britain, hundreds of people are working tirelessly to build a new economy on a daily basis, putting new economic ideas into practice from the ground up. In a new video series, we will be showcasing some of the most exciting initiatives that are already working to replace different aspects of our failing systems with fairer and more resilient alternatives — from housing and finance to food and energy.

This week, Mark Walton from Shared Assets speaks to us about the work the organisation is doing to reclaim land as a common good, and pioneer new models of land management that deliver shared social, economic and environmental benefits.

Watch the full video below:

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Britain has never had especially high levels of trust in economic and political institutions. But in recent years, levels of trust have fallen to a point that raises questions over the legitimacy of those institutions. At the RSA, the motivation for our Citizens’ Economic Council work was a view that the quality of economic debate in the UK was poor and deteriorating.

Our new report ‘Building a Public Culture of Economics’ makes the case for rebuilding trust in, and the trustworthiness of, political and economic institutions. We make several recommendations to strengthen the democratic management of our economy.

Democratic voice

Democracy is a structure designed to find solutions that work for the largest possible section of the population – for the public good. Democracy is about listening and compromise, not individual interests winning because they have the loudest voice.

The divisions in British society brought to light by the EU referendum, and indeed demonstrated across the world by the rise of populist politics in the US and much of Europe, are a threat to democracy. They threaten democracy not because people want different things to what the infamous “experts” – our economists and politicians – tell us we should want, but because they are creating  “weaponised narratives“ of us and them. Narratives which shout loudly into the void, uncaring of other voices and unwilling to listen or compromise, polarising society to the point where we can’t agree how to govern our economy anymore.

To make matters worse, many media organisations appear to be struggling to report the news in a balanced way that gives appropriate respect to the reality of people’s lived experiences around the country. This can be considered true of traditional media organisations and new social media platforms such as Facebook and YouTube.  As research from City University London shows that 95% of journalists in the UK are white, 55% are men and 36% live in London. It is therefore perhaps unsurprising that news reporting has a diversity problem.

Our report evidences a widening chasm not just between expert and citizen, but also between citizen and citizen. These diverging views in and of themselves are not problematic, but we argue that it is the failure of these perspectives to engage critically and respectfully with each other that is undermining the quality of public discourse on the economy.

So what should we do about it?

Despite the EU referendum, a Populus poll commissioned by the RSA reported that only 21% of respondents felt they had either a lot or a little influence on the Government handling of Brexit as Britain initiated the process of leaving the EU. This figure was significantly higher in London, and lower in areas that will arguably be most affected by Brexit such as the north-east and Wales (as shown in the map below).

This demonstrates how trying to distil an issue as huge and complex as whether or not to leave the EU into a binary black and white vote will not answer the concerns of a public, who have complex needs, experiences, fears, and hopes. Instead, we need a democratic mechanism that allows for a nuanced discussion of the different stakeholders and trade-offs within such a decision. We need to ‘build a public culture of economics’ in which diverse citizen voices can be included in and have influence over economic decision-making so that outcomes are reflective of the needs of people across the country. We argue that the process of deliberation, where citizens exchange arguments and consider different claims designed to secure the public good, could be a way to start these necessary and meaningful conversations, adding to democratic structures that already exist and strengthening the democratic management of our economy.

Deliberative democracy

Deliberation emphasises collaboration, cohesion and empathy in political discourse. It also greatly enhances the sense of agency of participants and, we contend, it could also increase the sense of agency and degree of trust and confidence among the wider public if the use of deliberative democracy were to become widespread, consistent and well publicised.

This is not to say that everything is perfect in the realm of deliberative democracy: it is impossible to represent all 65 million people living in the UK within a deliberative process, for example. What it can do however is bring together a greater diversity of voices than currently exist in the media or in our representative form of democracy, and use their different perspectives to explore and widen the debate on how and why we make economic decisions. Just as the British public trust our criminal jury system despite not having necessarily served on one, our opinion survey revealed that 47% of people would trust economic policymaking more if they knew that ordinary citizens had been formally involved in the process.

Deliberation strengthens representative democracy by shortening the feedback loops between decision-makers and those governed. It also strengthens direct democracy by ensuring that, before individuals cast a direct vote on an issue, they have directly participated in, or at least observed, a vibrant and respectful democratic discourse.

Where next?

We argue that conversations about the economy start at home. To build a strong democratic discourse about economics, it is essential to meet people where they are and to proceed from people’s everyday experience of the economy through work at play and in their communities. This suggests that the most fruitful domain for applying deliberative democracy may be, at least initially, at the local and regional level.

At our report launch last week, Bank of England Chief Economist Andy Haldane announced that the Bank of England wanted to “climb the ladder of engagement”, moving up from the rungs of ‘inform’ towards ‘collaborate’, and would be acting upon our recommendation for the Bank to pilot Citizen’ Reference Panels with each of its 12 Regional Agents.

Our other recommendations are addressed to HM Treasury, national and local government, and combined authorities in the context of devolution. Will they show similar leadership and understanding in the need to diversify the voices within our democracy?

Read ‘Building a Public Culture of Economics’ to find out more.

The post How deliberative democracy can rebuild trust in our economic institutions appeared first on New thinking for the British economy.

Jeremy Corbyn’s call for an economy that works “for the many” has proved a revitalising rallying cry for a new social settlement beyond neoliberalism. But the democratic socialism that inspires Corbyn and McDonnell promises more than a redistributive agenda delivered for ordinary people from on high.

Just over one week ago, the Labour leadership used their “alternative models of ownership” conference to launch a set of proposals for economic democracy: an attempt to transfer power away from both private capital and government bureaucrats, giving control to workers and service users.

The plan here is a return to public ownership for public services and utilities. Then, the devolution of control to regions and municipalities where possible, and the inclusion of workers and users on governing boards. In the private sector, we’re promised the mass rollout of co-operatives and mutuals.

But as encouraging as these proposals are, is there anything that new? In healthcare, for instance, attempts have been made to involve patients in service design and delivery for some time. Are Clinical Commissioning Groups really the stuff of mass democratic renewal?

In Germany, the incorporation of workers on boards has seen German trade unions increasingly co-opted into the internal operations of capital. Is making M&S work a bit more like John Lewis really “taking back control”?

In sum: How can these plans be more than the hollow and tokenistic forms of “stakeholder involvement” championed by Blair onwards? Why, actually, would anyone want to give up their free time to help run their energy company or post office? Would you give up your Thursday evening pub trip to deliberate the small print of procurement policy?

Actually, maybe I would. But only if I truly believed that doing so would really enrich my life, and the lives of others around me.

If Labour really wants a New Economics, we need to commit to something really new. Just as it took the creation of a host of new institutions and processes to build the welfare state, equally it will take new institutions and processes to build a radically democratic economy. These institutions and processes should make participation in day-to-day economic decision-making as easy, effective and rewarding as possible. To do this, I suggest four principles.

1. Shaping society as a whole

Part of the problem with Labour’s current proposals is that they allow for participation only within pre-existing, predefined and constricting silos. Those with chronic illnesses have a clear reason to participate in managing health services; renewable energy geeks would relish the chance to input on energy sector decision-making – and great, so they should!

But what about those of us without such specialist interests? Why would we actually want to participate and how would we decide which sector to get involved with?

If we have trouble paying the fuel bills, chances are we’ll also be struggling to pay for water, rent, food. If we have a chronic health condition, this will often give us specific needs beyond health services, for instance around housing or the workplace. Accordingly, we need to build institutions that allow people more control over their everyday lives in their entirety, without forcing choices about the one thing that matters.

Instead of limiting democratic engagement to a health service users group or an energy co-operative general meeting, our task is to create spaces where people can debate and shape how society is organised as a whole.

2. Neighbourhood assemblies

But millions of people live in the UK. Wouldn’t giving everyone a say on everything be a total mess? Not if we develop systems to allow manageable forms of participation in the places we live.

What if every council ward in the UK held an assembly every six months, facilitated and organised professionally but open to all to participate in. Community organisers could be recruited to get as many diverse folks from across the area as possible involved.

What if these were not bureaucratic exercises in “consulting” people on decisions that were already made? If instead they were spaces to meet your neighbours, to become less isolated and lonely? What if the unexpected was allowed to happen, if lively debate and argument about both micro and macro level politics were encouraged?

These assemblies would be given the power to inform local government decision-making, and in addition to shape the direction of national services and industries. They would be spaces for dialogue, deliberation and local direct democracy. They would be able to signal approval or disapproval for particular policies in ways that would be hard to ignore.

3. Integrating direct and representative democracy

Neigbourhood assemblies would also elect delegates who would work together at a local authority level, always directly accountable and recallable to their neighbourhood. Local authority assemblies could then vote through delegates to constitute thematic regional and national working groups, for instance on energy or transport. The idea would not be that these working groups would be totally in charge of running industries and services. Rather, they would be able to participate in the management of industries and services alongside workers, politicians and experts.

What this amounts to is a proposal for bringing together two forms of democratic participation. While neighbourhood assemblies could allow for direct democracy on certain issues of specific localised concern, they also provide the building blocks through which systems of federation and representation are built. Layers of delegates coordinating across scales would be tasked with amplifying the voices of their neighbours within regional and national decision-making.

This deepens the democratic credentials of Labour’s current proposal. Yet it’s worth noting that this proposal for participation building from the local to the national is not a far cry from the Labour Party’s own internal democratic structures, or those within trade unions – structures that thousands across the UK already participate in.

What’s different here is that if we adopted these structures in government, mechanisms of democratic participation would be integrated within the political and economic structures that make or break our lives.

4. Digital participation

Finally, we should maximise opportunities for online participation in governing our economy and institutions. While digital democracy cannot replace the collective experience of being, discussing and deciding together in person, it provides a less time-intensive form of involvement that should be fully integrated.

In Barcelona, the city set its strategic plan with the aid of an online democratic forum in which all were free to suggest, discuss and vote on proposals – a process that over 40,000 people participated in.

Taking inspiration from this, an online forum could provide an opportunity to present and discuss proposals to be taken to each of the various layers of decision-making. This could also be a platform to maximise transparency, on which official documents and decisions are made easily accessible.

For those less familiar or comfortable with digital technologies, again following the example of Barcelona, specialist teams tasked with facilitating online participation could be formed.

***

The right’s story about taking back control proved compelling precisely because it was attached to a set of political acts – leaving the European Union, closing the borders, winning “national sovereignty” – whose radical consequences needed little explanation.

We absolutely need to reclaim questions of control as the territory of the left. But if the last few years of political turmoil have taught us anything, it’s that you cannot declare an alternative trajectory that anyone will believe without proposing something that looks and feels truly different.

We need a more believable vision of economic democracy that leaves no doubt as to its transformative potential. A vision that makes clear that mass participation is the only way to re-rig the economy in our interests as opposed to the interests of investors and speculators. A vision of renewed collective culture and belonging in a society that is still reeling from decades of being told that it does not exist.

We need a vision of a society that learns to live together differently. A society run both for and by the many, not the few.

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In times of disjuncture and hardship, an impulse exists to take flight from reality and retreat into the comfort of old-worn habits and familiar surroundings. To some, this offers the opportunity to reflect and reimagine. Many may simply desire to escape, or remain entirely ignorant to the problems at hand. For others, to be seen to act is all that matters. It is in this way that we can identify the different tribes that amassed in Davos for this year’s annual meeting of the World Economic Forum.

Whether they realise or not, the attendees of Davos occupied a time and space in which two of the most significant stories in human history are colliding against the hubris and misguided optimism of the global elite. The first is the story of the prevailing set of economic and political ideas in major ‘developed’ nations, so-called neoliberalism. The neoliberal story began over forty years ago, and –  as inequality grows and economic crisis looms – has become one of failure. The second story concerns the impact of human activity on the natural world and, specifically, the implications of these impacts crossing safe thresholds. This story began much longer ago, back in the furnaces of the industrial revolution and on the creaking ships of colonial pirates, and has reached its terminal phase as global impact portends global collapse.

The neoliberal story

Davos 2018 came at a bad time for neoliberalism. In Britain, the preceding week was dominated by the collapse of the outsourcing giant Carillion and the exposure, to a wider audience, of the pervasive extent and expensive failure of the private finance initiative (or PFI). Many PFI schools and hospitals were built to unacceptably (even lethally) low standards, later than promised, and, when firms failed to fulfil their obligations – as they often did – the state socialised the cost while executives walked away with their pay-packets untouched. In all, we will likely pay over £310 billion for assets worth around £55 billion.

PFI has been one of the central pillars of recent British political economy. The continued failure of PFI makes it even harder to deny that the status quo is founded on a set of ideas used to justify unfettered profit maximisation and sweep aside any impediments to that end. In their infancy in the fifties and sixties, the development of these neoliberal ideas was encouraged by economic interests whose primacy was threatened by the New Deal and post-war consensus. Money flowed freely to entrepreneurial academics, who, in turn, told corporate leaders what to think and say. The ever lucid Milton Friedman, an economics professor in America and the supplest of intellectual gymnasts, gave them exactly what they needed when proclaiming that the sole social responsibility of business was to increase profits. In doing so, firms must, according to Friedman, stay “within the rules of the game, which is to [engage] in open and free competition without deception or fraud”. Inevitably, lavishly funded lobbying operations ensured the ‘rules of the game’ were changed, while, presumably, successive governments sought to minimise barriers to profit-making in order to maximise social welfare. It is easy to imagine the laughter of those benefiting from this arrangement pealing out over Westminster as they shopped between meetings with one uncritical adherent after another. Needless to say, there is nothing socially responsible about charging an NHS hospital £333 to replace a lightbulb.

The wider array of neoliberal ideas justifies policies that have relinquished economically productive state assets, create extraordinary levels of waste through unnecessary marketisation, and, ultimately, captured the state as a means to guarantee revenue streams with little to no risk. In theory, neoliberalism essentially ignores market failure; in practice, it benefits from it, actively promoting it at each turn. The financialisation of the economy is the deeper, inevitable consequence of a dictatorship of ideas that elevates short-term profit maximisation as the driving impulse of modern societies and economies.

The cost of this project can no longer be ignored. As is customary, Davos sees the release of the latest, greatest statistics on the failures of the prevailing economic model. Just over 40 people (nearly all men) now likely hold more wealth than half of humanity, with 82% of global wealth generated in 2017 going to the wealthiest 1%. In the UK, FTSE 100 bosses earn, on average, 120 times more than employees. These are the symptoms of a system that relentlessly minimises costs to maximise shareholder returns, eroding workers’ rights and exerting enormous influence on policymaking and political ideas. In 2000, Bill Clinton addressed Davos, the first sitting US president to do so, and expounded the virtues of globalisation as a unifying economic and social force. It is apt that Trump – a president whose position is partly a result of the hatred frothing from the dispossession and corruption bred by neoliberal policies – was the next president to do so.

As Trump brings the circus, bullish global markets belie the true global economic picture. Ten years after the Crash, its lessons remain largely unlearnt as optimistic investors commit the oldest sins in the newest ways and stock markets break records. Comfort breeds complacency and the word on the snowy boulevards of Davos was that another serious correction is coming. As younger generations gaze upon this spectacle – many of them from countries were youth unemployment still exceeds 30% – they could be forgiven for concluding that those in power are in charge only inasmuch as it serves them to be.

The environmental story

But the greatest tragedy of neoliberalism may be that it dominated our thinking over the period in which we had a final chance to halt catastrophic environmental change. Human activity has always impacted the natural world but the severity and reach of these impacts has accelerated exponentially over the last few hundred years, at least since Western powers began to establish colonial empires. With the advent of industrialisation and the first wave of globalisation in the 1800s, these impacts began to increasingly alter the functioning of the great biogeochemical cycles that facilitate life on earth. By the 1970s, as the global population reached 4 billion, the consequences of these impacts became evermore obvious, with our understanding enhanced by scientific advance. The decade of the seventies saw awareness of the growing crisis reach a mainstream audience, helped by landmark studies such as the Limits to Growth. Recurrent energy crises over the decade provided the economic pressure to seek more efficient, sustainable technologies, at least in providing alternatives to oil.

But these crises also sounded the death knell of the post-war social democratic era, providing the platform upon which an emboldened neoliberal movement could win arguments and, as the eighties began, power in the UK and USA. The neoliberal policies that have dominated rich nations and the global development paradigm ever since seek to maximise profit, usually through consumption, by extending markets across the world and minimising cost, particularly that arising from regulation. In segmenting environmental degradation as an external cost and insisting on the inadequacy of all incentives but the pecuniary, neoliberalism’s theoretical basis set the conditions for catastrophe. In practice, the relentless lobbying and legitimisation of regulatory arbitrage and tax avoidance has eroded state functions at precisely the moment they were needed to resolve the coordination problem at the heart of global environmental change.

In the 40 years since neoliberalism sought and won power, a third of arable land across the world has been lost. Around two thirds of vertebral life has died. Agricultural practices have disrupted the nitrogen cycle more than at any point in its 2.7 billion year history. Ours is the age of the Sixth Mass Extinction, the last being  that of the dinosaurs, the rates of which are exacerbated by climate change. According to the UN, the rate of toil soil degradation means there may only 60 global harvests left. In all, human activity has pushed environmental systems into ‘unsafe’ operating spaces, threatening the preconditions upon which civilisation can flourish, or even exist.

Societies are already feeling the effects, with a causal link being established between climate change driving a higher incidence of extreme weather, the resultant damage to crop yields, and the stress imposed by rising food prices in regions with already fragile socioeconomic positions, particularly in the Middle East and North Africa. In Davos, the yearly World Economic Forum risk report now regularly warns of ‘profound social instability’ resulting from a complex web of factors, ranging from economic crisis to migration, all of which are magnified by environmental degradation. Risk is becoming increasingly systemic, compounding and threatens non-linear outcomes. In response, institutions must become more resilient or global cooperation could be threatened as nations turn inwards to protect their interests.

What next?

As we have seen, parts of these stories are recognised by Davos’s organisers and guests. This year’s theme was “Creating a Shared Future in a Fractured World Inequality” and there was no shortage of panel discussions on inequality, climate change, short termism, fake news, the gender gap. As is customary, these discussions are predominantly conducted behind closed doors and between old men. In turn, media commentators grasp for engaging metaphors and snappy headlines to enliven the whole affair. This year’s favourite concerns the heavy snowfall and the increased threat of an avalanche engulfing the hapless participants of the ‘New Consumption Frontiers’ panel. There is strength in this metaphor, particularly from the perspective of younger generations, who look around aghast at the unfolding catastrophe brought about by the twin stories of the neoliberal era and environmental decline.

On the former, the status quo’s crisis of legitimacy is increasingly infecting its intellectual basis, with parties of both traditional left and right seeking to capitalise on the growing backlash against neoliberal ideas. In the UK, the 2017 election result and the clear depletion of the Conservative party as a governing and intellectual force stokes coals of excitement across the resurgent left. This is welcome, at least in that the Labour party and its hinterland are engaged in a process of disruption and intellectual innovation. Most notably, the voice and energy of younger generations sits at the heart of this project, which is essential, as it is they who must deal with the wreck of neoliberalism.

But the most damaging legacy of older generations is far worse than the loss of institutions, employment rights and social cohesion. As we get excited about moving beyond neoliberalism, we have to understand how the degradation – and maybe even collapse – of natural systems will dominate what is and is not possible into the future, whether our politics catches up or not. Recently, a special UN report on the chance of global warming reaching 1.5C was leaked. A working conclusion is that this could happen by the 2040s. This is also the decade that, dependent on a number of factors, soil fertility may be lost across most of the world, robbing nations of the ability to grow nutritious, or indeed any, food. The millennial generation will be in their forties and fifties by this point and will therefore have to deal with this grave new world. Nothing short of a global socioeconomic transformation to ensure the sustainability of human activity over the lifetime of the millennial generation is required. Even without the damage to economies and societies wrought by neoliberalism, this is arguably the most difficult task ever faced by humanity.

Thankfully, and to the credit of older generations, this transition is already underway. But time is running out and we must transition more quickly from opposition to proposition. In response, more and more young people are entering debates and positions of responsibility, facing up to the full reality of the task in front of them. In doing so, they must work closely with older generations, to learn from what they did well and what they did wrong, co-creating a leadership suitable for an uncertain future bolstered by welcoming stories of hope and redemption. Greater diversity and equality of representation from across the world is needed to combat what is and will remain a web of global problems – and must break through the artificial barriers being erected in the last throws of a dying order. We must not forget that we are more connected, more knowledgeable and more capable than at any point in human history.

Each year, Davos provides a platform for the world’s leaders to debate important issues and spur action at this crucial moment. But by being ignorant to the two greatest stories of the day, it does nothing of the sort, squandering time and resources. The hour is late, and Davos’s time is up.

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How can we face up to the enormity of environmental collapse? How can we collectively build a politics for the Anthropocene? Laurie Laybourn-Langton interviews activist and former climate diplomat John Ashton.

Laurie Laybourn-Langton (LL-L): You’ve been at the forefront of combatting climate change through your role at the Foreign & Commonwealth Office and by founding E3G, the climate change thinktank, among others. The concept of the ‘Anthropocene’ goes beyond climate, to bring in the wider picture of environmental degradation and its causes. Is the word a useful addition to the vernacular to provide focus in a way that climate change or the environment, arguably, did in the past?

John Ashton (JA): I would argue that the idea of the Anthropocene goes further. It’s about the relationship between human beings and nature, but it’s also about the relationship between human beings and each other. The ecological fabric and the social fabric are inseparable. You can’t address a problem unless you can talk about it, and you can’t talk about it unless you can name it. But my gut feeling is that the word ‘Anthropocene’ is never really going to be part of anybody’s vernacular, but at least it plants a flag in the ground.

I think it will be much easier to build a politics of the Anthropocene from the left because of its focus on collective responsibility and justice. For me there is nothing more fundamental to the Anthropocene than trying to address the enormous injustice which is inherent in the way we collectively conduct ourselves at the moment.

We have built a political and economic system which is based on plunder, and the most heinous example of that plunder is that which is being and has been carried out by my generation – I am 60 years old. We’re not wrecking our futures nearly as much as we’re wrecking the future of your generation. Your generation can no longer take it for granted that you have a prospect of a better life than mine, whatever that means. This is an extraordinary conclusion to be reaching because it would represent a collapse of everything we thought we had built, particularly with and since the Enlightenment. If I were your age, I would probably be fearful of the future rather than looking forward to it.

LL-L: There is a view that, in an era of potentially exponential environmental change, exponentially accelerating technical ability will enable us to address it. Therefore, we will be fine because we will invent our way out of the problem. Do you agree?

JA: I think that’s nonsense. It’s based on an impulse to respond to the problem through blind faith rather than through serious attempts to understand the problem. Also, it has within it an implicit assertion that this is a future problem, not a current problem. It represents a colossal failure of imagination, maybe in some cases a deliberate failure.

Just to take one example, we have had for the last few years an average of something like an average of 10 people a day drowning in the Mediterranean in the attempt to reach the shores of Europe from Africa or the Middle East. This is part of a crisis which is unfolding now. It may not be unfolding for the people who are at the top of the big decision-making institutions in Britain, but it’s unfolding for an awful lot of other people.

These events come from a complex interplay of social and environmental factors. Although those of us who live in cities in industrialised countries have built a certain amount of insulation from it, it’s not permanent insulation. We need to find ways of bringing the problem closer to the centre of our consciousness, not ways of holding it away from the centre. Our current language on the environment has become an obstacle. Natural systems are complex adaptive systems that have a tendency to self-regulate, but only when they remain within thresholds. Social systems are the same. Even neoliberalism asserts that the economy is self-correcting.

In the neoclassical economics that lies at the heart of neoliberal politics, the condition of the ecological foundation is not a fundamental concern. If you notice the occasional problem opening up, you just price it into the market and the price signal helps you correct. That doesn’t help you when you’re dealing with irreversible change. It doesn’t help you when you’re dealing with non-linear change. It doesn’t help you when you’re dealing with thresholds of resilience. If you cross the threshold, a system that was once resilient suddenly becomes non-resilient. For heaven’s sake, we ought to have learned that lesson from the [2008 financial] crash, because that applies to the financial system as well.

This is a theory which has no longer any useful application in terms of the practical challenges that politics faces and that societies face, but it remains far too embedded – and both explicitly and implicitly – in the way people in positions of leadership behave, all the time.

LL-L: Britain is ostensibly seeking to work out what its role in the world is. Do you think it could have a positive role on the world stage by helping people understand the scale of breakdown, and in mobilising action?

JA: It would have been much easier to say “yes” in response to that question a few years ago, even seven or eight years ago, than it is to say “yes” now. For a number of years, British climate diplomacy was my life. We didn’t do it from scratch; we stood on the shoulders of previous generations of politicians, officials, activists. But by 2010, or so, we had a sense that no country was being more influential around the world in building the foundation for a successful diplomacy of climate change than Britain was. This included the soft power that we’d inherited generation from generation, the fact that our climate scientists were contributing to the scientific debate disproportionately and were respected around the world. But our diplomacy was making a difference too, for example when we took climate security for the first time to the UN Security Council. For a while, we had a disproportionate impact.

Small and medium-size countries can have a big influence on the world if the right conditions prevail and they use their diplomacy wisely. You have to have a culture and disposition towards cooperation. In the last few years, it seems to me British discourse has moved away from the idea of cooperation. Brexit, and the way the conversation is being conducted, illustrates that. It’s moved away from the idea that we need to be rooted in reality rather than points of view that have their roots in blind faith. That means at the moment, I fear, it would be very difficult for Britain to play a significant, certainly a disproportionate, role in constructing a diplomacy of shared interest in sustainable development fit for the Anthropocene. It’s a tragedy because it’s a mindless squandering of diplomatic assets; you can lose in a few minutes what it takes years to rebuild. I’m afraid that’s where we are.

But diplomacy isn’t just about what diplomats do; it’s about the entirety of the conversations that we’re having in our society with each other, and with people outside our society and what they see of the conversations we’re having with each other. It may be that the most effective piece of Anthropocene diplomacy that we can do is to try and work out how to build a politics of the Anthropocene which can be scalable and which can start to influence others, which could be a reference point for others who are trying to do the same thing in their societies.

LL-L: At the moment, are there any narratives that could be particularly useful at drawing people into this debate? One example could be around health. Take air pollution – dealing with traffic and transport in cities has shot to the top of the agenda because people can comprehend the health effects. Are there any of these narratives that could draw people in, health potentially being at the top?

JA: The first question is: what do people care about? Not, how do you make them care about the Anthropocene? People care about their health and the health of their children. They care about what they eat. Look at the awful things that we keep learning about the way in which what we thought was a healthy and trustworthy food chain keeps being corrupted by people who are cheating and manipulating their freedom in the market in order to get away, potentially and almost literally, with murder.

I think in both of those areas there is scope for collective action, for bottom up building of projects that can help to take us in the right direction – in some cases very community based, where you go street to street. If you asked me, “How would I start if I were of your generation, if I wanted to play a role in building this?” I think I would say, “organise a group of you, wherever you happen to be. Start knocking on doors and finding ways in which you can help to solve problems for people who are in difficulty, people who are vulnerable, that aren’t being solved by the way the system is working.” With roughly a million people now resorting to food banks every winter, there are plenty of people who I think might be interested in a serious kind of street-by-street engagement. All successful political movements start like that. That’s the ground that our ‘mainstream’ politics has vacated. Is the emergence of Momentum a sign that this might be about to change, at least on the left? It depends in the end on whether it can make people up and down our country feel that politics can after all be something that is done with them, not something that is done to them.

A society which is coming to grips with the challenge of the Anthropocene is also going to be a society in which we care for each other when we need care. This is how we become part of a society in which humans are more than just a collection of atomistic, utility-maximising agents in an economic model. If we’re not caring for each other, we’re not going to be dealing with climate change; we’re not going to be dealing with ecosystem degradation; we’re not going to be addressing the drivers of mass migration at their roots. This is a comprehensive reshaping of politics.

LL-L: What kind of narratives would you like to bequeath to a younger generation to make sure we basically keep up our morale as we try to sort this out? What should get us up in the morning?

JA: The belief that together you have agency and the capacity to use your voices to repair the damage which is currently being done, and to start the healing and the building of the better future. This requires boldness and action. There’s room for lots of different projects, and activities, and types of mobilisation in different areas of society, but it’s just about coming together and doing that – having conversations that lead to action. The more you build in those conversations, the more inspiring they become and the more you believe that collectively you can build a critical mass.

One asset that young people have more so than my generation is moral authority; you can point out that the mistakes that my generation have made and make are going to shape much more of your future because you’ve got more of your future ahead of you. That’s the reason why we need to listen to you, and make it as easy as possible for you to draw on our accumulated experience.

Your generation would be justified in being angry, but actually that’s not going to get us very far. I think a more fertile conversation is to say to us, “we would like to enlist your help in building something very different from what you built, because that’s what we now need.” My generation don’t want to be thought of as not caring about our children’s futures – because we do – and so appealing to that would be quite a smart thing to do. You need our knowledge of how the system works and how the institutions can rapidly evolve into better institutions, because not everything is bad in our institutional framework.

LL-L: My generation might be, in many respects, terrified. It’s also got to be determined and it’s got to be hopeful. Do you think it should also be excited?

JA: Yes, hugely. But I don’t think terror is a helpful response, although I can understand why some people feel it. I don’t think we know enough to be sure that we will fail. I think there are grounds for at least entertaining the possibility that we can succeed.

That means that there is no alternative but to invest in that success; this is the most exciting project. It’s a cultural project, a social project, an economic project, a political project. It seems to me that this is the most exciting project that humanity will ever have embarked upon, no less significant for example than what we now call the Enlightenment. This is about building, for the first time in history, a capacity for collective self-awareness, a sense of shared identity, and a political expression of our common will in pursuit of our common interest – not only as nations, tribes and social groups but as the species whose ancestors first ate of the fruit of the tree of knowledge. That’s what would get me up in the morning if I were your age. That’s what still gets me up in the morning now.

This is an abridged version of an interview published in IPPR Progressive Review.

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In the run-up to the second anniversary of the Paris Agreement and in parallel to the UN Climate Convention in Bonn, climate justice campaigners and lawyers from six continents met to co-ordinate five clear legal demands for local, regional and national governments. The five demands are that legislators:

1. Acknowledge the climate emergency in national constitutions
2. Recognise that failing to reduce greenhouse gas emissions knowing the contribution these gases make to climate change is an act of ecocide
3. Provide all citizens with the legal tools they need to obtain climate justice
4. Introduce a legal requirement that greenhouse gas emissions associated with imports also be included in national and regional reduction targets
5. Better regulate the activities of multinationals in particular by ending subsidies for fossil fuels.

Why these five?

Local, regional and international law still prioritises private financial interests and a narrow definition of unsustainable economic growth over the public interest in minimising climate change. For example, it is estimated that current and planned airport expansion projects are estimated to involve USD1 trillion in investment over the next four decades, yet legal opposition to airport expansions on the ground that these will automatically increase greenhouse gas emissions is held to be an insufficient reason to limit this expansion.

Although the climate is one of the natural commons along with air and water, Marie Toussaint of ‘Notre Affaire à Tous’ says:

“What is really surprising and striking is only 100 companies are responsible for over 70% of emissions since 1988 when we already knew [about climate change] and still they are not punished for anything. We cannot prevent, we cannot repair. We cannot punish the people who destroy our planet. For this we really need a crime of ecocide to be recognised. We need this to first prevent them and then to condemn them for destroying the planet for other people.”

Legal recognition that knowingly emitting greenhouse gases is an act of ecocide will enable citizens to prevent, punish and obtain damages from those responsible. There is still no adequate legal mechanism for victims to defend their rights, obtain reductions in greenhouse gas emissions, hold those responsible to account or obtain compensation from them. The United Nations Environment Programme Law Division in its most recent review of priority areas for action noted that:

“[T]there is no international legal framework for the protection of the atmosphere of the planet in its entirety.”

Although this review pre-dated the Paris Agreement in December 2015, the ‘soft-law’ nature of the Paris Agreement still falls far short of establishing a crime of ecocide under International Criminal Law and fails to make the link between climate change and human rights law.

The inclusion of greenhouse gas emissions embedded within imports will prevent developed states from claiming they are meeting their pledges under the Paris Agreement whilst still contributing to an overall global increase in emissions. For example between 1990 and 2014 emissions produced within the EU decreased by nearly 30% whereas emissions produced in China increased by 310%. During this period EU imports from China increased considerably – between 2006 and 2016 alone the value of these imports increased by 75%.

Regulatory regimes remain weak and states continue to subsidise activity that contributes to climate change. The European Parliament’s own 2017 analysis of fossil fuel subsidies estimates that they are currently between 39 billion to over 200 billion euros per year, and makes the following admission:

“These significant figures indicate a lack of coherence between the EU’s energy and climate mitigation – correct price signals are important for Europe’s climate policy goals, hence phasing out fossil fuel subsidies is important in order to help align energy prices with environmental goals.”

Why make the 5 demands now?

Time is running out. In November the World Meteorological Organisation forecast that 2017 will be the worst year for the effects of climate change. The social, political and financial costs of climate change are escalating. In particular, extreme weather conditions, climate change refugees and the nativist populist backlash against migrants are increasing. Although it is still difficult to estimate the total number of people already harmed by climate change a number of organisations, for example Oxfam’s November report on displacement by climate change, are beginning to compile data. Even though the UN’s Refugee Agency (UNHCR) wanted the issue to be constructively addressed in Paris in 2015 we are still waiting for a joined-up approach to the two crises.

It is two years since the Paris Agreement, but according to reports published in November by the international research consortium Global Carbon Project, global CO2 emissions from fossil fuels and industry will rise by 2% this year. Emissions rose in 101 countries that together represent 50% of the emissions. China, the largest producer of CO2 emissions, is expected to increase its emissions by 3.5% this year.

We are running out of time to answer the key questions. Who is going to pay? How much are they going to pay? And when are they going to start paying?

The actions of the recently elected Emmanuel Macron are a good illustration of the way in which our attention is being diverted to ‘investment’ and ‘business opportunities’ while the question of compensation for loss and damage suffered to date is being ignored. President Macron has positioned himself as a world leader on climate change. He co-hosted the One Planet Event on the second anniversary of the Paris Agreement to “find new ways of financing the adaptation…and of ensuring climate issues are central to the finance sector.” However critics point out that he has still not yet accepted the underlying need to change the French legal system.

President Macron is not the only politician to avoid awkward questions, and of course this squeamishness is the underlying reason for the ‘soft’ voluntary nature of the Paris Agreement. It may be that turning a blind eye to past and current injustice is a price worth paying to begin to turn the system slowly around, but many are concerned that simply promising to make green investments in the future is not enough.

For example, the European social model has to a degree mutualised the risks of unemployment and health but not environmental damage. Marie Toussaint explains why this needs to change:

“Today when we look at environmental impact then we see that it’s all individual insurance that can cover what happens and then we have some systems, like the EU funds, that they put when there is a natural catastrophe but first of all you don’t have anything for the slow destruction of the environment … Then, with individual insurance the contributions are paid by potential victims but there is no way for the people who caused the damage to contribute. We don’t have the ‘polluter pays’ principle [Principle 16 of the 1992 Rio Convention on Environment and Development]. We really need to have that settled at the national, European and international level.

 

“The heads of state are beginning to say ‘OK for the moment we’re covered but at some point global warming will prevent us from paying because we won’t be able to pay any more for this big, big destruction.’ At some point the insurers won’t be able to pay anymore and we don’t have this solidarity and it’s going to be worse and worse for the victims. So we really need to have this new solidarity put in place at an international and at a national level.”

The UN Climate Conference in Bonn has led to several initiatives to provide some financial support to some victims, but there is still no move to assess the total costs of climate change. This includes the loss and damage to private and public property, health, ecosystems and cultures that depend on them; the current ongoing costs of dealing with this loss and damage; and the current ongoing costs of adapting and becoming more resilient to the future consequences of climate change. We also need to ask who is currently benefitting from the funds that are being made available.

Even when wealthy governments do provide state aid it is usually used to redevelop areas previously destroyed by an extreme weather event, which is therefore at high risk of being destroyed again in the future. Citizens can then become trapped by the state in an unsustainable and worsening cycle of extreme weather event/destruction/rebuilding. Such state aid can even have the negative consequence of fuelling construction booms in luxury coastal real estate, as has happened in the five years after Superstorm Sandy hit the US New Jersey coast. Finally, state disaster aid is always vulnerable to being cut or withdrawn on the grounds that it is needed to fund other state expenditure, so it cannot act as reliable compensation for climate change loss and damage.

For those who have already experienced loss and damage, talking about future investments misses the point that climate change justice is not only about money but fundamentally a question of changing the system. A culture that protects and prioritises the right to emit greenhouse gases over all other rights must change. The five demands of legislators outlined above are a necessary part of bringing about this change.

How to find out about your nearest legal proceedings?

The organisers of the five demands are all involved in legal action to obtain climate justice. Examples of ongoing legal proceedings are: the Our Children’s Trust cases in the US; the Global Legal Action Network crowd-funded case in the European Court of Human Rights, and the Peruvian Farmer’s case against the German Energy Company RWE.

The LSE’s Grantham Institute is collecting a database of non-US legislation and litigation. The largest database of climate change litigation is held by Columbia Law School’s Sabin Centre which includes both US and non-US litigation. All citizens are asked to participate in any local climate change legal proceedings.

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If you hoped that 2017 would be the year Britain finally saw its economic fortunes improve, you were soon to be disappointed. Over the past twelve months, Britain’s economic malaise has continued: investment remained the lowest among advanced economies, productivity stagnated yet again, real wages declined even further, and households relied on ever-growing levels of borrowing to maintain living standards. Combined with an intensifying housing crisis, disintegrating public services and looming environmental catastrophe, the picture that emerges is not one of economic recovery – but of deep, existential crisis.

It is within this context that we enter 2018. As if these challenges weren’t enough, this year the UK government also faces the small task of delivering Brexit and navigating a path outside the EU. The magnitude of this task cannot be understated: Brexit entails a once-in-a-generation reshaping of our laws, trading relationships and economic model. The path is fraught with risk and uncertainty, and the decisions made will have major repercussions for decades to come.

Like it or not, 2018 is set to be a year of change. With so much at stake, what are the most important economic issues to mobilise around? Here are five suggestions:

1. A progressive trade policy

Following the passing of the EU Withdrawal Bill in December, attention is now turning to the UK’s future trade relationship with the EU and the rest of the world. This is a critical juncture: trade policy cuts across many aspects of our lives – from how we run public services like the NHS, to how we set food standards. Agreeing trade deals is notoriously difficult, and highly controversial. It’s not at all clear that the UK government is up to the task.

So far the headlines have been dominated by David Davis’s posturing about a prospective UK-EU trade deal. While agreeing a sensible deal with the EU should be the top priority, perhaps a bigger threat comes in the form of Liam Fox’s Trade Bill, which so far has attracted far less attention. Published back in November, the Trade Bill will allow the British government to negotiate new trade deals after Brexit. As Nick Dearden wrote here back in November: 

“If you were worried about US-UK trade deal TTIP, you need to take Liam Fox’s new Trade Bill seriously. If it isn’t amended, we have every reason to fear a ‘TTIP on steroids’ is coming our way. The Trade Bill will allow the British government to negotiate trade deals after Brexit. It is our only chance to make sure that these deals done will be open, democratic and accountable. And we only have a few months to do it.”

In 2017, we got a taste of some of the issues that trade deals can throw up (remember when Liam Fox told us not to be afraid of US chlorinated chicken?) – but as things stand we won’t be told what else might be sacrificed. That’s because, in its current form, the Bill ensures that trade policy will not be subject to any kind of public or democratic oversight. As Dearden continues:

“As things stand, MPs have no right to know what’s going on in these talks – or the talks that Fox hopes will commence with 16 other countries including human-rights bashing Saudi Arabia and Turkey. MPs can’t set any guidelines for Dr Fox. Once he concludes a trade deal with any of these countries, they can’t amend or stop that deal.”

The clock is already ticking. There is an urgent need to build consensus around what a progressive trade deal in the 21^st century looks like, and to ensure that any negotiations are subject to appropriate democratic oversight. Regardless of your political persuasion, we simply cannot afford to leave our future in the hands of someone like Liam Fox.

2. Meaningful financial reform

It’s been a frustrating few years for those of us who have been working to put meaningful financial reform on the agenda. After years of watching the limited reforms introduced after the financial crisis being watered down or rolled back, in December 2015 the Bank of England Governor Mark Carney declared that “the post-crisis period is over”. The message was clear: the financial system had been fixed, lessons had been learned, and it was time to move on.

But this return to “business as usual” was premature. The human and financial costs of the crisis are still being felt across the country, and scarcely anyone believes that the post-crisis reforms went far enough to prevent it from happening again. As I wrote back in August:

“As memories of the crisis fade, it is essential that civil society doesn’t roll over to the demands of bank lobbyists. Many experts outside the industry-regulator nexus warn that financial reforms went nowhere near far enough, and have predicted that another crash could be just around the corner. The Systemic Risk Council, a group of global experts on financial stability, recently warned G20 leaders that the global financial system is vulnerable to another crisis. This time round, they warn, central banks and governments will have far less ammunition available to respond.”

In 2018, many key events of the financial crisis will be marked by their 10 year anniversaries – from the collapse of Lehman Brothers to the bailout of RBS. Various civil society initiatives have already been established to capitalise on the ‘10 years after’ moment and put meaningful financial reform back on the political agenda. These include the ‘10 Years After the Crash’ project by PEP and the RSA, Finance Watch’s ‘Global Change Finance Campaign’ and a major conference being organised by the Transnational Institute.

With the Brexit negotiations heating up, the stakes are even higher. As more banks threaten to shift operations abroad, the government has indicated that it may respond by slashing regulation in a bid to stem the outflow of business. Bank executives and lobbyists are already working hard behind the scenes to turn Brexit to their advantage.

To avoid history repeating itself, there is a vital need to develop a credible and effective counterweight to the lobbying power of the banks, and work to transform our broken financial system to ensure that finance serves society, not the other way around.

3. Action on the housing crisis

In 2017, the Grenfell tragedy brought Britain’s housing crisis into sharp focus. Social housing tenants burned to death due to a lack of basic safety standards, while a few hundred metres away some of the world’s most expensive properties lay empty, acquired only as speculative playthings for the world’s super rich.

Grenfell was only the tip of the iceberg. Britain’s housing crisis is rapidly becoming one of the greatest policy failures in living memory, and the consequences for the economic and social fabric of the country are immense. After Grenfell, people have slowly been beginning to wake up to the scale of the problem. As Christine Berry wrote for us back in June:

“the spotlight is turning onto the human cost of our dysfunctional housing market, and it must be kept firmly on it until we start to turn houses back into homes, rather than simply financial assets to be speculated with.”

I’ve written extensively about how to fix Britain’s broken housing market. But proposing policy solutions is the easy bit. The real challenge is one of political economy: the drive to increase homeownership over the past fifty years has created an electorate where the majority’s personal wealth is tied to the buoyancy of the housing market. Although homeownership has been falling for over a decade, most of the electorate (63% of households) still have a vested interest in seeing housing perform well as a financial asset. Politicians have faced a tension between resolving the problems of supply and affordability for non-homeowners on the one hand, and maintaining the asset wealth of existing homeowners on the other. Time and time again, their actions have prioritised the latter — to the great expense of renters.

But with homeownership rapidly becoming a pipe dream for most young people, and the number of people renting privately skyrocketing, a tipping point has now been reached. A broad coalition comprising those stuck in the private rented sector, social tenants and concerned homeowners would be a powerful voice. If mobilised effectively, 2018 could be the year when Britain’s housing crisis finally starts to be addressed.

4. Breaking with neoliberalism                                

In November, the UK government published its industrial strategy. While the content is far from perfect, its publication marks a historic moment. The fact that a Conservative government has published a document which hails “a belief in a strong and strategic state that intervenes decisively wherever it can make a difference” is hugely symbolic. It represents the end of neoliberal orthodoxy’s role as the dominant intellectual force underpinning UK economic policy, after 40 years in the driving seat.

The rejection of neoliberal orthodoxy by both major UK political parties, combined with the intellectual upheaval underway in the economics profession, means that we are on the cusp of an epochal shift in economic thinking and policy. The question is what comes next.

There is already a broad movement spanning academia and civil society that shares a common diagnosis on the failings of neoliberalism, and a growing convergence on the need for an alternative rooted in inclusivity, sustainability and democracy. As Laurie Laybourn-Langton wrote here back in November:

“This movement is growing and we think it now covers most of the major functions required to shift the paradigm – from academic groups and think tanks, through communications websites and supportive networks, to funders and political figures. Each year, this movement becomes more influential and is full with talent stretching across generations.”

There remains much to be done to bolster the intellectual underpinnings, policy development and communications infrastructure required to make the transition from one political-economic paradigm to another. 2018 should be the year when these efforts shift into the next gear.

But making a definitive break with neoliberalism also hinges on developing a critical mass of political support. As Nick Pearce wrote for us back in November:

“Who will be the political agents of economic transformation, and how can broadly based coalitions that unite the interests of low- and semi-skilled workers with those of middle-class professionals be created? The decline of the industrial working class, the rise of finance and decline of the UK “national” business class in core sectors, the spread of the gig economy and the parallel growth of higher education as a social insurance policy for the middle classes, coupled with the electoral dominance of a socially conservative older population, have all made the task of constructing progressive economic reform coalitions much harder.”

It’s clear that the methods of the past are no longer fit for purpose. New approaches are needed to mobilise political support for economic transformation among an increasingly diverse and splintered electorate. Glimmers of what this might look like came in the form of the ‘Big Organising’ model pioneered by the Bernie Sanders campaign in 2016, which was also used to great effect by Momentum to mobilise young voters in last year’s general election. But Labour’s defeat shows that more still needs to be done to convince voters that change is needed. 2018 provides an opportunity to build on these successes and broaden the base of support for transformative change.

5. Stepping up the fight against climate change

 Given the scale of the above challenges, it’s easy to forget about the greatest challenge of all – the fight against climate change. Despite some positive developments in recent years, the hard truth is that we are still hurtling headfirst towards global climate catastrophe. As my colleague Adam Ramsay wrote for Civil Society Futures in June:

“Civil society organisations have mobilised across the country – and the planet – to demand ambitious action on climate change. And yet new fossil fuel projects continue to attract investment. Communities across the world face ever more extreme weather. The planet continues to warm. While there are many positive things to say, honesty requires acknowledging a simple truth: civil society, as it’s currently structured, has failed to stop climate change. And we’re still failing.”

What to do about this? Jamie Clarke, Executive Director of Climate Outreach, says that the climate movement must learn lessons from past failures, and take a fundamentally new approach:

“We need a mass, society wide, long term, sustained effort to keep the fossil fuels in the ground… And we need to make sure in 10 years’ time the new government doesn’t decide to change the policy. We need to shift the way society thinks about fossil fuels that make them morally, socially, and economically unviable and that’s a balance that our society has very rarely managed to do. The only equivalent is something like banning the slave trade. It took a mass-mobilised group of people, direct action from slaves and those impacted, and a moral shift and understanding that this was abhorrent.”

This means ending the presentation of climate change as an environmental or lifestyle issue, and reinforcing its status as an economic, political and – most critically – a moral issue. On a practical level, it means moving away from campaigning on climate change as a standalone issue and instead assimilating it into all progressive struggles. Working with other stakeholders to place environmental concerns at the heart of the four issues mentioned in this article – trade policy, financial reform, housing policy and replacing neoliberalism – should be a priority for 2018.

***

With so much at stake over the next twelve months, informed public debate is more important than ever. But for the most part the media has failed to engage in these debates, or even acknowledge the scale of the challenges we face. That’s why at openDemocracy we are bringing people together to get to grips with the long-running economic crisis unfolding in Britain, and stimulating a debate about a sensible way forward in 2018. Join the conversation.

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In the light of Brexit, can a new coalition of social class and territorial interests mobilise to deliver a meaningful industrial strategy?

This week, the government published its Industrial Strategy. It is a hefty document, weighing in at 255 pages, and clearly the product of many months of analytical and policy development work. Like most such papers, it is littered with the mini-reviews, micro initiatives and small spending pots that characterize cross-departmental policy documents. The prose is occasionally tortured by the Whitehall compromises it embodies. But it has a thematic coherence, drawn from a focus on tackling the UK’s productivity problem and proposals to orient economic activity strategically towards four “Grand Challenges” of an ageing society, the transition to a low carbon economy, mobility, and AI and the data economy. This focus on societal missions, some big increases in R & D spending, and the recognition that governments have a strategic role in shaping economic growth have pleased advocates for industrial strategy. It has been broadly welcomed.

The government’s white paper follows hard on the heels of two important contributions to industrial strategy policy, the first from the Commission on Industrial Strategy, established by the Universities of Manchester and Sheffield and chaired by Dame Kate Barker whose final report was published a few weeks ago, and the second, a discussion paper from the Institute for Public Policy Research (IPPR) Commission on Economic Justice.

Each of these sets out, in different ways, the persistent weaknesses in the British economy that justify a strongly articulated, non-partisan and consistently delivered industrial strategy: poor productivity performance, low rates of business investment, regional imbalances, chronically weak export performance, and poor diffusion of skills, R&D and innovation. These are familiar and largely indisputable lists.

Barker’s Commission on Industrial Strategy refrains from describing these weaknesses as symptoms of a deeper neo-liberal malaise or characteristics of a fundamentally broken British economic model; it positioned its report to appeal to policymakers across the political spectrum and its analytical framework reflects that.

In contrast, the IPPR contribution is directly addressed to the construction of a new economic model. It believes that the UK’s economy is governed by a neo-liberal intellectual paradigm that has manifestly failed and is on its way out, in academia as much as the institutions of economic policymaking. It adduces the government’s new industrial strategy as further evidence of the paradigmatic transformation in economic thinking that is underway.

Universal Basic Infrastructure

Like the government’s white paper, both of these contributions address policy frameworks and instruments that typically fall within the ambit of industrial strategy: infrastructure investment, innovation and R & D, skills, and regions (or “place” in the government’s parlance). Perhaps the most eye-catching feature of the Manchester and Sheffield report – doubtless a consequence of Diane Coyle’s membership of the commission – is the call for the state to ensure that a Universal Basic Infrastructure is provided in every area as a social minimum offered to all citizens. In broad terms, this infrastructure would be “hard” (rail, bus, broadband) and “soft” (schools, health and care services). The proposal deliberately echoes but subverts the idea of a Universal Basic Income, which has attracted significant political attention in recent years. Infrastructure is more important than income, the report argues, in promoting the capabilities of citizens for economic development while regionally-balanced investment in infrastructure would do more to address exclusion from centres of economic agglomeration and growth than income transfers.

The UBI proposal overlaps with recent calls for Universal Basic Services, another intellectual and political route into debates about securing inclusive citizenship in unequal, open economies like the UK’s. It has some congruence too with the argument for promoting the growth of the “foundational” or “everyday” economy that has been developed in recent years by the Centre for Research on Socio-Cultural Change at the University of Manchester. Here the anchor institutions of the local state – local government, the NHS and so on – are used to underpin sustainable demand in the local economy by paying living wages and using public procurement to keep income circulating locally, in strategic partnership with non-tradeable sectors like retail, hospitality and catering. A Corbynite version of this approach has been pioneered, with some apparent success, in Preston, where procurement budgets have been used to buy locally provided services and farmed food, and where cooperatives and other forms of worker control are being encouraged.

What about the millions in low waged sectors?

It is noticeable, however, that the commission’s report says relatively little (aside from the significant health and social care sector) about the low-skilled, low-wage sectors in which millions of British people work. This is also a major lacunae of the government’s Industrial Strategy, which focuses almost exclusively on high value-added sectors. This oversight is not accidental: political economists argue that all governments have an interest in meeting the needs of high value-added businesses, but it takes particular kinds of political coalition to ensure that the needs of low- and semi-skilled workers are addressed. Whereas in Fordist economies the interests of these workers could be aligned with those of skilled workers, in post-industrial service economies these working class coalitions have broken down, often leaving the low-skilled without allies. This is particularly true of majoritarian political systems that have co-evolved with liberal market economies, in which high-skill, professional employment in services has grown alongside low-wage, low-skilled work in the non-tradeable sectors.

To its credit, the IPPR discussion paper pays much more attention to these low skill sectors, where it empirically locates the bulk of the UK’s productivity problems. Importantly, it advocates a new focus on skills utilisation, rather than familiar invocations to improve skills supply. There is considerable evidence that UK employers do not appropriately utilise the skills of their employees and do not integrate skills into the design of job roles and business capital investment strategies. In a flexible labour market with high employment rates, employers have less incentive to invest in skills training, and weak trade unions and limited coordination between firms ensure that vocational skills development and utilisation are historically under-developed in the UK, in common with other liberal market economies.

Pet schemes – or Nordic vision and lifelong learning?

In this policy area, the government’s industrial strategy is noticeably weak. It claims to overhaul technical and vocational education in terms that are wearingly familiar from official policy documents of the last forty years (and even further back). But it amounts to little more than the usual policy mélange of small funding pots for pet schemes and the reorganisation of qualifications. This is a mark of how limited Whitehall’s understanding of the political economic and institutionalist determinants of employment training in the UK remains.

In the Nordic countries, the persistence of coordinated economic management, large public-sector employment and PR electoral systems has ensured that the interests of low-skilled workers have been represented in governing coalitions (although in recent years, the rise of anti-immigrant parties has fractured social democratic political strength). Liberalisation in the labour market has been accompanied by significant rights to skills training and flexible working, and increased public and business investment in lifelong learning (see in particular, Kathy Thelen’s work on reforms in the Netherlands and Denmark in Varieties of Liberalisation and the New Politics of Social Solidarity). In contrast, in parts of continental Europe, dualism in the labour market has led to a weakening of social protection and employment regulation for lower-skilled workers in the domestic economy, while the core social bloc of the export sector interests remains politically predominant, symbolised in grand coalitions (although this is under stress, as the recent German election showed). Yet here too, skills investment and high productivity in the manufacturing and higher valued added service sectors ensures that low unemployment is combined with significantly higher per capita GDP than in the UK.

A coalition of workers’ interests?

These considerations raise important questions for advocates of industrial strategy in the UK: who will be the political agents of economic transformation, and how can broadly based coalitions that unite the interests of low- and semi-skilled workers with those of middle-class professionals be created? The decline of the industrial working class, the rise of finance and decline of the UK “national” business class in core sectors, the spread of the gig economy and the parallel growth of higher education as a social insurance policy for the middle classes, coupled with the electoral dominance of a socially conservative older population, have all made the task of constructing progressive economic reform coalitions much harder.

In piecemeal fashion, the spread of devolution may provide new openings. It is noteworthy that Wales and Scotland have PR electoral systems and strong traditions of social solidarity, and each is pursuing prototypical industrial strategies with the (still limited) tools at their disposal. And on the same day as the Commission on Industrial Strategy published its report, England’s seven metro-mayors met together for the first time to advocate for increased devolution of skills and fiscal policy. In the more complicated multi-level governance of the UK, new political coalitions could emerge.

But these developments are unlikely to generate national economic transformation of the kind envisaged by industrial strategy advocates. Brexit may yet provide the critical juncture through which a coalition for political economic change can be formed, though the task is a monumental one and Brexit hangs over the government’s industrial strategy like a dark cloud, without any silver linings. In 20^th century, transformative change was driven by the exigencies of depression, war or the exhaustion of growth models, and it was typically state-led. In the 21^st century, Brexit and the painful realisation of relative economic decline may provoke the kind of rethinking that has hitherto eluded Britain’s political-economic elites. The question is whether a new coalition of social class and territorial interests in the UK can mobilise to underpin the necessary changes. For industrial strategy advocates, the politics ought to matter as much as the policies.

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Ten years after the crash, the movement to replace neoliberalism is in the ascendency. Well organised campaigns cover everything from the promotion of pluralism in economic curricula to the application of new economic principles in local communities. Academics and campaigners, who prior to the crash were lone voices in the wind, have been joined by a growing chorus of economists and commentators acknowledging that neoliberalism is not working. Importantly, these now include those in mainstream institutions that have become synonymous with the status quo, such as the IMF and OECD. Meanwhile, bottom up movements, surfing a heady mix of social media and dissatisfaction with orthodox economic ideas, are beginning to score political victories across the world.

This is because neoliberalism – the broad set of political-economic ideas and policies which have dominated public life over the last 40 years – has failed, in both theory and in practice. It is in the wake of the global financial crisis that these failures have plumbed new depths. Financial instability looms over economies shackled by insufficient investment. Living standards stagnate and work becomes ever more insecure, shattering the implicit bargain of the entire endeavour. The human costs of this experiment have been enormous, with psychological and non-communicable ill-health becoming the hallmark of a system that cares for little but profit. Inequality, itself linked to ill-health, has grown to levels unseen since the nineteenth century, leading to large power imbalances throughout society. Socio-economic mobility has been further stalled by the erosion of the public realm, from universities to the legal system. Most pressingly, neoliberalism continues to rely on a growth model that is destroying the biophysical preconditions upon which it relies, increasing the chance of collapse in the climate and other natural systems.

Major changes in economic ideas have happened before

Despite this, neoliberalism remains the dominant perspective of most commentary and policy-making in the UK, countries around the world, and the global economic systems through which they linked. But its dominance may be illusory. Rapid changes in ideas have occurred at key junctures in the past. Over the last hundred years, Western political economy has broadly experienced two major periods of breakdown and transition from one political-economic paradigm to another: after the Great Depression and into the post-war consensus of welfare states and the Bretton Woods financial order; and after the crises of the 1970s and into the free market policies of neoliberalism that we live under to this day.

Across each period, the process of a shift to a new sets of ideas can be split into three components:

1. its intellectual and academic underpinning, particularly within economics;
2. the policies and narratives through which it was expressed in the wider public domain; and
3. the political processes – notably elections of governments – which enabled it to be implemented and entrenched.

When considering these components today, it appears the conditions are now apparent for another shift. Across the first, intellectual component, the failure to predict, understand and react to the financial crisis fractured confidence in key pillars of the orthodoxy. This included, for example, the ‘efficient market hypothesis’, which, by asserting that assets could not be consistently mispriced, led generations of economists to shamefully underestimate systemic risk in the financial system. Theoretical failures have been compounded by the inadequacy of policy prescriptions. Most notably, fiscal consolidation and monetary policies have not generated growth or reduced public deficits at the speed anticipated, and so have failed on their own terms. Indeed, elements of the economics profession have consistently found themselves unable to adequately explain a multitude of economic phenomena, ranging from stalling productivity to the impact of quantitative easing. Moreover, orthodox economics has little concern for the major crises of our time, from rising levels of inequality to global environmental change.

New economic ideas are proliferating, but a major shift is still not apparent

In response, a plethora of alternative economic insights have grown up, many of them building on schools that have always contested neoclassical or neoliberal orthodoxies, such as institutional and post-Keynesian economics. Some have emerged in response to particular failings of the orthodoxy, such as behavioural economics and its focus on more accurate modelling of human behaviour. Others pursue a deeper re-conceptualisation of the economy, including complexity economics, which applies complexity science in modelling the economy as a system in constant change, as opposed to equilibrium. However, economics is still dominated by orthodox neoclassical or neoliberal approaches.

While this is a function of the political dominance of these ideas, it also reflects institutional inertias within the discipline. Prestigious journals predominantly publish articles that adhere to the mainstream view, limiting the profile of alternative approaches. In turn, non-mainstream academics can become marginalised, further reducing their ability to publish work at the highest level. Meanwhile, economic curricula at secondary schools and universities remain grounded in the mainstream and so new generations of economists are largely moulded in the image of previous generations.

While these dynamics have attenuated the flow of new economic ideas into the second component of a shift – the development and adoption of counter-narratives and policy proposals – these have nonetheless emerged and built much credence in recent months. Few credible commentators and policymakers now defend the status quo, falling instead along of a continuum of voices calling for reform. Even think tanks who, only a couple of years ago, were staunch supporters of key tenets of neoliberalism now find themselves arguing for change. This became starkly apparent in the 2017 Conservative Party manifesto, which claimed that the party now “… rejected the ideological templates provided by the socialist left and the libertarian right and instead embrace[d] the mainstream view that recognises the good that government can do”.

It is unclear how serious this view is, or how long it will last, but it suggests that a critique of neoliberalism is starting to embed itself into thinking across the political spectrum. Indeed, throughout the West, most government and opposition parties now found their rhetoric on a critique of the status quo. The results differ widely, of course, from the accelerated dismantling of what remains of the New Deal under Donald Trump, to the nationalisation policies of Jeremy Corbyn’s Labour party. And so we see that the third component of a shift – the embedding of a new political-economic paradigm through the election of a supportive government – is not yet apparent.

Change is driven by an ecosystem of influential organisations and individuals

How does a paradigmatic shift come about? Change of this scale is conditional on events that erode confidence in the status quo and heighten the legitimacy of alternative ideas. But it is also a function of the preparedness of those movements espousing an alternative. The conditions for change may come by chance, but the change is won by those most prepared to capitalise on crisis. Those seeking a shift away from the post-war consensus knew this and developed an ecosystem of influence to increase the chance that their ideas would win the day if and when crisis came.

This movement started by focussing on academic ideas, founding the Mont Pèlerin Society to provide a safe space for academics to play out their opposition to a catch-all ‘collectivism’. Members were united in their conclusion that an increased role for the state in economic and social management was incompatible with individual freedom. Around this assertion, they eventually built a coherent narrative and policy proposals that were prosecuted by a well-resourced ecosystem of institutions and networks mobilised to influence public debate and political processes. At its heart was a new breed of ‘knowledge professional’ located within the modern ‘think tank’, politically partisan and focussed on strategic influence as well as policy development. Journalists then provided the means by which neoliberal ideas could enter a wider circulation. This was an avowedly elite theory of change, lavishly funded by economic interests that were set to gain from the ideas being espoused.

By the early 1970s, the neoliberal counter-orthodoxy had organised into a transatlantic network of economists, think tanks and journalists. This network and its ideas increasingly populated political parties and government institutions, creating the intellectual conditions for change and ensuring that the neoliberal movement was prepared to capitalise on crisis. When this crisis came, neoliberal ideas entered government, first under the chaotic Labour and Democrat administrations of the late seventies, and later with the election of Margaret Thatcher and Ronald Reagan. After triumphing in key battles against the commanding institutions of the post-war consensus and New Deal, these administrations scored the ultimate victory when centre-left parties adopted major elements of neoliberalism so that even changes of government could no longer halt the march of its ideas.

Now is the time for the new economics movement to shift to the next gear

If today the conditions for another shift are apparent, how well prepared is the ecosystem seeking that change? This was the question Michael Jacobs and I sought to answer in a recent report that assessed, from a strategic perspective, the movement seeking a shift in economic ideas in the UK. Our main findings were positive. This movement is growing and we think it now covers most of the major functions required to shift the paradigm – from academic groups and think tanks, through communications websites and supportive networks, to funders and political figures. Each year, this movement becomes more influential and is full with talent stretching across generations.

We think there is now broad intellectual convergence across groups around a shared critique of the failings of neoliberalism and the need for a new paradigm. There is slightly looser convergence on the overall goals or values of a new paradigm, largely centring on equity, sustainability and democratisation. However, outside of one or two notable efforts, we have not seen common narratives or policy solutions emerge. Our conclusion is that this results from material barriers to progress, rather than profound differences between groups. These barriers cover three areas:

• the lack of a fully developed intellectual foundation;
• the fact that most organisations are non-mainstream actors, or ‘outsiders’, with ‘insider’ or establishment activity still relatively thin; and
• the absence of coordination and strategic direction covering a critical mass of the ecosystem, including for communications and media outreach, and funding and resource allocation.

In response, we’ve recommended the creation of a platform, or informal coordinating body, to serve the movement by providing a forum for the development of strategic coordination. This could help formalise those networks already emerging within mainstream organisations and provide a safe space to link them to non-mainstream groups in a shared endeavour, collaborating with the brilliant work of other facilitating groups. Such spaces should also exist in countries outside the UK and between countries, as globalisation and environmental change mean this movement will have to be more international than the analogous movements of the past. The challenge should excite us, as the time to accelerate efforts is now.

Younger generations must be given the chance to lead

But too often it feels like change is not happening fast enough. Members of the millennial generation look around and see the chaos of a British government mired in scandal, presiding over a collapse in our international influence at a time when nations need to work closer together than ever before. They wonder what kind of world they will inherit. While the progress described above is heartening – and Britain does sit at the heart of an increasingly global movement – frustration still abounds. A notable, recent example was the INET conference in Edinburgh this October. Held at a time when the ten year anniversaries of the crash have begun, the conference did little to recognise the political moment in which we find ourselves. Moreover, it felt like a chance was missed to facilitate strategic discussions between groups from across the world, and it was remarkable that there was an absence of shared spaces for people to meet and talk. Many came away from the conference feeling disappointed, doubting whether much new economic thinking has been done, or whether it would make a difference at this crucial time.

There are many reasons for this, and they echo throughout the movement as a whole. Firstly, there is a lack of diversity. This ranges from a large gender disparity, through the representation of cultures and nations, to a lack of intellectual pluralism. It has been heartening to see INET and others make some efforts to increase the participation of women, but change must come quicker and be of sufficient force to overcome large structural barriers. We see the same with the representation of people across the income distribution. Younger generations must also be given more power and opportunities, both to act and to learn. It will be they who have to inherit the world neoliberalism made, or unmade. And across all of these areas, we can no longer afford to follow a ‘common room theory of change’ – that if you win the intellectual argument, you change the world. This has not and will never be the case, as the Koch brothers and the other heirs to Mont Pèlerin so ably prove.

In the case of INET, the Young Scholars Initiative’s Festival for New Economic Thinking, organised before the INET conference proper, provided an exciting shared space that brought together a community to celebrate and plan. In doing so, it allowed a younger generation to appreciate the progress that has been made and to build for the future. This future does not look bright and time is running out. But, as we found across the movement in the UK, the millennial generation, and those below it, are facing the challenge with ambition and excitement.

In an oft quoted remark, Milton Friedman, a key part of the neoliberal ecosystem of influence, once described its basic function as being to “develop alternatives to existing policies, to keep them alive and available until the politically impossible becomes the politically inevitable”. We do not yet have a critical mass of those alternatives and a common narrative around which to bind them. More shared spaces and coordination are needed to accelerate the process by which we reach this point. And while those spaces should be populated by all ages, the torch must be passed to a younger generation. It is they who will one day make the impossible inevitable.

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Ahead of this week’s Autumn Budget 2017, Reema Patel explains how the Citizens’ Economic Council programme has piloted models of engagement that seek to enable citizens, including those ‘left-behind’ citizens, to ‘take back control’ over the economic decisions that affect their lives.

“I feel I have no voice in society. I don’t have a concept of my voice being heard.”

— Participant, RSA Citizens Economic Council workshop, Oldham

In the RSA’s new Citizens’ Economic Council interim report, published ahead of the 2017 Autumn Budget, we caution that decision-makers need to find new ways of engaging citizens earlier and upstream in economics.

Drawing upon roadshow workshops held in Clacton-on-Sea, Port Talbot, Glasgow, Birmingham, as well as nine day-long workshops on economics with randomly selected citizens, we show how the UK public’s decline in trust in politicians, economists and business as revealed by the ‘Brexit’ vote and by the Edelman Barometer 2017 is closely connected to the distance they feel from decisions made about the economy. In Port Talbot, a town deeply affected by the steel crisis, one participant sketched the following when asked to draw an image of how they saw the economy:

Drawing, from RSA Citizens’ Economic Council Inclusion Roadshow workshop in Port Talbot

Our report illustrates how inequalities, such as gender and regional effects, are often overlooked or rendered invisible by national narratives about the economy and economic performance, which often aggregate figures and mask the varying levels of income and wealth distribution for different sections of society. This was a point somewhat more bluntly made by a Newcastle resident when Europe expert Anand Menon invited an audience to contemplate a plunge in the UK’s GDP as a consequence of Brexit: “That’s your bloody GDP. Not ours!” she yelled at him.

To address the problem, the Citizens’ Economic Council found ways of communicating and engaging  with citizens about how they could reclaim terms such as ‘GDP’ so that it was able to respond to their experiences once again. In this interim report, we set out some emerging recommendations which we seek to test with a range of stakeholders. We recommend that:

• HM Treasury pilots Citizens’ Reference Panels, juries and other ways of engaging citizens to give their views – rather than making policy behind closed doors in Whitehall.
• ­The Bank of England pilots Citizens’ Reference Panels and other deliberative approaches with a view to advising their departments and committees on key economic decisions including the setting of interest rates. ­
• Combined authorities, local authorities and LEPs seize the opportunities of devolution, using deliberative approaches to engage citizens through the development of their devolution deals and in their implementation.

But we also recognise that the adoption of advisory councils by institutions alone is not sufficient. It is also important to create the right conditions in which they can thrive. To this end, we propose that the government creates a code of practice for effective public engagement and participation, recognising the sheer range of engagement approaches that can empower citizens: for example, participatory budgeting, citizens’ reference panels, citizen juries and co-production methods. At its core should be engagement and participation practice that extends beyond simple consultation towards approaches that are more deliberative, promote dialogue and allow sufficient time and space for policymakers to respond to citizens’ views.

To make this possible we also propose the creation of an expert resource centre on inclusive and participatory economic policy that would support government departments, non-departmental public bodies and publicly funded organisations, including the Bank of England. It would be modelled on a similar programme funded by the Department for Business, Energy Innovation and Skills, Sciencewise, which offers public bodies support in participatory policymaking relating to science and technology issues. Both the code of practice and expert resource centre would also work in co-operation with the existing international Open Government Network, which engages civil society in creating a more open and transparent approach to government across the world, and build on those ambitions set out in the Civil Service 2012 reform plan.

It is clear that we stand at a crucial crossroads. We can either ignore the populist signal and the democratic deficit at the heart of our economy, trapping us in a vicious cycle of distrust and instability. Or we can build a legitimate, transparent and accountable system that brings the much maligned ‘expert’ and citizen together to shape a fairer economy.

Find out more about how to join us in our efforts to do so online here: www.rsa.org.uk/citizenseconomy. The final report will be published in Spring 2018, with confirmed speakers to include Bank of England chief economist Andy Haldane, Europe expert Anand Menon, Financial Times journalist Gemma Tetlow, and Citizens’ Economic Council participation Patricia Wharton.

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In the aftermath of the financial crisis students all over the world began to express their dissatisfaction with the economics education they received at their universities. They were appalled by its failure to predict, to explain and in many cases even to discuss the financial crisis. Students felt like the world outside their classrooms was falling apart, while inside them the same models, equations and formulas were preached as if nothing had changed. Built on this disappointment, student groups formed all over the world and started to work towards the common goal of making economics more pluralist and more related to the real world. They wanted to challenge the existing mainstream of economic thought and enrich it by integrating a variety of alternative theories and approaches.

Many years have passed and a strong network of students and economists dedicated to pluralist economics has developed. They continue to push for new approaches to economics and for making it more accessible to lay people. They have achieved important curriculum changes at some universities, organised a number of conferences and forums for a more pluralist discussion of economics, and developed a range of pluralist resources. But despite that, in many respects economics has not changed. The majority of universities have maintained the old curriculum and the teaching of economics overwhelmingly continues as if the crisis had never happened. This makes it very clear that the journey towards a more pluralist economics continues. In many ways this is a journey to a destination unknown, because the question of what pluralism in economics really means is controversial and there are a variety of different views on what it could look like. To me it seems that there are broadly four different views among students, activists and scholars.

First, the ‘paradigmatic’ view of pluralism, which one might argue is actually not very pluralist at all. It argues that neoclassical (mainstream) economics as an economic paradigm has failed to conceptualise and analyse the economy and should, therefore, be substituted by a different paradigm. This view can be pluralist in so far as the new paradigm could be a pluralist paradigm but that still leaves the question of what a pluralist paradigm would look like. Second, there is the ‘sideline’ approach to pluralism, taken by many universities. While they allow alternative schools of thought to exist on the sidelines (in optional modules and electives), the universities continue to teach mainstream economics in the core modules of their degrees. This view rests on the belief that mainstream economics is the ‘real’ economics, the one that can properly explain the economy and other approaches are merely interesting curiosities to explore. Third, there is the ‘compartmentalized’ view of pluralism, which is centered around the idea that different approaches to economics can explain different aspects of the economy. Thus, all theories and schools of thought should exist side by side each analyzing economic processes in their own niche. Finally, there is the ‘cross-fertilization’ view of pluralism, the belief that different schools of thought should not only be equally valid approaches to analyzing the economy but actually influence and change each other. This view believes that pluralism is a process arising out of a continuous dialogue between different approaches and schools of thought that challenge and enrich one another.

All four views have valid arguments for the form of pluralism they propose, and the onus is on us to figure out what the economic pluralism of the future is going to look like. There are a number of important steps that we can take towards that goal, and I want to briefly shed light on two of them: providing knowledge about alternative economic approaches, and organising discussion forums for people to engage in a dialogue about pluralist economics.

Knowledge is the basis for any future discussion about pluralism. Without knowledge of alternative approaches, it is impossible to consider their viability. A group of colleagues from the student network Rethinking Economics and I have recently published a book that greatly contributes to providing this knowledge to a wide variety of people. The book ‘Rethinking Economics: an introduction to pluralist economics’ introduces a range of alternative schools of thought and highlights the ways in which they might enrich economic analysis. By being very accessible it opens up the dialogue to a broad group of people and gives them the opportunity to enter the discussion and contribute their thoughts and ideas.

The second crucial step is bringing these people together and inviting them to engage in a constructive dialogue on pluralist economics. This is mostly done through the growing number of pluralist academic conferences that students and scholars all over the world are organizing. On 17-19 November one such conference is happening in the North of Scotland. ‘Shifting Paradigms – Economics in the twenty-first century’ is the annual conference organised by the Aberdeen Political Economy Group (APEG). APEG is a student society dedicated to creating a pluralist, inter-disciplinary forum that actively promotes the exchange of ideas, resources and materials related to contemporary socio-political and economic issues. The conference is a prime example of how we can organise and shape the dialogue around pluralism. It aims to create a critical and diverse academic forum that is aimed at uncovering and debating the economic challenges of our time. Furthermore, it embraces and recognises the importance of interdisciplinarity in economics. Issues like economic, environmental, and social justice can only be understood and tackled from a multidisciplinary perspective and therefore scholars of different disciplines are invited to Aberdeen to engage in this dialogue. By connecting different economic theories and disciplines with each other, the conference hopes to inspire the development of new ideas and intellectual alliances.

Economics has to be a dialogue. It has to be a process that constantly changes. New ideas, concepts and approaches have to considered and discussed. We have to embark on this journey together and to find out how pluralist economics could work. Why not take a first step and join the Shifting Paradigms conference?

Let’s get together and reshape the future of economics!

Shifting Paradigms is taking place on 17-19 November 2017 at the University of Aberdeen. Tickets can be purchased here.
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Last week openDemocracy attended the first ever Festival for New Economic Thinking which brought together people and organisations who are committed to advancing economic thought and inspiring change.

As part of the ‘Help the OECD write the new Narrative’ workshop, OECD official Patrick Love presented the organisation’s draft report ‘Towards a New Narrative’ in which 20 experts explain what was wrong with the OECD’s methods and advice from 2003 to 2008 and beyond.

The OECD (Organisation for Economic Co-operation and Development) has come in for rough criticism since the 2008 crisis in the way in which it has measured economic progress, market movements and growth. One example of the body rooting its research in flawed assumptions was a 2008 report that said that “a consensus had been secured that financial deregulation was an optimal contribution for economic development”, a comment that passed without further analysis.

Love suggested that both the tools economists used and way in which data was used has led to crisis the faith that institutions such as the OECD can effectively track economic behaviour. One particular macroeconomic tool for research used by treasury department’s, central banks, think tanks and academic institutions are DSGE models.

What are they?

For those of us who are not macroeconomists, DSGE stands for dynamic stochastic general equilibrium.

“General” indicates that the model includes all markets in the economy. “Equilibrium” points to the assumptions that supply and demand balance out rapidly and unfailingly, and that competition reigns in markets that are undisturbed by shortages, surpluses, or involuntary unemployment.

“Dynamic” means that the model looks at an economy over a period of time rather than in a single moment. “Stochastic” refers to a specific type of “manageable randomness” built into the model that allows for unexpected events, such as oil shocks or technological changes, but assumes that the model’s agents can assign a correct mathematical probability to such events.

The models attempt to explain economic growth, business cycles, and the effects of monetary and fiscal policy. They’re rooted in three ideas of how strategic choices in an economy are made:

First of all, they observe the behaviours and habits of “agents” be they consumers, companies, and financial institutions like banks or hedge funds. Secondly, the model takes into account the underlying economic environment of whether it is a competitive economy, how much monopoly power exists or any lack of information and transparency in what we may know. Finally, the model is estimated as a system, rather than equation by equation in the previous generations of macroeconomic models.

So what’s the problem?

Critics say that DSGE assessing an economy’s growth rate or how stable financial markets are based on unrealistic assumptions. They argue that it is fundamentally incorrect to model from individual actors because humans are first not rational and humans are not simply individual actors. The economics will always be flawed because such behaviour can only be understood in context of social interactions. Other suggest the opposite is true: there is too little individuality rather than too much.

Other problems cited is the idea of “general equilibrium.” This is an assumption that in an economy interaction of demand and supply will also level out. In the words of Patrick Love who authored a draft on reforming the OECD’s methods for economic measurements, “I think we need to come up with models that model behaviour, not models that assume that the system will always end at a stable equilibrium.”

Additionally DSGE models fail to look at labour costs, or details such as the relationship between profits and labour costs in order to predict the direction of the economy. In the run up to the 2008 financial crisis, the OECD models failed to take seriously the issue of lower wages combined with rampant household debt. Economists such as Love state that lower wages effectively kill jobs which runs contrary to mainstream assumptions of competition.

The issue of communication is also considered a major factor with communications networks and social media able to spread fear globally. The modelling tools economists used are  as Andrew Haldane Chief Economist and Executive Director, Financial Stability, Bank of England said “incapable of capturing today’s networked world, in which social media shape expectations, shape behaviour and thus shape outcomes.”

Finally economic models face the danger of perpetual obsoleteness because of the failures in understanding accumulative affects of human behaviour. Where this evident is looking at the issue of emergence. Emergent phenomena occur when the overall effect of human individual behaviour is qualitatively different to what each separate human is doing. You can not anticipate the outcome for the whole system of an economy or predict what will happen based on a few individual agents because the large system may add properties that individuals do not have.

These models used to inform policy and analyse the economy are vast and complex with very few outside the world of economists knowing about or understanding them. Love questions whether it is necessary to have such complex tools if they fail to anticipate disasters or point to macro solutions.

The OECD is currently working on developing new models to analyse economic behaviour and as a result win back the trust and sense of accountability in itself as an institution. It wants to educate the public about economic models and the tools that economists and bodies use to predict, anticipate and fix an economy which has seen drastic mutation and left millions feeling increasing insecure. As Patrick Love said during yesterday’s session: “New economics requires new tools and narratives.”

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Economics is having an image crisis. It’s all around us, and yet few of us are able to relate to the subject, let alone feel the agency to transform it. At a time where our dominant economic models are failing us, individuals aren’t equipped to effectively participate in discussion of the
subject – exasperating an already non-functioning democracy. The subject urgently needs to be transformed from a barrier to a bridge for people to engage in critical, grounded and informed political debate.

For most people, economics is recognised as simultaneously ubiquitous and important, but an inaccessible, distant and abstract force over which we have little control. People know it’s all around them, but what it even is (let alone how we can affect it), is a mystery to most. At Economy, we’re working to unpack how people experience the subject, what the barriers to engagement are, and what needs to change in order for it to become a tool to build an economy created by everyone.

One of our first findings last year was that only 12% of the UK feel that politicians and the media tend to talk about economics in an accessible way that makes it easy to understand. Perhaps unsurprisingly, this is even starker in lower income families, dropping to 7%. When it comes to elections, for many the highpoint of the democratic calendar, only a third of us feel that information about the economy in the media is useful enough to help us make an informed voting choice.

The perception of usefulness of economics is lower than the pitiful average in not only those from a lower socio-economic background, but also the young. In the election this year, our research found that nearly 60% of young people did not feel the information they could access was useful enough to inform their vote. And yet we know that democratic malaise is not the issue; passion, excitement and energy in politics amongst the young is at an all time high.

The problem lies in how the subject is communicated. The single biggest request from the people we speak to is always the same: ‘Explain it in layperson’s terms!’. This statement is often closely followed by a complaint that economic information is not presented in a manner relevant to their lives, and it is often shrouded in meaningless, inaccessible terminology. This sentiment is found in over 70% of participants. It’s a clear message: economics, as spoken about in the public sphere, needs to eliminate jargon, simply and define difficult vocabulary, and drop assumptions about the levels of understanding of its audience. Answers like this are common in our interviews:

“When people talk about the economy, it’s just talking about millions and billions of pounds. So I feel it’s not connected to me at all”

“I feel like [the economy’s] very big, like it refers to something very big… I don’t feel I know enough to have an opinion”

“FTSE? I know that’s a thing that you do with your feet under the table”

 Our research highlights a serious economics literacy problem, leaving economics accessible to those with a certain level of power, privilege and education. This leaves us with a major imbalance between decision makers and citizens – an imbalance that leaves those feeling the worst effects of our economic system the least able to engage in change. New thinking for the British economy needs support from a public that is able and willing to hold those with economic power to account. Moreover, it needs a public that can engage with economic discussion and that has the agency to assert its demands from the economy.

Fixing economics communication cannot be left only to those already doing it. We need to develop a new cohort of economics educators, communicators and commentators, representative of the society the economy should serve. Elinor Ostrom remains the only woman to have ever won a nobel prize in economics (out of more than 75 awarded), and there have only been two non-white recipients. There is little sign that the current arbiters of economic excellence have any interest in bringing more people into the conversation.

We need to reclaim economics as a tool we can all use, take ownership over, and have confidence in. When considering some of the dominant economic narratives of the last ten years (austerity being the most obvious example), it is clear that they haven’t been created in the interests of the many. With better understanding, communication and presentations of the subject, the subject can be used as a catalyst for change.

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The first ever Festival for New Economic Thinking is taking place in Edinburgh on 19-20 Oct 2017. It brings together people and organisations who are committed to advancing economic thought and inspiring change. Here Reema Patel explores why economics has a democratic deficit, and what can be done about it. 

There are many reasons for why more democratic approaches to economics are necessary and valuable. As well as shaping better and more informed economic decisions and improving its quality, meaningful efforts to engage citizens on economics helps us explore citizen values and voices about economics, promotes transparency about economic priorities, and strengthens democracy and debate. Despite the enormous potential democratising the economy has for a new approach to economics, there is a serious democratic deficit in economics. This takes three forms:

• The transparency deficit: There is a lack of transparency in economics about the political implications involved when economic decisions are made, and this lack of transparency is compounded by the inaccessibility of economic language.
• The legitimacy deficit: There is a lack of legitimacy in economic decision making caused by the dominance of technocracy and the exclusion of citizen voice. This has fuelled a rise in populism and revoked the ‘social licence’ of policymakers and economists.
• The accountability deficit: Declining accountability has resulted in narrowness to economics itself, with a debate that is less creative, less connected to, and less able to respond to our collective social problems.

The transparency deficit

“Only when the general public displays awareness of these issues will professional economists find it impossible to browbeat them by declaring themselves to be custodians of scientific truths.” – Ha-Joon Chang  (Economist)

Economics is often presented as the domain of the ‘experts’ alone when it is not. There needs to be more transparency about the political choices behind economic policy. Yet despite the clear public interest in asking these questions directly of citizens and engaging them in informed dialogue and discussion, it is rare for economists and policymakers to do so. This is compounded by the existence of jargon that often shrouds simple, intuitive concepts in complex language, resulting in citizens shying away from expressing their views on economics as confidently as they might on other issues that form an important part of public debate – such as gay marriage, or the NHS.

As economist Ha-Joon Chang explains, economics is a fundamentally political and moral subject, its origins being in moral philosophy. To explain that economic decisions are determined by ethical and political judgements, Chang uses the example of child labour, which he notes was a legitimate object of market transaction (even in the world’s richest countries) until the early 20th century. According to Chang, this example demonstrates to us that the market itself is a political construct as opposed to a ‘natural order’ that cannot be tampered with by political intervention. As such, economics is as much about citizens as it is about ‘expertise’; and that expertise must be in service to citizens and their values and ethics, not the other way around.

The legitimacy deficit

Drawing, from RSA Citizens’ Economic Council Inclusion Roadshow workshop in Port Talbot

We live a world in which economics is experiencing a crisis in legitimacy and public trust at the same time as holding disproportionate influence and power. The 2016 referendum on the European Union in the UK exposed an enormous disconnect between citizens and the economic, political and policymaking consensus; as did the 2008 world financial crisis in which we witnessed scenes of political protest from citizens at the site of major financial institutions across the world. In the past year, the Edelman Barometer of Trust has reported a global implosion in levels of citizen trust in policymakers, companies, politicians and economists.[1] Oxford Dictionaries declared the international word of the year in 2016 to be ‘post-truth, defined as an adjective ‘relating to or denoting circumstances in which objective facts are less influential in shaping public opinion than appeals to emotion and personal belief’.[2] The rise in populism and the era of ‘post-truth’ is a signal that politics and democracy itself needs to change. Nowhere is this more apparent than in the field of economics where issues that are cloaked in economic jargon or confusing language conceal trade-offs and choices that are more legitimately the domain for public dialogue and public participation.

The accountability deficit

Economic policy is an area that has considerable influence and impact on the day-to-day lives of citizens through the decisions made by governments about the future of the UK economy. Despite this, there are limited efforts to engage citizens on economics itself. This lends itself to an accountability deficit; often economic decisions are made ‘behind closed doors’, with little, to no public engagement. As a consequence, they often find themselves subject to fierce public scrutiny and criticism when announced. Controversial decisions have been made that have faced public backlash, and have forced a reversal of government economic policy – examples of these have included the government’s plans to introduce the bedroom tax and planned cuts to personal independence payment (PIP) disability allowances.

This approach of ‘decide, announce, defend’, which dominates economics and economic decision making has two effects. Firstly, it is costlier and more damaging to the legitimacy of decision makers in the long term. And secondly, it pushes economics itself further and further away from citizens – perpetuating a vicious cycle of an economics that is resulted in narrowness to economics itself, with a debate that is less creative, less connected to, and less able to respond to citizens’ concerns and problems.

Where next?

In its place, we propose that economic decision makers and institutions prototype, adopt and embed citizen engagement approaches such as the RSA Citizens’ Economic Council and citizen assemblies such as the Brexit Citizens’ Assembly. These are collaborative, co-productive dialogues between citizens, experts and policymakers with a view to strengthening legitimacy, transparency and trust between citizens and experts. Yet we recognise that doing this well is far from easy. It requires us to recognise that there are barriers – systemic and institutional – that need to be addressed to enable democratic innovation to flourish in a sustained way. Our interim report on the Citizens’ Economic Council due to be published later on this year will lay out in more detail the way forward on these issues.

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openDemocracy is delighted to be partnering with the Festival for New Economic Thinking which is taking place on 19-20 Oct 2017 at the Edinburgh Corn Exchange.

Economics is at a turning point. Society faces mounting challenges, yet our dominant economic models are out of touch. But around the world, new ideas, approaches, and concepts are being developed by disparate communities of thoughtful people. The Festival for New Economic Thinking brings together organizations and individuals committed to moving forward economic thought for the future. As we celebrate the nuance and richness of the history of economic thought and the diversity of current economic thinking, the Festival will provide fertile ground for us to inspire economic thinking for tomorrow.

Over the course of the Festival oD will be providing coverage of events and posting interviews with key participants. We will also be sparking a debate on two key themes, both at the Festival and online. These are:

Theme#1: Does economics have a democratic deficit?

Economics affects everyone, but few people feel have any power over the economic decisions that affect their lives. Around the world democracies are often captured by powerful financial interests. Should this be a concern for economists? If so, what alternatives are there to develop more democratic institutions and structures which re-distribute economic power?

Panel session time and date: Thursday 19th October, 16:30 – 18:00, Media stage

Speakers: Laurie Macfarlane (oD), John Christensen (Tax Justice Network), Reema Patel (RSA), Maggie Chapman (Scottish Green Party)

Theme#2: Cutting through the spin: Economics and the media

For most people, politicians and the media are the main sources of information about the economy. But does the way that economic issues are discussed in the media inform people, or alienate them? Do politicians and journalists sometimes reinforce misleading or false narratives about how the economy works? How can journalists and economists work together to improve the quality and accessibility of economic debate?

Panel session time and date: Friday 20th October, 09:30 – 11:00, Media stage

Speakers: Adam Ramsay (oD), Yuan Yang (Financial Times & Rethinking Economics), Antonia Jennings (Ecnmy.org), Izabella Kaminska (Financial Times) & George Kerevan (journalist and former MP)

Check out the full program of workshops, talks and events here.

We hope to see you there!

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Work is currently undergoing a complex and multifaceted crisis. In order address these challenges we need to radically rethink the way that work — both waged and unwaged — is distributed, the role that work should play in society, and the response to automation and the threat of mass unemployment. At the 4DayWeek Campaign, we argue that a shorter working week is an essential component to solving these monumental issues.

Waged work

Within waged work we are experiencing a dual-crisis caused by a single factor: the maldistribution of waged work.

On the one hand we are horribly overworked. In 2015/16 stress accounted for 37% of all work related ill health cases and 45% of all working days lost due to ill health. Work-related stress is often a major cause of family breakdown, drug and alcohol addiction, and heightens a series of other mental health issues. It also acts as an economic drag on the UK economy, costing us some £6.5billion a year in lost workdays, as well as the pressure it puts on public services.

On the other hand, statistics suggesting historically low levels of unemployment conceal persistent levels of underemployment whereby people are in work but do not get as many hours as they need for a decent standard of living. The Conservative Government repeat time and time again that the economy is working well and churning out jobs. However, these jobs are all too often those found in places like the gig economy where workers are forced to register as ‘self-employed’ and are not entitled to minimum wage, sick pay, or basic workers rights. This is reflected in the statistics showing that two in every five people employed in the UK are in ‘bad jobs’ — work which doesn’t provide a secure, living wage.

In its usual fashion, capitalism has turned this imbalance into a source of profit. The gig economy exists because we live in a society in which cash-rich but time-poor individuals pay people to do even the most routine of tasks. Deliveroo is the perfect example of this; it was set up after Will Shu, a former investment banker, worked hundred hour weeks and wanted good food delivered to his office for his hard work. In his own words, “when you’re working that hard and you don’t think about anything else, your sense of reality becomes warped and it becomes a huge issue.” His solution was to create a company that exploits precarious workers to create a hyper-responsive, on-demand food delivery service.

At the 4DayWeek campaign, we see this state of affairs as a peculiar madness. In a world where there are people with too much work living alongside people with too little, we argue that the logical solution to this is to redistribute what good work is available – to the benefit of all.

Unwaged work

Work is of course more than just that which you are paid to do. Without the everyday activities, of cooking, washing, cleaning, childrearing, and caring for the elderly, the sick, and the disabled, society would cease to function. This too is undergoing a crisis expressed along gendered lines.

Unwaged work takes a phenomenal amount of physical and emotional labour, which is overwhelmingly done by women. In the UK, women carry out an average of 60% more unpaid work than men. This imbalance in unpaid work has a hugely negative effect on the wellbeing of women. The impact of juggling careers and caring for children and elderly relatives means middle aged women are two thirds more likely to suffer work stress than their male counterparts.

On the other side of the coin, working fathers increasingly want to spend more time bringing up their children. A recent survey found that 53% of millennial fathers want to move to a less stressful job, and 48% would take a pay cut to achieve a better work-life balance.

As with waged work, there is an argument to think again about how unpaid work operates in society. To increase gender equality more of the care burden must fall upon men who increasingly want to spend more time with their children in their most formative years.

The meaning of work

Beyond the imbalances in the distribution of waged and unwaged work, there is also a crisis of meaning within work. At the centre of this crisis is a question about the very purpose of work.

In 2015 yougov carried out a survey that revealed that 37% of people in the UK thought that their job made no meaningful contribution to the world. David Graeber has described this phenomenon as a “scar across our collective soul”. Clearly he has a point: over a third of people in the UK experience a profound sense of alienation from the work they do. This abject dissatisfaction with work has serious impacts as having a bad job has been shown to be worse for your health than unemployment.

And yet as a society we fetishize the work ethic: in Britain you are either a ‘worker’ or a ‘shirker’; the entire political rhetoric is targeted at the idea of the ‘hard-working family’. This is expressed in a brutal system of unemployment and disability benefits which are designed to force people into work. The infamous Work Capability Assessments have been shown to inflict permanent mental health problems with heart-breaking results. The work ethic assumes work is inherently good, and work has become an end in itself, bending and distorting individuals towards its demands.

Work should instead exist to promote a conception of the good life, where the individual and society are seen holistically, and where wellbeing is seen as the ultimate goal. If work is not fulfilling that function then we should look seriously at how it operates in society. We argue that work-time should be reduced; not only will it allow people to spend less time in jobs damaging their health, but also fully engage with other aspects of society and do things that have been proved to truly benefit wellbeing, like forming strong relationships with friends and loved ones.

The future of work

The problems outlined are all likely to be exacerbated by the expected impact of automation. It is estimated that by 2020, over 30% of jobs in the UK will become automated. As more and more jobs are done by machines, we are likely to face the prospect of widespread unemployment and low wages if things stay as they are.

The only way to deal with this widespread disruption to the labour market is by radically altering the way we think about how work operates in society. A 4 Day Week will help share what work is still available and thus distribute more evenly the benefits accrued by automation.

We face two possible futures: the first is a dystopia where a shrinking pool of good quality paid work is held by the privileged few and the rest of us scramble around for low paid temporary work, while unpaid work continues to be spread unevenly along gendered lines. The second is a world where the benefits accrued by technological change are shared more evenly across society, providing well paid meaningful work and security, while offering us all the chance to fulfil our own societal duties – spending time caring for the ones we love most.

Which do you prefer?

Check out the 4DayWeek Campaign at: www.4DayWeek.co.uk or on Twitter @4Day_Week

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On 21st of August 2015 a police constable and a housing officer arrived at a Brixton flat after reports of a break-in by squatters. Instead police reports stated that they found a 36 year old mixed race man, Nathaniel Brophy, in an agitated state holding a gun and insisting that they leave his home^[i]. Brophy was the previous occupant of the flat and had been evicted earlier in the week due to rent arrears. Following a standoff that lasted 6 hours, Brophy was shot 3 times by armed police, hospitalised, and was later convicted for threatening officers with an imitation firearm. Police accounts of Brophy’s shooting were quickly challenged by family members and the London Campaign Against Police and State Violence^[ii]. The case eventually got shuffled out of the news cycle and in February 2017 the IPCC investigator “was satisfied that the officers’ actions were appropriate in the circumstances and it was a justified use of force”^[iii].

Potentially lethal encounters during eviction disputes in Brixton weren’t new; in 2013 a housing officer and bailiff survived being shot during an eviction^[iv], and eyewitnesses had criticised the physical force used in another eviction of a squat involving dozens of police and enforcement officers^[v]. Yet for a few weeks in the late summer of 2015, Brophy and his case was a flashpoint for activists with concerns about the way in which the racial violence of policing and the economic violence of the housing crisis were intersecting. While housing issues have never received greater public attention, the eviction process is still hidden away from view and gathers remarkably little concern. Tenant evictions in England and Wales remain high: growing since 2008 to all time high of over 40,000 in 2015^[vi]. Since 2015 they have stabilised, but we have seen roughly 8,000 repossessions in the second quarter of 2017, with the majority in the social housing sector^[vii]. The limited data made available suggests police attendance at evictions has also grown: evictions officers in Manchester attended increased sharply from 302 in 2010 to 483 in 2013^[viii]. In finding our collective way out of the housing crisis it is vital that we start to ask serious questions about the way in which the widespread and significant number of evictions that happen every year is being handled.

The front line of eviction

As part of research I conducted at Newcastle University in 2012-16^[ix], I interviewed housing officers doing rent recovery for an Arms Length Management Organization (ALMO) and the bailiff manager and a member of his team at the county court in ‘Abbeyburn’^[x] a city in the North of England, about how they conducted evictions and how they handled risks. These interviews were part of a larger study looking at eviction enforcement in the UK, and they help understand some of the internal workings of the eviction process at an everyday level. They also reveal how the frequency of evictions, and the decline of the welfare state, can increase their potential for violence.

Once possession has been awarded by the courts to a landlord, the processing of the writs and the enforcement passes to the court staff and bailiffs. It is the responsibility of the landlord to assess the risk and notify the court of any issues or dangers the bailiffs might face via a coded risk assessment system ranging from extreme aggression to verbal insults and threats. The bailiff visits the property to given notice to the tenant at least a week in advance (14 days was what the Abbeyburn court team aimed for), and adds their own knowledge from this visit to the assessment. Then they have to decide on what and who they need to take; not only police, but animal handlers, locksmiths, mental health nurses, or other specialists may be needed.

Risk assessments are vital for the bailiffs to make decisions on how to prepare, but they are also dependent on the subjective judgement of the landlord. While private landlords can have little contact with their tenants before the day of eviction, social landlords often have regular contact and are legally required to be aware of certain specific needs tenants might have. Nonetheless housing officers often depend on what they call “intuition” to inform them on what situation a person might be in when they face eviction, based on certain behaviour or emotional distress. Past behaviours and information from neighbours are leaned on when deciding what to notify the court of: “We’d use the risk indicators that we use, but also local knowledge” said Charlotte, a housing officer working on an estate in the city “So we know that someone has a history of criminality, they’ve mental health problems, or they’re known for drug and alcohol misuse, then we’d use that”. For housing officers on her estate, pursuing a tenant for rent arrears through to eviction was a constant process of phone calls, intuitive judgements, and knowledge-tethering to inform them on how to proceed.

Housing officers run the risk that this method of information gathering entrench prejudices around individuals and areas, as past treatment dictates future decisions. They knew that the reputation the estate suffered from as a backwards and deprived area was a significant problem for their work in reaching tenants and accessing support. Charlotte’s estate was well known to the bailiffs as a “hard” area to work in, and people who did not live there often avoided it. Working class housing estates often suffer from this effect, a phenomenon social scientists dub “territorial stigma”. This stigma promotes a view that certain parts of a city are inherently dangerous areas producing criminality; “brutal high-rise towers and dark alleyways that are a gift to criminals and drug dealers” in the words of David Cameron^[xi]. As well as hurting residents on an individual basis, these stigmas can impact policy and public service responses to urban poverty, and are often used to justify repressive policing measures and social cleansing^[xii].

Problems surface

Despite all preparation the day of eviction can also bring out issues that have previously been hidden. While dogs or exotic pets could often present a problem, more unusual situations could occur, such as the presence of unidentified chemicals, or the case of an evictee who had removed all load bearing walls in their house. Although the manual all bailiffs are issued with during training specifies protective vests and equipment, and suggests they conduct preliminary visits, this was minimal help. Dean, a bailiff who helped to take this training, insisted “it doesn’t matter how many times you go to the property, it’s a constant, shifting risk”. In the final instance, evictions are uncertain for those who enforce them. Once on the doorstep, it’s the responsibility of the bailiff and landlord to make a decision about when to back off and call for support from police. The bailiff manager mentioned having to make decisions about whether tenants needed the support of mental health services as he was evicting them, and housing officers knew of cases of domestic violence that had only come to light when the housing officers showed up to pursue rent arrears. Tenants often had limited contact with the housing provider once their tenancies had ended, so for some vulnerable people, eviction can be the only time they have a chance to get formal help.

Evictions can also add to their woes, and the threat alone can cause significant problems. A medical study of the ‘bedroom tax’ done in Newcastle showed that trying to avoid eviction by adjusting for financial cuts “resulted in poorer diets, inadequately heated homes and restricted opportunities for social engagement, disrupting family and community support” for tenants^[xiii]. Such conditions breed resentment. Rick, a housing officer who attended a community fun day in Abbeyburn organised by the ALMO recalled “it was like parting the red sea, nobody wanted to come and talk to us, everybody had their backs to us, everybody had the feeling they were going to be pulled up on the rent”. Ill health and social isolation, indignity and anger are shaping the everyday life of precarious tenants.

The lasting impact of eviction itself is known to be a contributing factor to prolonged homelessness^[xiv], and as the sociologist Matthew Desmond has recently argued in work on the US mortgage crisis, forced evictions exacerbate almost every aspect of poverty. The instability they cause makes it harder for people to find work, access services, and maintain social networks^[xv]. Despite Prime Minister May’s pledge to increase funding for mental health services, there is a very real danger that evictions are fuelling, and fuelled by, the collapse of Britain’s care system. As support services from domestic violence shelters to the NHS continue to struggle to cope, bailiffs and police will increasingly be the frontline of our care system. “I think now we realise the world’s changing” Dean commented “it’s becoming more dangerous out there, people are becoming more desperate, and we realise, that we know we can’t operate by ourselves”.

Society after evictions

The increasing pressure on both tenants and on the services they rely on is creating evictions that are not only more frequent than in previous decades but also more dangerous for those involved. However, evictions are by definition a violent practice, as evicting someone ultimately involves more coercion than consent. The reality is that eviction is an inherently uncertain and often dangerous event for both those in enforcement and the evicted, and bailiffs and housing officers are always working within this limitation. While in the short term, it is important that the public and policy makers continue to push for accountability and transparency regarding eviction enforcement, the long term solution is not to manage risks better, but to make eviction obsolete. Evictions are a visible demonstration of the way challenges such as social or racial stigma, economic inequality, mental health, domestic violence, and housing are interlinked. Calls for rent controls, such as those made recently at the Labour Party Conference, need to recognise that high rent is only half the challenge. The housing crisis also requires a change in thinking: from treating housing as a commodity, to seeing housing as part of a broader transformation of social care and welfare, one that removes the pressure and anxiety of renting and empowers residents.

^[i] Al-Othman, H. Man jailed for holding police in six-hour siege with imitation handgun Evening Standard 20 May 2016 https://www.standard.co.uk/news/crime/man-jailed-for-holding-police-in-sixhour-siege-with-imitation-handgun-a3253566.html

^[ii] London Coalition Against Police and State Violence. New concerns on the Tilson Gardens Police Shooting. 23 September, 2015 https://londonagainstpoliceviolence.wordpress.com/2015/09/23/new-concerns-on-the-tilson-gardens-police-shooting/

^[iii] IPCC. IPCC investigation findings following police shooting of Nathaniel Brophy. 7 February 2017 https://www.ipcc.gov.uk/news/ipcc-investigation-findings-following-police-shooting-nathaniel-brophy

^[iv] Enoch, N. Bailiff in serious condition and female colleague injured after they were both shot as they tried to evict a tenant. Daily Mail 3 July 2013 http://www.dailymail.co.uk/news/article-2354847/Brixton-Shooting-Bailiff-female-colleague-injured-try-evict-tenant.html

^[v]  Childs, S. Angry Squatters and Burning Barricades Aren’t Halting the Yuppification of Brixton. Vice 16 July 2013 https://www.vice.com/en_uk/article/av85k8/burning-bins-at-a-brixton-squat-eviction

^[vi]Savage, M. 100 tenants a day lose homes as rising rents and benefit freeze hit. the guardian 22 July 2017 https://www.theguardian.com/society/2017/jul/22/100-tenants-a-day-lose-homes-rising-rents-benefit-freeze

^[vii] Ministry of Justice Mortgage and Landlord Possession Statistics in England and Wales, April to June 2017 (Provisional) 10 August 2017 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/636890/mortgage-landlord-possession-statistics-apr-jun-2017.pdf

^[viii] Data via Freedom of Information request

^[ix] I am grateful for the support of a PhD scholarship grant from the Economic and Social Research Council  (#1188490) in helping me undertake this work.

^[x] All names and locations of interviewees have been anonymised.

^[xi] David Cameron ‘Estate Regeneration’ 10 January 2016 https://www.gov.uk/government/speeches/estate-regeneration-article-by-david-cameron

^[xii] Wacquant, L., Slater, T., and Pereira, V. B. (2014) Territorial Stigmatization in Action. Environment and Planning A, 46(6), 1270-1280.

^[xiii] Moffatt, S., Lawson, S., Patterson, R., Holding, E., Dennison, A., Sowden, S., & Brown, J. (2015). A qualitative study of the impact of the UK ‘bedroom tax’. Journal of Public Health, 38(2), 197-205.

^[xiv] Crane, M., and Warnes, A. M. (2000). Evictions and prolonged homelessness. Housing studies, 15(5), 757-773.

^[xv] Desmond, M. (2016) Evicted London: Penguin Chapter 9

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Creativity has been in the news quite a bit over the last week. There’s been Theresa May calling for a more ‘creative’ approach to the Brexit disaster. There’s also been a major policy report on the Creative Industries. The latter has been part of the government’s industrial strategy, one of nine industrial activities targeted for specific ‘sector deals’. The others include quantum technology, clean energy, and robotics.

The rhetorical prominence of creativity in May’s speech, delivered on the same day as this set of policy recommendations, might seem to be great news for those working in creative jobs. On closer inspection both the rhetoric and the policy reality raise major questions about the role of creative industries in Britain today. Most seriously, both rhetoric and policy are based on fundamental misunderstandings of what the creative industries are and how they operate.

The Independent Review of the Creative Industries was written by Sir Peter Bazalgette, former chair of Arts Council England. It identifies the creative industries as a potentially booming part of the economy, contributing employment and economic growth, as well as having high levels of productivity. It also sets out several challenges, including access to finance for creative businesses; creative clusters; international competition; skills shortages and the ‘talent pipeline’; along with innovation and intellectual property. These are crucial issues. These headlines from the report, about the strong growth and international reputation of British creative business, conceal a set of proposals that will do little to address the inequalities at the heart of creative industries in the UK.

The report lumps together several different occupations under the heading of creative industries, which is a longstanding issue for policy in this area. This means that high performing areas, such as database design by IT consultants, are treated as the same sector as creative and performing arts. As extensive research shows, these are very different types of activity with very different workforces and very different levels of economic performance. The report seeks to have its cake, of economic good news from technical IT activities, and eat it too, by suggesting this applies to attractive cultural occupations such as acting, art, or performance.

These latter occupations are well known for the unequal and unfair characteristics of their workforce. The report pays lip service to these issues of inequality in the creative workforce. It identifies barriers to entry associated with class, gender and race. At the same time, it is open about its position that ‘employers alone will not solve this problem’. Its recommendations suggest there is an undersupply of skills for the creative industries; that young people need more role models; and they need to be made more aware of the diversity of jobs available in the creative economy.

All of these suggestions move the responsibility for the institutionalised sexism and racism across the creative sector from employers and organisations to the individual. If we ask why the low level of women in senior roles in IT; why the constant controversies about representations of BAME communities in film, TV and on stage; or about the ‘class ceiling’ for actors, then the report’s answer is clear: women, ethnic minorities, and the working class (all of which are intersecting and overlapping constituencies) just need to try harder, be more aspirational, and work on their skills for businesses. In effect, a crucial intervention into government industrial strategy is asking those communities excluded that they must just strive harder.

It is well known that the creative industries, as currently organized, are a closed shop, open to very few that are not privileged. The irony here is that they are also a sector, as a wealth of academic research shows, that believes in meritocracy, and is left wing, and supportive of diversity. The sector is also unlikely to have voted leave and it is supportive of many social issues, such as freedom of movement or immigration, which leave voters reject. Indeed, Bazalgette’s report makes it clear that visas and immigration are a crucial element to the economic success of creative industries.

This point returns to the rhetoric of May’s speech. By calling for ‘creative’ solutions to the problem of Brexit, May is addressing a sector of British society least ideologically interested in supporting her agenda. She is also, in her pursuit of a ‘creative’ relationship with the EU that foregrounds immigration control, likely to further alienate creative workers and damage creative businesses. Taken alongside the focus on talent pipelines and skills development in Bazalgette’s report, industrial strategy may produce a creative sector that does little to encourage those from outside privileged starting points, whilst being even less likely to show support for the goals put forward by May and the Brexiteers.

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Ten years ago the wheels started to come off the UK economy and we saw the beginning of the financial crash. Fast forward a decade and people are beginning to question what has really changed. As Torston Bell put it in the Guardian: “The financial crisis highlighted the big challenge of our time: to ensure the economy delivers for working people. Looking back over the last decade, it’s clear we have far from delivered.”

The biggest shift the economy has seen has been the reform of the public sector. But from Brexit to the general election, more and more people have been calling for a bigger transformation of the economy to one where people have control, one for the ‘many not the few’ or one that ‘works for everyone’. YouGov polling earlier this year showed two thirds of people say they have no control over the economy, and only quarter think they can influence either their workplace or their local area.

Yet this change has not come, or at least not yet. Beyond small regulatory changes there has been no significant shift on key issues like the regulation of the financial sector or steps toward the reduction of inequality.

Over the last two years we at Co-ops UK have been talking with a wide range of people involved in co-operatively-run organisations – worker owned businesses, housing co-ops, credit unions, freelancer collectives, farmer run businesses and the like. There are 7,000 co-ops in the UK in all, working right across the economy and together they turnover £34 billion a year. Businesses like the Queens Enterprise Award winning Suma Wholefoods and dairy giants Arla demonstrate they are already successful players in the economy. What sets them apart, of course, is that they are businesses owned and run by the people most affected by them, who have an equal say in what they do and how their profits are used.

We have been talking to them about how we can grow the number of co-operatively run organisations in the UK, with an aspiration that in 20 years one pound in every ten will be spent in a co-operative or mutual business. It’s an ambitious target, but one drawn from the fact that co-ops are already significant a part of the UK’s private sector and through concerted effort we can extend that number and their reach.

With 550 organisations we have co-created a strategy to help make this happen. Called ‘Do it Ourselves’ it is based on the recognition that we cannot wait for new government policies or a sudden wave of enlightenment; we need to just get on and do it ourselves. There are three guiding principles:

Commit to being great. Existing co-operatives are the inspiration that draw people to start or join a co-op. We need co-ops to be exemplars – in governance, in member engagement, in making a difference. We need existing co-operatively run organisations to keep on doing what they do best, and do more of it.

Be open to new co-operation. Co-operatives are a tool to help people take ownership of things that matter to them, whether that’s accessing decent food, housing, work or healthcare. People co-operate naturally and we need to identify and support people who are coming together to address the issues that concern them by forming new co-ops.

Inspire more co-operation. While co-operation is a natural instinct, it often takes some inspiration to get started. Through campaigns and brilliant examples, we need to inspire more and more people to see how working together can enable them to take ownership of the things that matter to them.

There is no part of the economy that co-ops can’t work in, whether it’s our broken housing market or supporting farmers to achieve economies of scale. But there are three areas that stand out as needing co-operative approaches right now.

First, social care. Almost every day we hear about the social care crisis. In part this is about a lack of funding. But it also about the way social care is organised. Co-operative approaches to social care allow the workers and users to own and control what organisations do, allowing them to be more responsive to the needs of the people affected by it. In Wales, a large charity, Cartrefi Cymru, has converted to a co-op because it has recognised the importance of having input from a range of stakeholders into the running of the organisation.

Second, the gig economy. As the number of people in self-employed work continues to grow so does the number of people in precarious work. Coming together in co-ops – often in collaboration with trade unions – is a way for these workers to achieve financial security and create a safety net for themselves. Indycube is a new co-op for freelancers that is working with the trade union Community to provide back office services to freelancers, offering a model for how co-ops for the self-employed might develop.

Third, technology workers. The number of people working in the digital economy is growing fast, and for many tech workers having a say in what they do is as important as what they do. Worker ownership – which evidence shows leads to greater levels of productivity and staff satisfaction – is a natural way for tech workers to organise. Co-Tech is an energetic new network of technology co-operatives, sharing work and spreading the worker co-op model, with a goal of growing 100,000 jobs in the sector by 2030.

In the last ten years, since the financial crash began, there have been growing calls for a fairer economy over which people have more say, yet there has been little movement toward it. Over the next two decades, through a focus on key areas of the economy where new approaches are needed, perhaps we can start to shift toward a different kind of economy.

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For most of the last decade, I’ve been a reporter, covering stories on how technology is reshaping public life, from debates about God to protests in the streets. One thing I’ve noticed is that Internet culture has an odd way of using a really important word: democracy. When a new app is said to be democratizing something – whether robotic personal assistants or sepia-toned selfies – it means allowing more people to access that something. Just access, along with a big, fat terms of service. Gone are those old associations of town meetings and voting booths; gone are co-ownership, co-governance, and accountability.

Words are the tools of my trade as a writer, so I like to have a handle on what they mean. We rely on them so much. They connect us to each other; they remind us what we’re capable of. And I hope that the Internet can help us make our definitions of democracy more ambitious, rather than redefining it out of existence.
In late 2014 I was reporting a story about Amazon’s Mechanical Turk platform, a website where users can find entirely online piecework – jobs that might take between seconds and hours, like transcribing a receipt, providing feedback on an ad, or taking a sociological survey. I went to Trebor Scholz’s Digital Labor conference in New York, which included real-life Mechanical Turkers. One was a wife whose husband lost his job, for instance; another was a former cable technician. I heard them describing what working on the platform is like. Employers can review them, but they can’t review employers. Their work can be rejected with no remuneration or recourse. There are no constraints to prevent below-minimum-wage pay. One of them complained in the media and her account was frozen.

Over the course of those days, a kind of question kept coming up among the Turkers, a thought experiment. They wondered aloud: What if we owned the platform? How would we set the rules?

They’d sit with that for a minute or two, batting ideas back and forth about how to make the platform better for themselves – and for Amazon. Reasonable ideas. Clever ones. But then the ideas would fade back into reality again: back to the complaints.

Since then the agonies over the dictionary-altering Internet have only intensified. People have blockaded Google Buses to protest wealth inequality in San Francisco, and Uber drivers have gone on strike around the world. Increasingly this online economy is becoming the economy – the way more and more of us find jobs, relationships, and a roof over our heads. Internet companies aspire to network and monetize everything from our cars to our refrigerators; the companies call this the “Internet of things.” But the Turkers’ questions have kept coming back to me.

Were they on to something? What if the platforms and networks really were ours? What if we had an Internet of ownership?

Real sharing, real democracy

Another word that the Internet has gotten to is sharing. Sharing used to mean something we do with the people we know and trust. In the so-called sharing economy, it means more convenient transactions that take place on distant servers somewhere. Convenience is great, but all along there has been a real sharing economy at work, the cooperative economy.

One can trace the modern cooperative movement to the Rochdale Principles of 1844, in England, though it had precursors among ancient tribes, monasteries, and guilds around the world. The rudiments of this stuff could be basic common sense: shared ownership and governance 16 among people who depend on an enterprise, shared profits, and coordination among enterprises rather than competition.

We might not know it, but co-ops are all around us. In Colorado, where I live, 70 percent of the state’s territory gets its power from cooperative electric companies that date to the 1930s and earlier, owned and governed by the people they serve. The credit union where I’m a member is one of the top mortgage lenders in the region. Up in the mountains west of me, some years back, a group of neighbours started their own co-op Internet service provider. There’s also Land O’Lakes, Organic Valley, and REI.

Co-ops come in all shapes and sizes. They fail less than other businesses, and they often pay better wages (except to top executives). Democracy, it turns out, works – though it can be less lucrative for those just trying to get rich. People in charge are harder to swindle.

I lived in a co-op house once; it followed a certain dirty, organic, folk-music-every-night stereotype. The same couldn’t be said, though, for what I saw at Kenya’s business school for managers of cooperatives. There, co-ops hold about half the GDP, and those students looked like business students anywhere – except that, along with all the marketing and case studies, they were also learning how to run a company where the people who work for you are your bosses. In the area around Barcelona, among the thousands of members of the Catalan Integral Cooperative, I got a glimpse of what twenty-first-century cooperatives might look like. Rather than securing old-fashioned jobs, these independent workers help each other become less dependent on salaries, and more able to rely on the housing, food, childcare, and computer code they hold in common. They trade with their own digital currency. In cases like this, the traditional lines between workers, producers, consumers, and depositors may become harder to draw.

Part of the cooperative legacy has played out in tech culture already. The Internet relies on free, open-source tools built through feats of peer-to-peer self-governance, like Wikipedia and Linux. Visit many tech offices, from a startup’s garage to the Googleplex, and there are self-organizing teams creating projects from the bottom up. Yet somehow this democracy doesn’t seem to make it to the boardroom; things are still pretty twentieth-century corporate in there, with whoever happens to own the most shares calling the shots. There’s a firewall. We can practice democracy everywhere, it seems, except where it really matters.

There are some pretty sci-fi questions before us these days: Will apps and robots replace our jobs? Will any aspect of our digital lives escape the notice of surveillance? Can there be a digital utopia without the dystopias of sweatshops and blood minerals? In each case the cooperative tradition poses necessary questions, which in the onrush of change we may neglect to ask: Who owns the tools we live by, and how are they governed?

Platform commons

Cooperative enterprises of the past and present have relied on two kinds of strategies to gain a foothold in economies and cultures premised on competition. One is the competitive advantage to be found in cooperation – the ability to succeed where conventional markets fail, for instance, and the power latent in solidarity. The second is when the rules of the system are changed to support more cooperative practices – especially through governments that see the value of cooperative enterprise enough to encourage and fund it. For platform cooperativism to flourish, I suspect we need both of these.

We can begin by identifying the competitive advantages of cooperation. Cooperative practices, for instance, are poised to thicken the notoriously loose ties that online connectedness normally offers. And as big tech companies continue having difficulty treating workers and users as – well, people – co-ops can offer positive, ethical alternatives that workers and users can turn to. Hybrid models – combining aspects of a conventional company with aspects of cooperative ownership and governance – seem promising in the short term. Yet the rules of the system remain very much tilted against cooperativism.

This needs to change. Governments should recognize that cooperative platforms will mean more wealth staying in their communities and serving their constituents. Rather than trying (and failing) to say “no” to the likes of Uber, platform co-ops are something public institutions can say “yes” to. We need laws that make it easier to form and finance co-ops, as well as public investment in business development – stuff that extractive businesses get all the time.

This also means thinking differently about the incumbents. The Facebooks, Googles, and Ubers aren’t just regular companies anymore. Their business models are based on how dependent so many of us are on them; their ubiquity, in turn, is what makes them useful. They’re becoming public utilities. The less we have a choice about whether to use them, the more we need democracy to step in. What if a new generation of antitrust laws, instead of breaking up the emerging online utilities, created a pathway to more democratic ownership?

Rather than donating Facebook shares to his own LLC, Mark Zuckerberg could put them into a trust owned and controlled by Facebook users themselves. Then they, too, could have a seat in the boardroom when decisions are made about what to do with all that valuable personal data they pour into the platform – and they’d have a stake in ensuring the platform succeeds. How would you vote?

These aren’t just questions about what kind of Internet we want, or even what kind of world we want; they’re about how we see ourselves. Do we trust ourselves enough to expect democracy from the institutions on which we rely? Are we bold enough to imagine, as the Mechanical Turkers were, what the Internet would look like if we were in charge?

Thirty years ago, when the Internet wasn’t much more than a lab experiment, the social critic Theodore Roszak saw a lot of this coming. “Making the democratic most of the Information Age,” he wrote in The Cult of Information, “is a matter not only of technology but also of the social organization of that technology.”

We forget that. New gizmos come and go so quickly that we hardly notice when the meanings of our words change, and when what we 19 expect of ourselves changes with them. Ordinary people have already made the Internet their own with their hacks, their memes, their protests, and their dreams. The cost of forfeiting control over these things is too high, and too mysterious. We need to expect better, to demand more. It’s time that we own and govern what is ours already.

This is an extract from Ours to Hack and to Own: The Rise of Platform Cooperativism, a new vision for the future of work and a fairer internet, edited by Trebor Scholz and Nathan Schneider and published by OR Books

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In early 2015, a group of bicycle couriers got together to work out how they could get a pay rise. They hadn’t had one in 15 years, while costs inflated by 58%, meaning a pay cut of over a third in real terms. In February of that year they joined the Independent Workers Union of Great Britain (IWGB) founding the Couriers and Logistics Branch (CLB). After 9 months of campaigning against CitySprint, London’s leading courier company, out of the blue drivers received notice of a 50p increase per delivery – a significant hike. CitySprint must have thought this would be the end of it. It was just the beginning.

“It’s nice to have a pay-rise,” Mags Dewhurst says, “but a lot of the problems in our industry are because of the bogus contracts that we’re on, and these contracts underpin all the layers of exploitation. We can be fired at any moment; we won’t get any holiday pay; and we’re still suffering the fluctuation of the supply and demand equation.” Dewhurst has just won a lawsuit against CitySprint. In a similar spirit to the ruling in last October’s case against Uber, or the recent success against Pimlico Plumbers, the judge ruled CitySprint’s classification of Dewhurst as an ‘independent contractor’ unlawful, and awarded her paid leave.

“If you look at their finances from 2008, their turnover has been increasing year on year by about 15%. You know, it’s meant to be a fucking recession,” Dewhurst says, pointing out that couriers’ work is hard, dangerous and important, with professional couriers often delivering such supplies as urgently needed chemotherapy. “You’re sitting there thinking, where’s the money going, because I’m working harder and harder, but earning less and less, and the company that I work for is defying all the financial stories that we’re told, about why we should accept less and why we should accept austerity, whilst my CEO gives himself a 55% pay-rise in 2013.”

The CLB employs a two-pronged approach, matching strategic legal action with on-the-ground campaigning, demonstrating a more dynamic, cooperative and horizontal model that responds to recent developments in the world of work than more traditional unions have proved able to initiate. As vastly more people file as ‘self-employed,’ there is an urgent need for innovative unions – forging alliances with coops, say, to more staunchly defend against precarity. They are, says IWGB Vice President Jon Katona, “moving at their own pace,” and Dewhurst’s recent win represents one ‘prong’ of this vision, which is picking up speed as Deliveroo IWGB-affiliated workers commence industrial action in Brighton, and now in Leeds with the Industrial Workers of the World, after a successful campaign in London last year. The IWGB is calling on the government to expand rights associated with worker status, and make it easier for claimants to access justice, since currently these contracts also prohibit workers from suing their (non) employer.

In Brighton, drivers supported by the likes of Labour’s John McDonnell and Green MP Caroline Lucas are to begin a high profile campaign after bosses at Deliveroo have refused to come to the table to discuss calls for a £1 pay rise per delivery. Though Deliveroo seemed to capitulate to a freeze on hiring, which was resulting in too many workers for too few jobs, they have refused to engage further. In a statement sent to drivers, they explained their hiring methods by saying, “when there aren’t enough riders at these peak times, resulting in delayed or unaccepted orders for customers, our system believes we require more help and begins to look for new riders in the area.” This means that the company recruits on the basis of demand at the busiest times, and means it is impossible for a courier to be fully employed the rest of the time.

Deliveroo have since sought to clarify this statement, denying that any freeze went on and telling openDemocracy they are “providing the well paid, flexible work which riders want.” This serves to obscure the reality that the majority of workers in the courier industry are in already precarious positions, and fails to interrogate why it might be that the gig economy more broadly employs a disproportionately immigrant workforce, people who are compelled to take up casual work because of the systemic racism which denies them more stable employment. Deliveroo also told me it doesn’t recognise any of this as industrial action since “the IWGB doesn’t represent our riders” – odd since its drivers have signed memberships – in a bid to double down on their status as independent contractors.

The union began by representing underpaid cleaners, invariably migrant workers, at London universities in 2012, and has most recently established a branch for foster carers. Campaigns such as Justice for Cleaners at SOAS university and the 3 Cosas campaign splintered from larger unions and reformed under the banner of the IWGB. “A lot of people are Polish in the courier industry, or Brazilian,” Katona says. “It’s a fact of the type of work that this is, because it’s low-wage, low-security, low-prospect. It’s the sort of work that’s more available to people who… are already vulnerable. They don’t have the same chances of securing financially secure and stable jobs, so this sort of precarious work is something they end up falling into.”

Deliveroo’s description of their system – and their stated refusal to curtail it – also betrays the workings of a more pervasive and deliberate strategy on the part of similar platforms to shirk responsibility for workers’ livelihoods: to falsely present the degradation that results from a ferocious capitalist business model as the unavoidable fluctuations of efficient technology which simply tries to give buyers and sellers what they want. These platforms profit from the ‘smart’ economy by exploiting and compounding existing precarity.

Workers and the public interface with companies which cultivate a futuristic image, set to ‘disrupt’ value networks and expand exponentially to conquer new markets, unleashing a tide of consumer convenience that can’t be turned back. The rapidity with which these companies scale up is only possible, as Dewhurst points out, because they don’t have to cover basic infrastructural costs – of vehicles, holiday pay, sick pay or national insurance. The same logic enables them to throw their hands up – “we’re just a tech company” – and defuse the political connotations of being a worker by casting employees as entrepreneurs who get a kick out of being their own bosses.

This myth of irrepressible technological advancement feeds off the great neoliberal chimera that markets must be allowed to abide by their own laws, shown up for its true nature when governments rushed in to shore up the financial system in the 2008 banking crisis, as Will Davies, among others, has argued. Instead, say groups like the IWGB, here is exploitation old as time – with a shiny new face: “the technology allows them to keep the workers at arm’s length, so that they can hide behind this idea that an algorithm is controlling it,” Katona cautions. But it’s this same distance that has so far enabled workers to organise themselves to great effect.

It’s for the rest of us to resist a culture which continues to sanctify corporate greed and consumer convenience at any cost. Innumerable services are being skimmed in this way, and we should be mindful that technology has created new scope for labour to be undercut right down to the bone. Automation could herald a world beyond work, but not under current arrangements of eroding social protections and a lack of decent regulation for evolving markets. Unions like the IWGB and those in a-to-b industries are at the forefront of challenging this onslaught, but shorter contracts, piecemeal payment and absent protections are on the rise across the board. These companies don’t care about their employees – but they do care about their public image and their profit margins. Keep track of their attempts to wriggle out of these basic requirements; things can get worse.

The post Organising the workers whose jobs are made precarious by technology appeared first on New thinking for the British economy.

“Blockchain technology will let us build the internet afresh, and better. Its novel approach to organising data and decision-making will totally disrupt everything from publishing and text messaging, to banking and government. It gives revolutionary new hope for society, across the board.” So say the pervasive blockchain evangelists stalking our internet ;-p

Many readers will know the blockchain as a recent technology that enables peer-to-peer communities to manage currency, governance and a host of other activities which previously required intermediaries, like governments and banks. The internet relies on databases to manage information which is accessed by web users. The blockchain is a new kind of distributed database, which depends on the networked computers of ordinary users to keep it running and keep it accurate.

In general, all data in this kind of database, whether that’s data on money transfers or electoral votes or social media posts, is visible to all users and cannot be tampered with by a higher authority, such as a government or a bank. Its workings are determined by the user community, whether that community is a small group of local residents, or every computer user on the planet.

Since its advent as the technical foundation of Bitcoin, a novel form of digital money, there have been countless lofty claims about the blockchain phenomenon. Now that blockchain is well into its 2.0 phase, with the Ethereum project giving rise to blockchain-based allsorts, including voting systems and legal apparatuses, critics are similarly widespread, ready to complicate this hope.

In spite of the debates, the blockchain space is a classic case of coders getting on and creating their idea of the future regardless. Bitcoin has been an unstoppable demonstration of the possibilities and has set major precedents for the digital future. Similarly, new frameworks and experiments are today being deployed, which aim to shape standards for governance, the economy and the wider information society. Whether we like it or not, whether deemed legal or otherwise, we can see networked blockchain initiatives defining the future today.

As with so much technology, the frontier moves ahead regardless of critics, states and their populations. Citizens need a role in making these realities, so we must join the action, learn the tools and forge them for our own needs, putting “society in the loop”.

Whilst we must think critically about the developments, we see the nascent blockchain technology as a potent site for novel, positive economic and political change. Its unique offering of decentralised (or distributed) peer-to-peer control over the management and record of transactions, means that institutions, like banks, that we have traditionally trusted – or rather had to trust – to intermediate between us can be side-stepped. The software involved is designed to allow networks of ordinary computer users – who might be based all over the world – to come together to create a collectively-run network that they trust, thanks to cryptographical techniques that allow data to be securely stored and shared. The software is typically based on collaborative, open-source principles and so allows us to achieve greater consensus and fine-grained control over how it operates too.

There are so many examples of viable and visionary blockchain projects in production – from social media network AKASHA to governance app Boardroom. AKASHA, for example, stores social media posts on a shared, public blockchain that anyone can download and use, forever – which, they hope, makes those posts immune to censorship.

OurCoin: crafting a currency

To explore the blockchain’s potential benefits, we considered a novel blockchain-based currency and economic governance system. Let’s call it OurCoin – a currency amenable to the needs of a community that espouses values of fairness and equality, which even the IMF is calling for more of. These virtues are notably absent from most monetary systems.

The Bristol Pound is a British community currency with specific features desirable to its users.

Here we envisage key, possible features of the currency, which blockchain technology would enable.

1. Preferences against extreme inequality could be incorporated into the design of the currency. For example, individuals holding wealth above a certain threshold could see excess coins in their accounts redistributed for the community’s benefit. This policy is similar to a wealth tax but more direct and transparent – demonstrating how OurCoin can bring monetary and fiscal policy together. The community could democratically decide the specifics of the redistribution, such as funding a community or infrastructure project.
2. Monetary policy could be directly managed by popular approval too. Consider demurrage – when the value of your money falls if you hold it for more than a certain period of time. This could be a feature of the currency used to disincentivise hoarding and stimulate economic activity. Freicoin already exists with this feature to “eliminate the privileged position held by money compared with capital goods, which is the underlying cause of the boom/bust cycle and the entrenchment of the financial elite”. As with any element of OurCoin’s design, demurrage could be weighted in various ways such as to primarily target hoarding of large cash piles, such as the billions currently held, unproductively, by large global corporations.
3. The community can even offer people different ways to obtain the currency. For example, it could be issued to meet the needs of today’s economy, such as through universal basic income. Or, workers and firms active with OurCoin could receive it at a preferential rate (as opposed to those obtaining it by, for example, buying it with other currencies), which would also incentivise economic activity within the system.
4. Incentives could be introduced to encourage spending that supports the community, either directly (e.g. shopping at local businesses) or by supporting the ethos of community members (e.g. the community may want to encourage spending in low versus high carbon industries).
5. The community could vote to pardon individual debts held in the system through debt jubilees.

Further specifics and other ideas could come from ongoing community consultation, or expert input – from governance experts, political philosophers, economists, psychologists and sociologists.

With OurCoin It would be possible for all users to vote, policy by policy, on the precise mechanics of the system. Difficult decisions, guided by expert insights, might come to be made with the help of integrated, next-generation systems which allow democratic processes to benefit from the best ideas as with alternative, delegative democracy models.

Our currency would include the ability to pivot, incorporating new policies and features over time, as elected by OurCoin holders. In this way, the community can learn, experiment and decide to change the currency rules as appropriate. This process would be highly accessible, encouraging explanation and incentivising collaborative development, even on the minutiae of the system’s functioning. It is something like this that shapes the development of community-run Facebook-alternative Diaspora.

We hope to recruit users, including those who are wealthy in other currencies, to use OurCoin in spite of the impact that e.g. redistribution may have on their own wealth. The attraction would not only be a more just, democratic economic system, but also the growing wealth of services available exclusively, or on favourable terms, to OurCoin users – “there’s only one way to pay for this particular massage, Mr. Hammond”. We believe that through experimentation, the community of users could quickly explore and develop an economic system that works better for everyone. Even those people who are currently wealthy in other currencies could prefer OurCoin, despite its redistributive tendencies, if it offers a more stable and prosperous system too. This would become more effective at scale.

Making OurCoin your coin

One of the active lines of research and practice in the blockchain universe reduces the barrier to entry for people or communities wanting to set up systems of this sort, along with customisations specific to their needs. What once required immense logistical capacity and resource, can now be brought about by small groups of dedicated citizens.

At the practical heart of the project, economic ideals and mechanisms manifest in the currency’s rules of operation would give people the opportunity to vote for and live by an alternative, with their cash and their labour. Whilst the exact mechanisms required to create an equitable yet productive economic schema of this sort may take time to perfect, we have the means here to try them out, and move towards a better way. If we can show a workable, attractive system, people will be induced to buy in. Much like the technology of the blockchain itself, once it’s been proven, there’s no turning back – you can’t unsee it.

The most radical effects, such as wealth equalisation, can only occur once the currency achieves really significant volume and has enticed people to bring a large part of their own economic activity into it, in some cases at significant personal expense. That is a longer term goal which requires the development of a truly abundant ecosystem within the confines of OurCoin, so we must show that the incentives we create are sufficiently effective. Those incentives will certainly be unlike others that have gone before, given the fine-grained focus of such code-based systems. Nevertheless, the likelihood of making these extraordinary currency conditions succeed is an open question.

The global economy has always been a massive experiment; one that blundering politicians, unaccountable global institutions and corporations currently have disproportionate power over. Citizens deserve the chance to design their own money.

Implementing a blockchain-based economic system, like OurCoin, at a national or global level requires revolution or long transition. But experimenting to demonstrate it just requires some participation in a complementary currency. The blockchain enables us to do this at a scale not seen before.

Here’s your chance to help design something better.

In the spirit of open collaboration, please add your own ideas, criticisms and desires for this model in the comments or as annotations with hypothes.is.

The post We design money with the blockchain appeared first on New thinking for the British economy.

Ian Sinclair interviews George Lakey about the popular uprisings which led the Nordic economies to be the most successful on earth.

Active in social movements since the 1960s, in 1971 American George Lakey co-founded the radical group Movement for a New Society, and in 1973 he wrote the influential book Strategy for a Living Revolution, a guide for achieving nonviolent revolution. More recently he was Visiting Professor of Peace and Conflict Studies at Swarthmore College in the United States and has been involved in the Earth Quaker Action Team campaign opposing mountain-top removal coal mining.

Now 79-years old, Lakey has just published Viking Economics: How The Scandinavians Got It Right – And How We Can, Too. Having married a Norwegian, lived in Norway for a year in 1959 and visited the region many times since, he argues the superior Nordic model is within reach of the neoliberal US and UK, although it will take large-scale struggle with the economic elite to achieve it.

I interviewed him about ‘the Nordics’, their history and how their social and economic policies could be won in the US and UK.

Ian Sinclair: What have the Nordic countries “got right”?

George Lakey: What economists call the Nordic economic model generates an extraordinary amount of both equality and individual freedom. We can see the synergy on both small and large levels in those countries.

All new parents, for example, are offered many months of paid family leave when they give birth or adopt. In a mixed-gender couple, part of the leave is reserved for the male. If he refuses to take his part of the leave, the couple loses his part of it. With parental paid leave each member of a couple experiences fuller opportunity to parent in the first year of a child’s life – or not, as that person chooses. In other societies that opportunity would be reserved for the better off. At the same time, the policy nudges the couple toward equality in roles and responsibilities.

This is one of a thousand features supporting both equality and freedom made possible by the Nordic design. A macro example is a typical large Norwegian corporation being owned largely by government but individuals invited to own shares as well up to a certain amount. Widespread public ownership, alongside the large cooperative sector, reduces the inequality that otherwise accompanies an economic market. Substantial individual wealth and inheritance taxes further reduce inequality.  Nevertheless, the entrepreneurial spirit is alive and well, and there are more start-ups in Norway per capita than in the US. Entrepreneurship can be seen as the application of creativity, and it gets public support just as does the thriving sector of performing arts.

While the countries I studied – Denmark, Iceland, Norway, and Sweden – may share an economic design with a half century track record of remarkable outcomes, they are not utopias. Norwegians admit to me, “We are a nation of complainers.” I’ve met many Nordics who see more problems that need to be solved.

IS: In your book you note that at the turn of the twentieth century the Nordic countries had very high levels of inequality and poverty, with many people emigrating to the United States and elsewhere. However, as you say, today the Nordic countries consistently top international measures for human development and well-being. How did this transformation occur?

GL: People organized themselves into mass direct action movements to force the economic elite out of dominance. Of course the privileged defended themselves, suppressing the press, jailing organizers, hiring strikebreakers. The historic details vary for each country. In each case it required cross-class alliances.

In Norway the elite organized the Patriotic League in 1926 to wade into strikes and violently defend replacement workers. In the ‘30s [the government minister Vidkun] Quisling organized a Norwegian Nazi paramilitary force to march in the streets to provoke violent clashes with working class activists. Nonetheless, the nonviolent militancy in the workplace and rural areas made the country ungovernable, and the economic elite was forced to allow the workers’ and farmers’ movements to take leadership of the country.

For Sweden the turning point came in 1931 when, in Ådalen Valley, workers struck three lumber mills at once and four thousand workers picketed the owners and government officials. Troops fired into the workers’ march, killing five and injuring five more. The workers called a national general strike, forcing the conservative government out of power and replacing it with the Social Democrats who ruled almost without a break until 1976.

IS: You also discuss the key role played by trade unions in this transformation.

GL: To make a nonviolent power shift a mass of people whose cooperation is necessary to operate the system must be willing to force change by withholding that cooperation. A century ago, when nonviolent struggle appeared to have only a few tactics in its arsenal, the obvious means of noncooperation was the strike. Industrialization was generating the “nonviolent soldiers” who could do strikes: the workers. These days we know far more nonviolent tactics that can make a country ungovernable. Mass noncooperation can be precipitated in more ways than the Nordics did, so today’s revolutionary strategy is not so dependent on the workers and their unions.

Union organizations, of course, vary widely on their willingness to wage class struggle. The Nordics give us a recent example.

The influence of Thatcherism in the 1980s became threatening to Scandinavians and the unions there lost confidence. The governments of Norway and Sweden relaxed some bank regulations, with nearly disastrous results. Observing this trend among their Viking cousins and knowing Thatcherism was also growing in Denmark, the Danish workers defied their own unions and launched a general strike in 1986, including barricading parliament in its building in Copenhagen. The workers frustrated the neo-liberals’ plans and prevented Danish bankers from running wild. Remembering the distinction between the union leadership and the members can matter for strategy.

IS: What is the current political situation in Scandinavia today? Are the gains made by the social movements in the twentieth century holding firm or being degraded?

GL: Forcing a power shift in the last century doesn’t mean the class struggle disappeared. Small countries are vulnerable not only to internal tensions but also to manipulation by global market forces. Knowing this, Norway refused to join the EU, even before it gained the security of its oil find. Norwegians could see that the EU was led by neo-liberals, and they wanted the freedom to continue on their left course. Sweden and Denmark did join the EU but stayed out of the Eurozone, maintaining maneuvering room for themselves.

In my book I present a mixed picture of today’s Nordic class struggles: both losses and wins.  Here are a few of the many on both sides. Inequality has risen, although they remain at the top of the heap for equality. Belts are tightening on services, although they are still far more generous than other countries. Sweden struggles with maintaining the Nordic full employment policy. The mighty cooperatives are not matched by achievements in worker democracy in the other workplaces.

On the other hand, Sweden took in per capita the most Middle Eastern refugees of any European nation. Norwegian citizens can challenge Norwegian corporations’ behavior in the Global South and force changes. Iceland only a few years ago jailed bankers and brought down their government in the “Pots and Pans Revolution.” All the Nordics are speeding ahead in addressing climate change.

The Nordics remain largely faithful to their trademark approach to benefits: not means-tested (“welfare”), but applied to all (universal). I don’t call those countries by the misleading term “welfare states.” They are actually “universal services states,” and that is key to their success in virtually abolishing absolute poverty.

IS: What strategies and tactics do you think activists in the US and UK should employ to move from our current neo-liberal, high inequality economies to something approximating the Nordic Model?

GL: First, we should learn from the example of the Danish 1986 general strike: “go on the offensive.” The Danish workers didn’t just try to defend previous gains – they fought for further gains for working people.

Gandhi and military generals agree on at least one point: nobody wins anything on the defensive! The activist history of the UK and US since the Thatcher/Reagan counter-revolution sadly forgot this strategic necessity of staying on the offensive – and paid the price. In fact, the biggest UK/US activist win since 1980 has arguably been rights for lesbian/gay/bisexual/trans people. The LGBT struggle stayed vigorously on the offensive!

Remaining on the offensive requires a vision of what we truly want. Vision is where our demands should come from rather than from our fear of what we might lose. The Scandinavians a century ago took the time to get out of their little activist groups to gain wide agreement on a positive vision.

This can put radicals in a dilemma. Many Nordic radicals who wanted to win understood that the movement’s vision couldn’t express the full extent of their personal yearnings and still gain broad agreement. The vision had to be seen as practical and achievable within the middle term, a horizon that could inspire all-out struggle.

A sufficient number of middle class intellectual radicals overcame their class training (to be superior, differentiating egos) so they could join the growing mass movement that could unseat the one per cent, thereby opening the space for all kinds of possibilities – even some radical ones.

We are in a fundamentally new political moment from that of the 1920s/30s. At that time, no one knew for sure if there was a variant of socialism that would actually work to achieve a high degree of equality, freedom and shared prosperity. Now, we know. There is a track record, an economy that consistently out-performs the Anglo-American economic model, despite the disadvantages of small countries in a fierce and globalized world. My book shows that the practical argument is now entirely on our side.

What remains strategically is to sharpen the art of nonviolent direct action campaigning that meets people where they are and deepens their skills and knowledge while building ever more powerful movements. It may be time to drop the one-off protest and routine march and rally!  Campaigns with (a) specific grievances and (b) winnable demands and (c) a target that can be forced to grant the demand are the campaigns that empower. Empowered campaigners can then merge into mass movements that – when history opens the opportunity – become a “movement of movements” that can force a power shift.

The Nordic examples are included in an online, searchable database of over a thousand campaigns from nearly 200 countries: the Global Nonviolent Action Database. Campaigns range from those that have overthrown military dictatorships to those that forced local resolution of environmental dangers.

Campaigns are not sufficient to make a revolution, but their vitality, creativity, and escalating confrontation are central in making the power shift that gives us a chance to build the new society, as different from our present order as contemporary Scandinavia is different from that of a century ago.

IS: A common critique of your argument pushing for the US and UK to adopt Nordic-style economic and social policies is that it is unlikely to work as Nordic countries are very different to the US and UK – they are smaller, more homogenous and have very different political cultures. How do you respond to these challenges?

GL: The Nordic countries represent to me small laboratories in which experiments have been tried and conclusions reached. Through theory, trial and error they have achieved “best practices” in many areas, according to third party global measures.

Two attitudes are commonly held toward these practices. The first attitude was voiced by Hillary Clinton in an election debate with Bernie Sanders when he referenced a feature of Denmark’s political economy. “That’s Denmark,” Clinton said dismissively, certain it could have no relevance to the exceptionalist USA.

The second attitude was voiced by a delegation of Chinese economists and policy-makers who were sent by Beijing to investigate Norway. I interviewed researchers in Oslo who had previously received the Chinese. They told me they were surprised by the Chinese government’s interest. I was as well, knowing that China makes the U.S. seem a small and homogeneous country compared with its own size and cultural complexity.

When asked, the Chinese said some economic questions are affected by scale and cultural diversity, and some are not. The Chinese were curious to learn what had been working “in the lab,” eager to identify the features that could scale up to provincial or even national size within China.

As a curious sociologist, who is strongly dissatisfied with the US economy, it is easy for me to be interested in the best practices of others.

IS: Doesn’t the election of Donald Trump as president suggest, if anything, the American population is moving further away from supporting the things that make up the Nordic Model?

GL: The situation on the ground is the opposite from what you imagine. When we compare the votes for Trump and Clinton, we find that more supported Clinton than Trump, but the voters for the major candidates were far exceeded by those who didn’t vote for either Clinton or Trump – almost half the total electorate, most of whom didn’t bother to go to the polls at all.

The election reveals a deepening crisis of legitimacy for the American political class. In November the polls attracted the lowest percentage of eligible voters in 20 years – only 58%. Because of this, our next president was elected by roughly one in four of the eligible voters. And in exit polls, about one fifth of Trump’s voters said they don’t actually consider him to be competent to be president. To me, this does not sound like a mandate from the American people!

The story of voter participation is accompanied by the trend away from registering as Democrats or Republicans; more people are choosing “Independent.” Deep anger and alienation is felt by voters who feel abandoned by both of the major parties. Recent opinion polls asking about issues find majorities backing policies characteristic of the Nordic model, including aggressive anti-poverty measures, decreased rewards to the rich, the equality profile of Sweden rather than that of the US, and actively addressing the climate crisis.

For the history-minded, the combination of declining legitimacy of the established order with preference for an alternative is the recipe for system change.

The 1,000-year ago Viking spirit of expedition emerged in the twentieth century and inspired people to, economically-speaking, go where no one had gone before. We need not be so brave as the twentieth century Nordics were; we do not need to expedition. We can, more cautiously, learn from best practices already established, then take on the struggle with some confidence.

The post How we can win the Nordic model for the UK: an interview with George Lakey appeared first on New thinking for the British economy.

In Theresa May’s first speech as Prime Minister she announced a bold new approach to corporate governance, with a raft of measures aimed at curbing the excesses of executive pay. Last week, the government turned rhetoric in to action, with a Green Paper that included support for the mandatory publication of pay ratios between a company’s highest paid and median paid employee, to apply to all medium and large businesses.

As an organisation that has long campaigned on this issue, we at The Equality Trust are delighted to see light at the end of the tunnel. For those uninitiated with the issue of executive pay, and the importance of pay ratios, let’s start at the beginning.

Excessive executive pay is a key component of economic inequality. Over the past 30 years it has increased at a dizzying pace, outstripping the often glacial progress of median and lower wages. In fact, the average annual pay for a FTSE 100 CEO is now £5.5m – around 183 times the average full-time salary in the UK. Evidence shows that such high levels of economic inequality are hugely damaging for our society, resulting in poorer mental and physical health, worse educational outcomes and lower levels of trust in others. Significant research from the IMF and OECD suggests high inequality may even be bad for the economy.

The most common argument to justify the pay of executives is simply that ‘they’re worth it’. With companies now often global in their reach, and increasingly technologically and logistically complex, those running them are required to have a unique and multifaceted skills-set. The rarity of such individuals means they are worth their weight in gold, so the argument goes. This is, in part, true, but given the skills of many others have also improved, along with their productivity, it fails to account for why the wages of ordinary workers haven’t increased at a similar pace to executives.

This is all the more galling when you consider evidence that suggests that luck is a strong determinant of CEO pay.

In reality, much of the increase in executive pay, and subsequent pay inequality, is a result of the bizarre process by which it is set. While the pay of ordinary workers is determined by executives, the pay of executives is often determined by external remuneration committees. These often fall foul of the so-called ‘Lake Wobegon’ effect, insisting that to get, or retain, the best candidate, a CEO should be paid above the average pay for their peers in that sector (often in the top quartile). The predictable result of all companies attempting to pay in the top quartile is a ratcheting up of executive pay, and a widening of the pay gap. This idea of a common culture in remuneration is supported by the fact that in the US only five consultancy firms control 50% of the market on compensation consultancy.

So why does this matter? Most reasonable people recognise that the success of a business is built on the actions of all employees, and therefore, all employees should enjoy the fruits of this success. Businesses thrive when employees feel like they are valued, and have a stake in the company’s future. When millions of people are poorly rewarded for their hard work, while those at the top carry on raking it in regardless of performance, it’s inevitable that people will feel disillusioned and disconnected from those they work with.

Polling by the CIPD also warns of the demotivating effect on workers of excessive executive pay, with 71 per cent saying bosses’ pay is too high and 59 per cent feeling directly demotivated by it. When you consider more than half of the membership of the Institute of Directors identified ‘anger over senior levels of executive pay’ as a threat to public trust in business, it is clear that such pay inequality provides a serious business risk.

None of this is inevitable. The simplest way to tackle excessive executive pay and reduce the pay gap is to require large and medium sized businesses to publish the pay ratio between their best paid employee and their median earner, as proposed this week. Alongside this, companies should be required to provide an account of why the pay ratio is justified, in particular, if the ratio increases from one year to the next.

There are two benefits to such a measure. The first is the old adage that light is the best disinfectant. With the spotlight on them, it is unlikely companies will wish to appear more unequal than their competitors. The second benefit is the possible effect it will have on pay culture within companies. Rather than divorcing the process of determining executive pay from that of ordinary workers, companies will be forced to consider how their overall approach to pay fits together.

The extremely high pay ratios we now see in many companies are both unjustifiable to large numbers of the public, and often a woefully inaccurate measure of the financial value added by executives. Businesses rely on the trust of consumers. Those companies that see executive pay rocket while the pay of their average worker stagnates will struggle to square that with discerning customers, who correctly question why some organisations see executives as talent to be nurtured, and other staff as a cost to be reduced. Pay ratios are a first, but vital, step to develop a culture of governance where the worth of all employee are considered, and where businesses, and the economy, genuinely benefit us all.

The post Mind the Gap: How pay ratio reporting can help reduce inequality appeared first on New thinking for the British economy.

Back in the 1970s, with unemployment rising and British industry contracting, workers at the arms company Lucas Aerospace came up with a pioneering plan to retain jobs by proposing alternative, socially-useful applications of the company’s technology and their own skills. The ‘Lucas Plan’ remains one of the most radical and forward thinking attempts ever made by workers to take the steering wheel and directly drive the direction of change.

Forty years later, we are facing a convergence of crises: militarism and nuclear weapons, climate chaos and the destruction of jobs by new technologies and automation. These crises mean we have to start thinking about technology as political, as the Lucas Aerospace workers did, and reopen the debate about industrial conversion and economic democracy.

Democratic egalitarianism

What so inspires me about the Lucas Plan is the democratic egalitarianism which runs through its every part – the work processes, the products and even the very technology they propose.

This egalitarian ethic inspired Laurence Hall to make ‘The Lucas Plan’ the focus of a regular gathering of Young Quakers in Lancaster, up the line from the Trident nuclear submarine yards in Barrow.

Eurig Scandrett from the Scottish Green Party made it the theme for Green Party trade unionists because ‘it is the most inspiring example of workers on the shop floor who get self-organised and demand to make what humanity needs.’

The fact that the plan was defeated has not diluted its capacity to inspire. For Scandrett, its defeat demonstrated that ‘it is the vested interests of the military-industrial machine which is the problem, and that workers liberating their collective brain is where the solution lies.’

The broad outline of the Lucas Aerospace workers’ story was familiar enough in the mid-1970s. Workers faced redundancies, got organised, resisted and insisted that their skills and machinery were not redundant. But here they went further. They drew together alternative ideas with those of supportive academics and, with the encouragement of Tony Benn (then industry secretary in the Labour government), produced their ‘Alternative Corporate Plan for Socially Useful Production’, illustrated with prototypes. Management refused to negotiate. The government, under pressure from the CBI and the City, made gestures of a willingness to talk, but would not move against management. The plan was never implemented, or even seriously considered, although commercial companies elsewhere picked up some of the ideas.

So what are the lessons we can draw from this past experience of ‘ordinary’ people organising and sharing their practical knowledge and skills to illustrate in the present the changes of which we dream? Some of the main ones are discussed below.

Lesson 1: Find common ground

A first condition for this group of fairly conventional, mainly middle-aged, male trade unionists to create what became a beacon of an alternative economics was building the organisation that eventually provided the means by which many individual intelligences became what Eurig Scandrett refers to as ‘collective’. Corporate ‘rationalisation’ meant groups of workers were being bought, discarded and the best sold on or used till they fell apart, like sacks of old clothes.

The shop stewards at the different Lucas Aerospace sites forged collective strength by taking action over basic common issues such as wages and conditions. This served to unite groups of workers with very different traditions and interests.

Lesson 2: Build democracy

Immense care and collective self-reflectiveness was needed to bring such diverse groups into a more or less united organisation.

All 35 (or so) delegates had the right to speak at meetings of the multi-union Combine shop stewards committee but decisions on recommendations to be taken back to the workforce were on the basis of ‘one site, one vote’. The decisions were binding on the delegates, who were expected to campaign for them at their local sites, although the sites were free to accept or reject them as they saw fit. This sensitive and consciously protected relationship between the Combine and the sites made it feel as though the members and local shop steward on the office and factory floor were ‘absent friends’, whose presence was palpable.

Lesson 3: Build alliances and look ahead

Although the Combine won victories, they felt as though they were engaged in a labour of Sisyphus – getting national agreement to halt job losses, only to find jobs were being slashed in different places and not because of decisions of local management.

The problem was Lucas’s restructuring towards longer production runs and more computer-controlled machinery, and its shifting investment into other European countries and the United States. The traditional approach of the trade union movement proved inadequate; instead the Combine produced its own experts and made use of outside help to educate and prepare itself.

Lesson 4: Building collective strategic intelligence.

‘We’re in a situation where politics is unavoidable,’ the Combine executive argued, in Combine News, in response to rumours of nationalisation of part of the aerospace industry. ‘Though there have been problems with nationalisation, we could, with the full involvement of all our members, insist on adequate safeguards against many of these. The advantages would be considerable, we would finally be working for our ultimate employers.’

They went on to sow the seeds of the alternative plan: ‘We could insist that the skill and talents of our members could be used to the full to engage in socially useful products like monorails and hovercraft, and that these skills are used in a much truer sense in the interests of the nation as a whole.’

This led to the presentation of the case for the nationalisation of Lucas Aerospace to Tony Benn, then secretary of state for industry. He was impressed: ‘Here was a group who had done the work to anticipate the problem. Others had come to me at the last minute saying their firm had gone bust and what could I do.’

For all his enthusiasm, he did not have the power to agree to nationalisation, but he suggested that the Combine should draw up an alternative corporate strategy for the company.

At first there was some scepticism. But the necessity of finding a new solution drove them on, and beyond management’s framework.

‘The only way that we could be involved in a corporate plan would be if we drew it up in a way which challenged the profit motive of the company and talked in terms of social profit,’ argued Combine delegate Mike Cooley, a designer who chaired the local branch of the technical trade union TASS.

The plan for socially useful production was a carefully phased process. Another Combine delegate, Mick Cooney, a fitter from Burnley, described the challenge: ‘The Combine wanted to know what machine tools we had. To do the Corporate Plan we were having to think as if we were planning. It really made the shop stewards sit up.’ The Combine asked site committees questions aimed to stimulate workers’ imagination: ‘How could the plant be run by the workforce? Are there any socially useful products which your plant could design and manufacture?’

Experiences of all kinds and knowledge of the company’s capacities led to 150 product ideas in six categories: medical equipment, transport vehicles, improved braking systems, energy conservation, oceanics, and telechiric machines.

Lesson 5: Know the limits

The idea inspired workers throughout the defence-related engineering industry, including the vast yards building nuclear submarines in Barrow, where designers worked with Mary Kaldor to submit alternatives to the Labour party defence policy committee. In the 1970’s the yards were owned by Vickers which also made tanks at the Elswick works on the Tyne in Newcastle. In Vickers a strong Combine Committee had been built in response to very similar pressures of rationalisation, acquisitions and closures that had stimulated the growth of the Lucas Aerospace Combine Commitee. Both Combine Committees had links with the Institute for Workers Control (IWC) and through the conferences and political connections organised by the IWC they found common cause in the idea of alternative plans for socially useful production. The shop stewards in the Elswick and Scotwood works responded to threats of reduncancies by drawing up such plans and gaining the support of Tony Benn and his close ally Stuart Holland. They made contact with shop stewards at Barrow, especially in the design office who were already doing their own work on alternatives. There had, in Barrow, been an earlier initiative towards diversification coming from Vickers management, led by an innovative engineer, George Henson, whose Quaker principles led him to refuse to work on the TSR2 at Vickers Weybridge plant and led to his move to Barrow where management wanted to diversify away from total dependence on government defence contracts.

However, Vickers responded to subsequent government nationalisation plans by keeping the profitable diversified section, making submersibles for deep sea oil exploration and handing over the yards to the government. The separation was a major blow to any longer-term diversification programme, but it’s success was a powerful memory for the designers who were still working on nuclear submarines and they were responsive to the contacts from across the country in Newcastle to collaborate on alternative plans to submit to the Labour party’s diversification committee. Labour’s defeat in 1979 closed down these possibilities. Later however, in the 1980s, some of those designers helped to create the Barrow Alternative Employment Committee (BAEC) to produce proposals for alternatives to Trident. By this time the Barrow yards were owned by British Aerospace, which rejected the strategy of civil diversification to keep skilled teams together. BAe concentrated entirely on its ‘core business’ whatever the cost in terms of loss of jobs. The only exception was war ships, the manufacture of which dominated the yards until the recent renewal of Trident.

Terry McSorley, a member of the now defunct BAEC, says: ‘The lesson I learnt is that site-based diversification won’t work’. Instead he now argues for an approach that integrates defence conversion with industrial strategy.

Steve Schofield, who was a researcher for the BAEC, draws a similar conclusion: ‘The Labour movement needs a much more ambitious arms conversion programme to challenge the embedded power of the military-industrial-complex.’ He argues for a change in security policy towards UN peacekeeping and peace building and suggests a combination of publicly-funded, national and regional investment banks for industries such as offshore wind and wave power to ensure an equitable distribution that benefits the small group of arms-dependent communities, including Barrow-in-Furness, Glasgow, Preston, Aldermaston and Plymouth.

Drawing on Lucas and his own more problematic experience in Barrow, he is certain that trade union and community participation is essential to guaranteeing that the skills of working people are maintained and enhanced.

We are in new times for trade union organisation but interest in democratic economics is increasing with the spread of green and solidarity economies, commons-based peer-to-peer production, and grassroots fabrication in ‘hackerspaces’ and ‘fab labs’. All of which has deepened ideas about connecting tacit knowledge and participatory prototyping to the political economy of technology development, as was the case with Lucas.

The lessons from the Lucas plan provide Labour’s proposed arms conversion agency with elements of a methodology for a network of organisations with an understanding of technological development not as a value-neutral process, autonomous from society, but shaped by social choices over its development – choices that the Lucas stewards showed need to become democratic.

This ‘ordinary’ group of workers demonstrated how it was possible to create a democratic economy. It is they, after all, who have the practical know how on which that technological development depends.

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David Clapson died alone in his flat eighteen days after being sanctioned by the Department for Work and Pensions. The coroner found that he had no food in his stomach. David was starving when he died. He was a diabetic, and could not afford to keep his fridge running to store insulin, his bank account showing he had less than £4 to his name.

Last week, the Behavioural Insights Team set up in the early days of the Cameron administration released a report distancing itself from the Tories’ punitive sanctions regime. It stated that the vastly expanded use of “mandatory behaviour requirements” was likely aggravating “anxiety and feelings of disempowerment” among those subjected to them.

The report’s use of the word ‘disempowerment’ is notable here. As it stands trying to make a claim on our social security system can be a crushing experience. Sanctions are administered by a distant ‘decision-maker’, while front line staff are under immense pressure to deal with cases quickly and through strict application of a punitive regime. Individuals must navigate a complex and obscure maze of strict procedures, with few avenues for independent support. These measures are premised on the assumption that poverty is a pathological problem; a result of the flawed character of the individual experiencing it. Punishment is administered as a corrective. The recently released film I, Daniel Blake is a moving depiction of the destructive effect of this lie.

One could argue that the social security system has always been isolating for those who encountered it. The rise of claimants’ unions in the late 60’s can be seen as a direct response to the paternalistic approach to managing the safety net of that time; one which also left the claimant in a weakened position – alone confronting the state’s gatekeepers. The increasing use of sanctions now leaves some both alone and destitute.

A solidarity social security system should start from a different principle; that people are strongest when they work together to improve their lot. On this basis, one of its aims must be to encourage and embed collective action into the process of claiming entitlements.

These days claimants’ unions are few and far between. A decades-long reactionary offensive has eroded the belief that we all have a stake in our social security system, and diminished a culture of communal action to access entitlements. The question then of what a collective approach to social security might look like seems ever more pressing, spurred by the rise of a radical left opposition party.

Many across the political spectrum are calling for a Universal Basic Income, to overcome the fraudulent separation between ‘taxpayer’ and ‘claimant’. But, in lieu of UBI, a solidarity social system could be advanced on two further fronts.

One proposal would be to fund a national programme of peer support, by employing people with direct experience of the social security system to bring claimants together into local groups, offering each other advice and guidance to better navigate the system. This would amount to a network of claimants’ unions, with access to state resources that fostered a culture of solidarity between claimants, reduced isolation, and acted to improve the current poor take up of benefit entitlements.

But what about benefits themselves? Many of the current entitlements are built to support individuals back into traditional jobs. Given Labour’s increasing interest in promoting co-operative models, perhaps a solidarity social security system could look to incentivise more co-operative job opportunities.

Currently, the DWP’s ‘Enterprise Allowance’ provides unemployed people with funding and advice on starting their own business. A solidarity social security system could provide a ‘Co-operative Allowance’, encouraging people to set up co-operatives and providing them with expertise and income while they go about doing so.

When taken alongside each other, these two proposals would both bring people together through their shared experience of claiming entitlements, and provide them with an opportunity to generate a living together co-operatively.

Clearly, whatever happens next, our current, punitive social security model must be challenged. The space for drawing up a positive, left platform has also widened, bringing new possibilities for a solidarity social security system into view.

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The claim that unfettered markets are the most efficient means by which to organise human economic activity should invoke incredulity in the wake of the 2008 economic crash. Yet the ideology underpinning the belief in the rationality of the market continues to shape society, despite its deleterious effects on everything from public services to our most intimate relationships.   

In the face of ideologically motivated attacks on state services, much of the left’s energy has understandably been expended defending the crucial services it provides millions of people. Yet, at times this has been at the expense of developing and experimenting with both non-state and non-market alternatives.

58% of the population believe they have no influence over the British economy and 59% feel they have no control over big business. The sharing economy opens up new opportunities for people to self organise and develop services that better reflect the particularities and needs of their communities. Recent developments in technology mean such alternatives can operate at a pace and scale previously unimaginable.

In our efforts to foster the potential of the sharing economy for a New British Economy, we cannot assume its rise is an automatically progressive development. Airbnb and Uber are reminders of how it can just as easily develop on a model of corporate rent-seeking. It also has the capacity to constitute ‘Big Society’ style ideological cover for market failure and cuts to welfare provision. With this in mind, the sharing economy must develop in coordination with an ‘entrepreneurial state’, of the sort envisioned by Mariana Mazzucato and championed by Labour’s John McDonnell.

One of the most exciting, progressive examples of the sharing economy has been the rise of time banks, through which members offer knowledge, skills or services to one another. The shared currency is time and crucially, each hour of a person’s time is worth the same whatever they are offering. All races, professions and ages are welcome and considered equal.

Each time bank, and the services it offers, is an expression of its members, so it ends up reflecting the particular interests of the neighbourhood in which it is based. This, of course, is something in constant motion; time banks are flexible, ever changing, a work in progress and very much alive.

Time banks are not limited to groups of friends and neighbours, but also exist in association with larger institutions, including state services such as the NHS. Paxton Green time bank in London was created by the local GP surgery as a means of assisting people with mental health issues, in preference to an over-reliance on anti-depressant medication. 

Time banks offer not only practical, material help to those unable to afford goods and services via the capitalist market, but also reduce feelings of alienation and isolation. Studies have found that time banks are successful at engaging socially excluded and vulnerable groups of people, involving them in community activities, often for the first time. The schemes help boost confidence, social networks, skills and well being, creating spaces where values not recognised by the market, such as equality, prevail.  

As Paul Mason argues in his book ‘Post Capitalism’, the left needs to relearn to do positive things. This means building alternatives within the system and using governmental power in a radical and disruptive way to secure a transition path, rather than offering fragmentary defence of random elements of the old system. Time banks, cooperatives, credit unions, peer-networks, subcultural economies, unmanaged enterprises all signpost the way toward a potential post-capitalist future. Rather than regarding these examples as quaint experiments, they should be promoted with regulation as vigorous as that which capitalism transformed eighteenth century England.  

In our haste to challenge the market’s debasement of daily life, we must avoid reifying the state as the sole route through which to deliver positive socio-economic change. The state should be interventionist and ‘entrepreneurial’, but it can also empower by providing spaces for genuine human flourishing. A national investment bank network as envisaged by John Marlow would allow the state to fund and regulate exciting new projects across the country, whilst leaving the bulk of decision making to ordinary people. These projects would reflect the particularities of each community and empower individuals hitherto caught between the vagaries of the market and a too often one size fits all state. The potential of the sharing economy needs to be recognised and nurtured by Britain’s progressive social forces. If not, it risks becoming merely the latest avenue for corporate exploitation and handy ideological cover for those intent on rolling back hard-won welfare state provisions.

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We live in a world in which it is increasingly possible to use online labour markets to outsource work directly to any corner of the planet. Millions of new jobs are thus available for workers in some of the poorest parts of the planet. But the fact that we now have millions of people around the world all competing for the same jobs threatens to undermine a range of working standards.

Some workers are willing to accept extremely low paying jobs and sometimes undertake speculative and free labour for the promise of securing future work. Furthermore, online work platforms – by design – treat labour as a commodity to be bought and sold. Digital labour is often packaged up into bite-sized tasks; virtual assistance, translations, transcriptions, computer programming, graphic design, writing, and other such intellectual and digital forms of work. When tasks can be packaged up and outsourced, employers are less accountable to any particular workforce who might be able to demand concession like a minimum or living wage. The very existence of a broad base of people working for subsistence-level wages can exert a gravitational downwards pull on any work towards them in a supply chain. Workers are treated as replaceable, and the system is often organised as a cut-throat bidding process: clients lists jobs on online marketplaces, and workers then try to outbid each other for contacts by offering a lower price or better service. 

Some workers are willing to accept extremely low paying jobs and sometimes undertake speculative and free labour for the promise of securing future work. Furthermore, online work platforms – by design – treat labour as a commodity to be bought and sold. As millions more potential digital workers join the global network every year, how can we avoid a situation in which an oversupply of labour can result in an unfairly low market price for work?

We’ll probably need to begin by reframing the very work that goes on in these platforms. If workers are all individual entrepreneurs, it is rational to use these platforms to try to out-compete and exploit their co-workers. Many workers have internalised these sorts of internalised visions of individuality, competition and predatory behaviour. But if people see themselves as workers rather than entrepreneurs, then we have more possibilities for workers to collaborative attempt to help each other through cooperative horizontal relations. 

There is a range of ways in which this could be done. One place we could learn from is agricultural production networks. For instance, as the poverty of workers began to impact yields and the supply and availability of coffee, the creation of cooperatives and other benevolent intermediaries was actually encouraged by multinational buyers.

We could therefore envision more digital platform cooperatives that would ensure that workers all have a stake in the platforms that mediate their work, and that they receive fair compensation for their time. Trebor Scholz and others have been working tirelessly to bring this vision into being for platform workers. The idea has even been adopted by Jeremy Corbyn as part of his ‘Digital Democracy Manifesto.’

However, while platform cooperatives will undoubtedly be beneficial for the workers who are enrolled into them, they do not inherently solve the problems introduced by a low market price for work. It would be hard to police employers preventing a cooperative worker being paid a fair wage by re-outsourcing that gig to other workers for much lower wages.

Others might look to digital unions or looser forms of networks as ways to build a sense of solidarity between digital workers. One explicit role for a digital workers’ union could be building a class consciousness amongst workers. This would highlight the precariousness of much of the digital work that is out there, ensuring that what Gina Neff terms ‘venture labour’ (the “explicit expression of entrepreneurial values by non-entrepreneurs”) does not become the norm. In other words, these networks would encourage worker to recognise that they are receiving all of the risks of entrepreneurship, but few of the rewards.

Some of these strategies for cooperative forms of organising present an alternative vision. As thousands of people join the internet every day, many of whom are hungrily looking for work, we need to creatively think about how best to use digital tools for collaboration amongst workers instead of competition between them. Our digital tools are new, the forms of work that they mediate are new, and many of the challenges they raise are new. But, in a world where the atomisation of work continues to be used against digital workers, let’s not forget an old rallying cry that has served us well: workers of the world, unite!

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Work dominates pretty much everything. Whether or not you have it, it’s probably taking up most of your time. Employment is the most-common indicator of economic health and nearly all of the public debate about economics has to do with creating jobs. If you don’t work, it can have a detrimental impact on your health and your cognitive capacities. And with the automation of cognitive as well as physical labour many people think their jobs are useless, and it looks likely that many kinds of jobs are going to be become increasingly scarce. So maybe we need to rethink what it means to work and the role of work in our society.   

Having a job either plays an outsize role in framing our identity or not having one is a major source of anxiety and insecurity as well as a cognitive drag on our capacities. Poverty, which usually results from none, not enough, or poorly paid work, places a cognitive strain on the brain that saps concentration and processing power. If you are poor or precarious, finite cognitive energy is being devoted to making micro-financial calculations and the anxiety coming from constant worry about housing, feeding, clothing oneself and one’s family. The supposed poor macro-financial decision making often attributed to those in poverty doesn’t come from thinking too little, but rather from thinking too much about every transaction.

Moreover, the work that fills our lives with meaning is not always work in the sense of wage-labour. That’s probably a very good thing considering that, according to the anthropologist David Graeber, a great many people think that their jobs are “bullshit”. 

Modern capitalism seems to rely on the moralisation of work and the de-moralisation of debt. Work, regardless of what it is, is often understood to have a moral value. Our culture idolises the ‘grafter’, even while our governments often undermine the possibilities for ‘hard graft’ to lead to a decent life. Hard work is its own moral reward, you should not expect that it will guarantee enough income to live a good life, at least not in this life. The legendary protestant work-ethic, which, according to the famous sociologist Max Weber, spurred Capitalism’s development in Northern Europe has today been shorn from the social-democratic guarantee of good wages and some equality of opportunity for social mobility, to which it was attached for much of the latter part of the twentieth-century. At the same time the de- moralisation of debt still holds, at least on an official level. Apple’s newfound thirteen billion Euro debt to the Irish government is not the personal moral failing of Apple’s shareholders and they won’t be held personally responsible either morally or financially – and that’s a good thing.

Not to worry, it looks like this phenomenon won’t be around much longer. As I’ve written previously, the large scale-automation of many cognitive as well as manual jobs threatens to shake up all of this conventional thinking about work. If robotics and AI driven automation leads to a significant rise in long-term structural unemployment, where there are simply not jobs in the economy that people can do, as many are predicting it will (see my previous piece for more on that), we’ll have to dramatically rethink the role of work as valuable in and of itself. Just as importantly we’ll have to dramatically rethink how to re-establish or rebuild the identity and meaning endowing social infrastructures that jobs, work, vocations, once provided in industrial economies. A good place to start is probably an important distinction between work and labour made by the German philosopher Hannah Arendt. Very coarsely, labour is what we do to fill our bellies, work is what we do to gives our lives a meaning beyond filling our bellies. In modern capitalism, these two have usually, at least to a large extent been coupled; in the next phase of automated capitalism that coupling will become much more difficult. As such, it seems like ‘employment’ is an anachronistic means by which to measure the health of an economy. It measures neither the technological development of the country, nor the wellbeing of its citizens.

In a world with much less work, new institutions will be needed to provide the identity and meaning that work, however arduous, once provided for many. We will have to think work in a much broader context than wage-labour. This entails nothing less than a full scale revitalisation of civil-society. How exactly we can do this is the task for the coming years. Whether or not the predictions about automation and employment are wholly correct, we need to look beyond employment to provide meaning in our lives and measurement in our economy.

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The Brexit campaign saw much pontificating about the need to free UK businesses from the yoke of workplace regulations and union protections, in order to ‘make Britain competitive’. This reliably translates to ‘allow business to suppress wages’; making Britain’s workforce low paid and malleable enough to attract transnationals to set up shop here. This is supposed to create investment, which creates jobs, which creates demand, which stimulates investment, and so on. The logic goes that wages are a cost to businesses, so an upwards pressure upon them begins to look a lot like a threat to those tantalising profit margins intended to attract investment. This enlightened progress towards poverty salaries can be thoroughly derailed by union action. Unions are after all one of the – if not the singular – most important forces in gaining and defending wage rises. Workforces and industries with greater union density have consistently higher wages; like herd immunity, it’s a benefit reaped even by those individuals who don’t happen to be unionised themselves.

If unions are a threat to the economy, then gutting their legal protections amounts to a defence of the public interest. In this respect, public interest has been very thoroughly and rigorously defended over the past few decades. The impact of collective bargaining has been weakened by a steady rollback on legal protections surrounding, making it more and risky to organise – combined with heavy police crackdowns on union action. Union density has halved in the last thirty years. If this was meant to allow wages to fall, it has worked like a charm. As a percentage of national income, wages have fallen by 8.9% compared with their peak in 1975. Since the start of the most recent financial crisis in 2007, the UK has enjoyed a real-terms fall in wages of over 10% – second only to Greece. In fact, wages have been so successfully shrunk that it’s a little mystifying why the economy, according to this rationale, is far from flourishing, and worker productivity is actually falling.

We must re-evaluate how we think about wages. They aren’t just a burdensome cost to businesses, to be avoided as much as possible. They are also the basis of demand. They largely provide the money people use to pay rent, buy food, heat their houses. They provide money we use to buy mini-scooters and electric toothbrushes and magazine subscriptions and all the other products whose manufacture, distribution and sale forms a fundamental part of the economy. If wages are squeezed, then people have less cash to spend on consumer goods and services. Whilst squeezing wages might be a good idea for any one business, for businesses in general it’s a recipe for disaster: they are essentially competing to gut their demand base. Indeed, this pattern obtains across Europe. With a common currency and tight controls on fiscal policy, wage suppression is one of the most readily available ways in which countries can pursue a competitive advantage over their neighbours, trying to make workers more productive per euro spent on their wage packet. It’s rapidly becoming a race to the bottom; with countries competing to pay people less, for harder and longer work days. Countries with a trade surplus, exporting more than they import, are less dependent on the wage packets of domestic workers to secure a basic level of demand. But if these countries trigger a race to the bottom – well, it means that foreign wage packets are diminishing too. There are few winners. 

If we strengthen collective bargaining, we bolster the power of trade unions to act as a bulwark against this mutually assured stagnation. If we roll out strong legal protections around union action, we can increase the power of unions to effectively demand wage rises. Moreover, by rebalancing the amount recouped in wages by low-income workers, we can ensure that wages do the most work in stimulating demand. If you give someone on minimum wage fifty quid, they are almost guaranteed to spend it – not through some inherent profligacy, but simply because they need that cash. If that same fifty quid is paid as a dividend to a CEO – someone who most directly benefits from rising profits – it’s much more likely either to be saved, or to be driven into unproductive investments (like, say, inflating the cost of houses). 

It also acts as a check on the enormous amount that the government shells out to plug the gap between inadequate wages and the rising cost of living. When people depend on welfare to scrape by, make it to work the next day, and keep the company running, welfare payouts amount to a massive public subsidy to businesses and landlords. This isn’t a magic bullet – the point of trade union action is not to save capitalism from its own caprices. But it’s a step towards rebalancing the distribution of economic power in our country, and stemming the collapse in living standards that threatens the real ‘wealth-creators’ with precarity and penury.

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