The word ‘tome’ gets bandied about all-too often. But in this case, despite claims on the cover to constitute a “brief guide to global inequality and its solutions”, tome really is apt. Jason Hickel’s The Divide is as weighty physically as it is intellectually.

And yet, fortunately, it is highly readable. I say ‘fortunately’ because this is a book that if our world is to have any chance of meeting the challenges of the 21st century, people need to read. It challenges so much received wisdom via a well-argued, flowing prose that guides you through economic history, international trade, colonialism, politics and power, and the limits to growth debate. In setting out the reality of global inequality and its tangled roots, Hickel, matador-like, destroys the statistical pivots used by official agencies and unpicks their portrayal of an optimistic account of the state of global poverty and inequality.

But The Divide is not just about statistics – it is about the political economy of today’s entrenched inequalities and why the economic model currently doing so much harm to people and planet exists.

Early pages share the story of how a writer for President Truman concocted the notion of ‘development’, almost as a space filler for a Presidential speech. This anecdote shows how much of the development agenda began in what almost amounts to a spin exercise. This is a brilliantly brutal call-out that somewhat undermines the original intentions of one of the most popular and ostensibly most virtuous causes of the 20^th century, a cause that has galvanised political agreements, huge rallies, not to mention songs from well-known rock-stars.

From here Hickel challenges the implicit – arguably deliberately concocted – belief so many hold: that inequalities and the circumstances endured by the poorest are just a ‘technical’ challenge, solvable by governments in the global ‘South’ simply setting up the right institutions, picking the right suite of policies, eliminating corruption, and so on. An early knockout punch in the bastions of mainstream policy-making comes as early as page 3, where Hickel reminds us that:

“…in the year 1500, there was no appreciable difference in incomes and living standards between Europe and the rest of the world….yet their fortunes changed dramatically over the intervening centuries – not in spite of one another but because of one another.”

The chart on page 30 then summaries the crux of Hickel’s argument, showing the ‘annual gains from aid vs. selected outflows & structural costs/losses’. Spoiler alert: aid pales when compared to the multiple (and massive) flows in the opposite direction. This is one of those “if you only look at one chart this year, look at this one” charts. So much said in one diagram.

And from here the book takes the reader on a journey of the relationship between rich and poor countries. And one is left feeling it is one of the most toxic, abusive, manipulative relationships possible to imagine. Hickel forensically sets out the contours – the cuts and the bruises and the hectoring – of that relationship. And, crucially, the imbalance of power and profit inherent in it. On page 29 he writes:

“…the World Bank, for example…profits from global South debt; the Gates Foundation, which profits from an intellectual-property regime that locks life-saving medicines and essential technologies behind outlandish patent paywalls; and Bono, who profits from the tax haven system that siphons revenues out of global South countries.”

As is probably the way with any book anyone reads, there were some points where I wasn’t entirely nodding along. As someone who has spent a good chunk of my working life working for a large international NGO, I found the sweeping discussion of international NGOs and their work to be problematic. In pointing out (admittedly not unreasonably in some instances) how the communications of many NGOs entrench the ‘aid narrative’, the discussion skims over that so many of them campaign hard – and often effectively – against many dimensions of the system Hickel calls out as so insidious. Hickel does acknowledge this in an endnote, but I worry a reader who doesn’t diligently check every endnote would walk away with the impression NGOs are all working from the same mantra, one of heroic donor and grateful recipient.

This is far from the case and Hickel himself draws on evidence Oxfam collated about the extent of inequality and wealth hoarded by billionaires, something that would have been impossible if NGOs like Oxfam weren’t proactively identifying that the economic configuration is a root cause of poverty and suffering. Moreover, many solutions Hickel offers are bolstered by the work of NGOs. Jubilee 2000, for example, had huge NGO backing, as do the efforts to end tax dodging, mobilisation against inequality, and of course the fair-trade movement. Many of these feature in Hickel’s five key areas for change, areas more likely to see success with continued, and perhaps bolstered, NGO involvement.

As always, it is a matter of balance: help people survive the current system or change the system? I think there’s an urgent need for both. Helping people cope with the current challenges is vital, lifesaving work. Humanising the system is still worth it, anything else is cruel. But clearly, what is needed is also capacity and preparedness to look beyond supporting people’s immediate survival – and to call out the systemic reasons why so many people’s survival is in peril. These dual tasks may not necessarily be undertaken by the same people or even by the same organisation (and need not be covered simultaneously in the same book), but one without the other is not enough. Without the former people will die, and without the latter dying will carry on in the face of policies that should and can be changed.

So I am left hoping that Hickel’s next project might be helping craft a new lexicon, one to replace the increasingly redundant notion of development. For example, his penultimate chapter is called ‘from charity to justice’ – a nice contrast between the two fundamentally different concepts. One system preservation. One that requires system transformation.

The transformations Hickel identifies as most important in making that shift are debt resistance; global democracy; fair trade; just wages; and reclaiming the commons. These are as good a place as any to start (and others will of course have their own top five).

What’s needed to get there is mobilisation and political action, together with connecting and amplifying the work already underway (read here about the Wellbeing Economy Alliance, a new effort to do just that). This is a task that will be aided by the questions Hickel poses and the assumptions and orthodoxy he slays.

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For a sector that rarely gets mentioned unless dead or diseased animals are piling up, food has had a lively political year. New Bills have been passed, and chlorine-washed chicken has been discussed at a Party Conference. The appointment of Michael Gove to the head of DEFRA put fire into the belly of the conservation lobby. We all got a little bit excited.

But the excitement remains tinged with frustration at the lack of a coherent joined-up plan, and so much confusion about just how the government intends to resolve its differences on standards in trade deals. Do we get chlorine-washed chicken or not? US Commerce Secretary Wilbur Ross thinks we must, but Gove says no. It’s almost as if the Doris Day song playing in our ears: “Perhaps, perhaps, perhaps…”

With a transition deal with the EU now likely, it seems possible that we will stay in the Common Agricultural Policy (CAP) and Common Fisheries Policy (CFP) for that period. So the promised new Agriculture and Fisheries Bills, and Gove’s vision of ecological farming and new marine policies are possibly four years away. Or maybe not?

However, we can make use of the opportunities that do arise. The big animal sentience bunfight has already delivered rewards – a new Bill – and indicated both a shift in Conservative strategy and the impact of people power. But the solutions don’t yet get at the heart of the problem. This, as ever, means following the money and power.

Four food Brexit issues will hit the stands in 2018. They illustrate why politics, finance and food are being increasingly entangled, and why a new vision, policies and partnerships are needed.

What’s going to happen to food prices?

Top of the confusion pile is the impact of Brexit on food prices and availability. The number of food banks is growing and there have been warnings of potential food price increases from industry such as the chairman of Sainsbury’s and, the British Retail Consortium and KPMG. While we still await government impact assessments, one scenario from the farming industry estimates that these additional costs could add 8% to food costs from the EU.

Politicians use this as an excuse to say we need free trade deals with the rest of the world where food (labour) and production is cheaper so we can import what we need. But let’s not spread the misery of cheap food – poor animal welfare, food hygiene, working conditions and environmental degradation – elsewhere. Pro free-traders such as Jacob Rees-Mogg MP also argue that we’ll get cheaper food through low or no tariffs on global produce after Brexit. But it’s a flawed idea. Any potential savings would be cancelled out by a weak pound, currency fluctuations and increased food costs from European countries where we get 30% of our food from. Longer term, our resilience will be poorly served by drawing more land, water and resources from across the globe in the form of cheap raw materials for the food industry.

And it is fair to say food that banks are generally not a function of food prices. They were around and swelling well before Brexit and reflect a problem of low incomes, in-work poverty, precarity and inadequate linking of welfare support to the cost of living. It’s likely that after March 2019, Brexit will be blamed for any food price rises and we need income safeguards for those affected. But any reaction that looks like a ‘cheap food’ policy could cost all of us dear in terms of job losses, food standards, NHS spending, and competitiveness in high calibre international food markets.

Will robots take over or will crops be rotting in the fields?

A fully mechanised food system is some years off, but the government made it clear they want a tech revolution in their new Industrial Strategy. This may help solve the worker ‘issue’; tech and robots will do the hard work us lazy British won’t, and cheap migrant labour may no longer be available. Under the Rees-Mogg model we’ll just import what we need, so no new workers will be needed. Simples.  

How much better would it be to make UK farming attractive for workers and entrepreneurs? It may seem like a pipe dream, but I meet such dreamers often and all they lack is land and support to deliver highly productive farming. From the rise of food pop-ups, new food growing initiatives and the keen interest of the younger generation in food provenance and sustainability, it is clear there is an opportunity here.

But again we need to follow the money. Making the supply chain pay its way (for a start extending and increasing the role of the Groceries Code Adjudicator) is vital, so that producers get a fair share of the pie. So too is stopping tax dodging which sucjs money out of the food system, and ending the massive executive pay gap. These are political decisions without which we can’t make the food system work fairly or sustainably.

What will happen to farm subsidies?

The long-anticipated Food and Farming 25 Year Plan bit the dust in 2017, and the promise of a 25-Year Environment Plan limps on. We are told we will get a new Agriculture Act in late 2018, but that may now be on hold. A new UK Agriculture Bill may have limited power outside of transition EU rules to govern public money or environmental standards for some years to come.

We are drowning in evidence that we could do farm and rural policy better (not just via payments for public goods but capital grants, training, advice, and even new private partnerships for environmental services) which would be better for farmers, their workers, their animals, the environment and for our health. Gove says he gets it, and DEFRA is full of bright new staff getting out and about on farms, listening to us and our members’ ideas. That’s all good and could mean something significant. It must stem the loss of farm businesses. But will it link up with Gove’s announcement of a possible new environmental body and hints of a new Environment Act?  Given that 70% of our land is farmed and farming contributes to air and water pollution, climate change and so on, we really need to see coherence between these two legislative outcomes.

A final word on farming in 2018: we need an extended groceries code adjudicator. The broad network of organisations calling for this could not be more diverse, yet they have worked together to make a clear case that such an extension is vital to end unfair trading practices and help support a wide range of farming businesses in the uncertain years ahead. Give this to Mr Gove.

Food standards: More than just chlorine-washed chicken

Trade deals that sacrifice food safety, animal welfare, reduction of farm antibiotic use, provenance and environmental standards (such as pesticides or nitrates) for the sake of a trade deal on finance or car parts will be toxic. Such messages helped to stop the much loathed Transatlantic Trade and Investment Partnership (TTIP) in its tracks; and never doubt the strength of the big food lobby. Liam Fox MP has flip-flopped on this, showing what a charged debate it is already, and we’ve not even started negotiating any trade deals even if Wilbur Ross thinks we have. MPs need to have oversight of any trade deals and we should look to strengthen food safety machinery, not weaken it. As Sustain said in its evidence to the MPs Environment, Food and Rural Affairs committee Inquiry which showed the difference in salmonella between UK and US eggs; we’ve been losing capacity to check what’s in our food packets for years. We must do better, not simply import tonnes of new unknown junk and contaminated food. In the long term, it will just cost us all far more.

A coherent vision on food could ensure trade policies, farm support and wider measures deliver an affordable food supply that is fair to people, food providers, animals and the environment. And it needs to be well policed.

Do tell your MP what you think on these four hot potatoes, and sign up to Sustain monthly updates here.

The post The politics of food: What to look out for in 2018 appeared first on New thinking for the British economy.

We caught up with economist and former MP George Kerevan at the Festival for New Economic Thinking to discuss the state of economics and the media in 2017.

Watch the full video:

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openDemocracy economics editor Laurie Macfarlane spoke at this year’s Disruptive Innovation Festival about learning from the financial crisis, and building an economy that is fit for purpose for the 21st century.

Watch the full video:

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We spoke with journalist and author George Monbiot about the task of replacing neoliberalism, reinvigorating democracy and averting climate breakdown. Watch the full video:

George’s new book, ‘Out of the Wreckage: A New Politics for an Age of Crisis’ is out now.

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openDemocracy partnered with the first ever Festival for New Economic Thinking which took place in Edinburgh on 19-20 Oct 2017. The Festival brought together organisations and individuals from around the world to discuss how to advance economic thought and inspire change.

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 for building a just, sustainable, and resilient economy are being developed.

At the Festival, we spoke to people about the ideas they have for building a new economy. Check out the highlights:

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It wasn’t long after he joined Uber in 2013 that it became clear to Yaseen Aslam – a ten-year veteran in the minicab trade – just how vulnerable he was if he didn’t team up with other drivers.

“For me it was about how Uber could turn me off at the touch of a button and just fuck my life up” he says.

Back then there were no unions with a strategy to help workers such as Aslam, so without any resources, except for his own time and knowledge of the trade, he launched his own driver association, The London Private Hire App Driver Based Association.

Move the clock forward to last month, and Aslam was marching side by side with hundreds of other workers that like him face low pay and poor conditions. Deliveroo riders, cinema workers, cleaners and others accompanied Aslam and fellow claimant James Farrar, as they went to face Uber at an employment tribunal for a second time. In the space of a few years, the debate around precarious work is increasingly taking centre stage, however, the trade union movement, with a few exceptions, is lagging behind.

Both Aslam and Farrar are members of the small, but rapidly growing, Independent Workers’ Union of Great Britain (IWGB), whose members are largely  precarious workers, from cleaners to couriers.

Different reports put the total number of the UK’s precarious workers – those who are easily replaceable and thus highly vulnerable to exploitation by their employers – at somewhere between 3.2m and 10m. What all these reports agree on, is that this number has been growing.

Besides the IWGB, only a tiny handful of unions are putting any resources in organising precarious workers. These include the equally small United Voices of the World (UVW), which focuses on low-paid migrant workers, the Bakers, Food and Allied Workers Union (BFAWU), whose members recently led the UK’s first McDonalds strike, and a few branches at Unite, the UK’s largest union.

Yaseen Aslam speaking at the IWGB’s Precarious Labour Strikes Back Protest. Image: Guy Benton

It’s clear when looking at membership numbers the extent to which the trade union movement has abandoned these workers. You are less likely to be in a trade union if you are a migrant, if you are low paid, if you don’t have a degree and if you aren’t in a professional occupation.

They’ve been left behind because the majority of unions in the UK, while they might not say it publicly, don’t believe precarious workers can organise and win, says Dr Jamie Woodcock, a research fellow at the London School of Economics, who has researched work and resistance at call centres and more recently Deliveroo.

“They feel they would invest more than what they would get out of them… instead they are stuck managing their decline,” he says. This decline is characterised by a focus on their existing membership and in their core sectors, many of which, notably the public sector, are facing a dramatic reduction in the total workforce.

Consequently, parallel to the massive rise in precarious workers, we are seeing a shrinking and increasingly older union membership, as around 39.1% of trade union members are 50 or older, while fewer than 5% are 24 or younger.

But while many in traditional unions might feel organising precarious workers is a waste of time, recent experience is proving the opposite.

There is the case of bicycle couriers organised by the IWGB, who against all odds won an average 25% pay rise in five workplaces through a campaign that lasted just over a year. Or the cleaners at the London School of Economics (LSE), who earlier this year became the first in the UK to force an institution to end outsourcing and hire all its cleaners directly, just to name two.

These victories aren’t significant just because they were unprecedented, but also because the unions that led them were dramatically under-resourced. The strength of these campaigns didn’t come from having a multi-million pound budget, political connections in the Labour front-bench and a well-staffed PR department, but from the commitment of the workers and their unions to fight and take radical action.

“It came down to the sheer determination and level of organisation of the cleaners, backed up by a union that was willing to support them as long as they wanted to take action,” says Petros Elia, General Secretary of UVW, the union that organised the LSE cleaners.

While train drivers can strike and significantly impact the running of the service and the business behind it, most precarious workers don’t have the same leverage. Cycle couriers, while they are currently gaining  rights through a number of legal challenges, at the time were being employed as independent contractors and had no formal employment rights. Striking cleaners, on the other hand, can easily be replaced by zero-hours workers that are on their employer’s books or by an agency worker.

This is what happened at the LSE, so in order to win the cleaners needed to amass significant support from other workers and the wider community

“If you don’t have a good network of motivated workers or supporters ready to take direct action then you won’t defend striking workers,” Elia says. “One of the things UVW and IWGB offer workers besides prospects of winning real gains, is a sense of community and space, and that is large part of the reason why workers join and stay.”

Anyone who went to one of UVW’s pickets outside the LSE could attest to the carnivalesque atmosphere, where on any given day you could stumble across a zumba class or a lecture on how pirates got sick pay. The protests were loud, noticeable and most importantly fun for those that wanted to get involved.

In the case of the bicycle couriers campaigning in 2015, despite working for many different companies, up to a hundred got together to target a single employer. It was an unprecedented level of unity – imagine workers from Tesco’s, Sainsbury’s and Morrisons all teaming up to jointly campaign against one supermarket.

One company in particular, CitySprint, dominated the market and was imitated by all of its competitors. If the couriers were able to bring it to heel, then it would be much easier to pressure the others, says Maggie Dewhurst, one of the couriers that led the campaign and who is now Vice-President of the IWGB.

“The protests were loud, noticeable and most importantly fun for those that wanted to get involved.”

And the strategy worked. After campaigning for nine months against CitySprint, they won a rate rise. This was followed by campaigns against eCourier and Mach 1, which lasted four and three months, respectively. In the interim, two other companies that were on the couriers’ radar, Addison Lee and Excel, raised their rates after seeing what was happening to their competitors.

“Because it [the campaign] was so successful, we could use it as a threat to the other companies to force them to put their rates up as well,” Dewhurst said.

What also set this campaign apart, was that besides targetting the companies themselves, much of the focus was on the company’s clients.

“It’s very important for them to maintain contracts with big corporate clients… so they are very susceptible to disruption by attacking their clients,” Dewhurst said.

The couriers protested and occupied the lobbies of Citysprint clients, such as Google and corporate law firm Linklaters, early in the morning, when people were coming into work. This was the time when a protest of that kind would be most visible and cause the most disruption.

IWGB couriers protest at Google offices as part of CitySprint campaign. Image: IWGB

Dewhurst suspects that Linklaters, a partner of the living wage foundation, ended up pressuring CitySprint to enter into negotiations with the union.

These victories could seem relatively small, with little potential to have a wider impact. However, it was precisely a strategy of combining worker and community solidarity with direct action that not only won a pay rise for McDonald’s workers in New Zealand, but managed to turn the dial on the debate around zero-hours contracts to the extent that they were banned by law.

“You talk to their organisers and they talk about creating chaos,” said Gareth Lane from BAWFU who helped organise the UK’s first strike of McDonald’s workers last month. He says that in New Zealand, besides having worker strikes, students went on strike and occupied McDonald’s stores, shutting them down.

The challenge that remains in the UK is to get larger unions to start organising precarious workers, while also allowing these workers to have ownership over their campaigns. Unite, which has the largest organising department in the UK, with approximately 120 organisers, doesn’t organise outside its core sectors, but there are glimmers of hope.

Earlier this year around 700 outsourced workers organised by Unite at Barts Health NHS Trust in London led the largest cleaners’ strike in UK history. After 24 days of industrial action, the workers were able to secure pay rises, concessions on workloads and job cuts, and a commitment by the employer, Serco, to stop hiring people at the trust through zero-hours contracts.

“The challenge that remains in the UK is to get larger unions to start organising precarious workers, while also allowing these workers to have ownership over their campaigns.”

And while many within the larger unions still push for what is called a service model – a union that provides legal service, health insurance and other services – others understand that the only way that the trade union movement will survive is through organising workers, particularly precarious workers.

“This isn’t just a flash in the pan,” says a Unite insider, “There is a realisation in Unite that we are going to die if we don’t reverse the decline in our membership and the lack of power in the movement.”

Even if these unions aren’t willing to look outside of their traditional sectors, years of austerity and deregulation mean that a growing number of precarious workers fall inside the remit of the larger unions such as Unite and Unison.

In fact, within many of these more established unions there are a small but growing number of campaigns that are being pushed from the ground-up, by the workers themselves. From striking British Airways Mixed Fleet, to the Picturehouse cinema workers and teaching assistants in Durham, the most high profile battles taking place at the moment involve precarious workers that previously had little or no involvement in trade-unions, but have become radicalised after months of struggle.

If there is some hope for the union movement to put precarious workers at the centre stage, it could come from a shift in culture brought about by these fights.

“The ground is so fertile for organising at the moment,” says Lane from BFAWU. “Workers wherever we go are ready to organise. If big unions put resources into it, it would explode.”

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Ten years ago the French bank BNP Paribas ceased activity in three hedge funds, announcing that it could no longer measure the value of instruments based on US subprime mortgages.

The event is widely regarded as representing the beginning of the global financial crisis, as what had previously been regarded as minor turbulence in the US housing market became something far more serious. Banks stopped lending to each other and the financial system froze, sending shockwaves around the global financial system. The UK, with one of the biggest, most complex, and most interconnected banking systems in the developed world, was uniquely exposed.

A decade on, and the cost of the crisis – both human and financial – cannot be understated. The cost of bailing out the banks peaked at over £1 trillion, while the cost to the economy in terms of loss of income and output has been much greater. According to Andrew Haldane, the Bank of England’s Chief Economist, the cost may be as high as £7.4 trillion – similar in scale to a World War. Since the crisis real wages in Britain have suffered a larger decline than in any other advanced country apart from Greece. Years of austerity has pushed public services towards breaking point, and falling living standards has seen families resort to desperate measures like using food banks. Mark Carney, governor of the Bank of England, recently described the past ten years as the “first lost decade since the 1860s”.

As each ten-year milestone approaches – from the collapse of Lehman Brothers on September 2008 to the G20 London Summit held on 2 April 2009 – much will be written about the role of each of the major culprits: the reckless bankers, the weak regulators, the captured credit rating agencies and the blind economists. But what about civil society? What is there to learn from the experience of the financial crisis, and what does this mean for the future of civil society?

Civil society’s blind spot?

In 1960 UK banking sector assets totalled £8 billion, or 32% of the country’s annual economic output. By 2010 this had increased to £6,240 billion, or 450% of annual economic output. Relative to the size of the national economy, the UK banking system grew to be the largest among advanced economies, with most of the growth coming in the two decades prior to the crisis.

Despite this rapid increase in the size and influence of the banks and other financial institutions, civil society did not pay much attention to their activities. Of course, organisations such as credit unions have played a key role in local communities for many years. But in the run up to the crisis few organisations asked difficult questions about the financial sector as a whole, or asked whether it was serving the long-term interests of society.

Of course, civil society was not alone in failing to see the crisis coming. The vast majority of macroeconomists were caught entirely off guard, as were the regulators whose job it was to prevent such crises from happening. While the economy was hurtling towards catastrophe, central bankers were hailing the arrival of the ‘Great Moderation’ and Gordon Brown had declared the end of ‘boom and bust’.

Nonetheless, one of the roles of civil society is to ask difficult questions and to challenge power. While it would be unfair to pass blame for failing to foresee the crisis, elements within civil society could and should have acted more courageously to challenge the power of the City of London. But too often they found it easier to look the other way.

Too little, too late

Once the crisis hit, civil society organisations scrambled to come to terms with what happened, and what it meant for them. Few organisations were well placed to respond quickly. A longstanding perception that finance was a technocratic field best left to experts had left civil society woefully underequipped to intervene, despite the fact that civil society organisations are perfectly capable of getting their heads round other complex issues. Moreover, civil society’s capacity was reduced just as it was needed most, as funding sources started to dry up amid the economic fallout. Without a coherent analysis of what went wrong and what needed to happen, civil society struggled to make its voice heard in the process of reform that followed.

Despite this, there were a number of positive developments. The crisis triggered an awakening on issues of banking and finance, and gave birth to a dynamic new movement dedicated to the cause of financial reform. New organisations such as Positive Money, the Finance Innovation Lab and Move Your Money were established, and alongside older organisations like the New Economics Foundation set out explain the workings of the financial system and repurpose it for the common good. But despite some heroic efforts, these organisations inevitably faced an uphill struggle against the lobbying might of the sector and the ‘insider’ culture of the regulators.

It is difficult to know exactly how much the sector spends on lobbying, but an investigation by the Independent Bureau of Investigative Journalism revealed that City of London firms provided more than 50% of the Conservative party’s funding in 2010, the year of David Cameron’s general election victory. In 2012, a similar investigation revealed that the British financial services industry spent £92 million in one year lobbying politicians and regulators. Combined with the serial ‘revolving door’ culture between the industry and the regulators, it’s easy to see how civil society’s voice was drowned out.

While the limited reforms did rein in some of the worst excesses, it wasn’t long before intense lobbying from the sector led to them being watered down or rolled back. By 2015 this had paid off, as George Osborne announced a ‘new settlement’ between policymakers and the City and quietly passed a string of concessions to big banks in areas of tax and regulation. Then, in December 2015, 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. We could return to business as usual.

What next for the future?

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. Similar warnings have come from the Bank for International Settlements, which recently said that another global financial crisis could soon hit “with a vengeance”.

Now, with Brexit on the horizon, the risk is even greater. As more banks start to shift operations abroad, the government has indicated that it may respond by slashing regulation in a bid to stem the outflow of business. Media outlets have reported that bank executives and lobbyists are already working hard behind the scenes to turn Brexit to their advantage.

To avoid history repeating itself, there is an urgent need to strengthen civil society’s voice on finance, and develop a credible and effective counterweight to the lobbying power of the banks. We must also work to transform our broken financial system to ensure that finance serves society, not the other way around.

What does this mean in practice? Firstly, it means establishing a credible and well resourced civil society voice on banking and finance. This isn’t a new idea – in 2011 the European Parliament established a new independent NGO called Finance Watch. This organisation receives public funding from the EU, and is tasked with acting as a public interest counterweight to the powerful financial lobby. While Finance Watch’s expert staff are still vastly outnumbered by industry representatives in the corridors of Brussels, the organisation has played a vital role educating lawmakers and the public about the financial system. As Britain starts to plan a future outside of the EU, plugging this gap with a new UK-focused organisation will be vital.

Secondly, civil society must begin the long hard task of transforming our banking sector. The UK has among the most concentrated banking sector in the developed world, and is uniquely dependent on commercial, profit maximising banks. The banking sector channels billions into the economy each year, however most of this flows into property and financial markets, inflating asset prices and destabilising the economy. In other countries, the banking sector plays a more positive role by investing sustainably in local communities, and these banks are often characterised by ‘stakeholder’ ownership and governance. In other words, the mission of the bank is not to maximise profits but to optimise returns to a range of stakeholders, including customers and the broader local economy. Empirical evidence shows that these institutions, such as co-operatives, mutuals and public savings banks, perform much better than their large competitors on measures of financial stability, local economic development, business lending, and financial inclusion.

Learning from best practice around the world, steps should be taken to increase the diversity of the banking sector and create new institutions which serve the interests of businesses and local communities. Initiatives like the Community Savings Banking Association are already doing this from the bottom-up, but much remains to be done before these models can achieve the scale required to make an impact.

But reforming the banking sector is merely the tip of the iceberg. The financial sector’s grip over of our politics and economy did not happen in a vacuum – it is the result of a set of deliberate political choices to rewrite the rules of our economy. The UK’s sprawling financial sector was, and still is, the pinnacle of neoliberalism – the economic system which has allowed privatisation, deregulation, and market logic to penetrate every area of society.

The financial crisis was one product of this system. But challenges such as poverty, inequality, alienation, climate change and homelessness cannot be separated from the economic system which breeds them. To overcome these issues, civil society must go beyond simply ameliorating symptoms, and start tackling root causes. This means challenging the tenets of neoliberalism itself, and working together to build a fairer and more sustainable alternative.

The post Ten years after the crash, is civil society ready to take on big finance? appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

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.

The post It’s time for civil society to take over the economy appeared first on New thinking for the British economy.

In the late 19th century, as the industrial revolution came to maturity, an extraordinary system emerged to address the health needs of industrial workers. In Tredegar, south Wales, a hospital sick pay and insurance system was so effective that Nye Bevan took it as the model for the NHS.

This is far from unique. It is not just the NHS that has its origins in civil society. Our school system and many of the other institutions that create and sustain our society have their roots in our organisations of collective action, ranging from religious bodies to charities to trade unions. Throughout the 19th century and the first half of the 20th century the state looked to civil society to prototype the structures that would, eventually, comprise the most substantial parts of domestic policy.

Scotland became the first society in the world to have mass literacy as a result of the Church of Scotland’s universal parish school system, created by order of the Privy Council in 1616. The Carnegie Fund for the Universities of Scotland meant that this extended to higher education in the early 20th century. The slightly hyperbolic claim that Scots invented the modern world has its basis in a string of inventions, from the pneumatic tyre to television, that emerged organically from a society that was better educated than any other.

Just as the Tredegar medical model was the prototype for the NHS at its creation in the 1940s, the Scottish Parish schools were signed over wholesale to the state in the 1870s, forming the basis of the Scottish education system.

Civil society, the voluntary sector, and public institutions outside government have created the conditions within which we are born, educated and die. As the world changed, so government took on many of these functions. But it was not government that pioneered social change during the industrial revolution and the 20th century.

And on the cusp of a new industrial revolution, it is disappointing that it’s difficult to point to similar innovation from civil society. As we reach a digital frontier there are few examples of institutional civil society using the new tools to transform the world in the way universal education or free health did in previous eras. There are some examples, and Nesta has been bringing together some of the best through its Digital Social Innovation programme. Possibly most notable is Cancer Research UK’s crowdsourcing of cancer data analysis through its Citizen Science programme.

This matters because the ideological underpinning of much of digital innovation is totally at odds with the values of civil society. Richard Barbrook and Andy Cameron have usefully characterised this as the Californian Ideology – a mix of individualism, techno-utopianism, libertarianism and neoliberalism. In his film “All Watched Over by Machines of Loving Grace”, Adam Curtis points to the links between Silicon Valley capitalism and Ayn Rand’s ultra-libertarianism. So far, so far away from the communitarian and liberal aims of most civil society organisations. And that is reflected in the ‘real world’ manifestations of digital society – companies like Airbnb and Uber, who have business models that are a long way from those of civil society organisations and their attempts to build a fairer world.

There are a few examples of older not-for-profit organisations really reinventing how they do things in the context of modern tech: if we count Universities as Civil Society, then we we could look to how Massive Open Online Courses (MOOCs) may be the foundation of tertiary education in future. The Guardian, which is run by a not-for-profit trust, has also been at the forefront of digital development. The BBC iPlayer is also a leading innovation in the digital space.

And there are some significant not-for-profit digital organisations. Wikipedia has perhaps been the most successful, almost totally dominating the encyclopaedia business, and displacing a range of traditional, for-profit, organisations. Mozilla, which produces the Firefox web browser, is another digital leader. It is important to acknowledge that the open source software community operates very much within a civil society model, but while this is both important and has made huge impact, it is the creation of a new community. But these examples all stand out as exceptions. And what is most concerning is the gap created by civil society organisations not grasping the opportunities of the sharing economy.

But it is very difficult to identify any of the civil society actors that have historically used digital innovation, mobile apps and other opportunities to change the way we live our lives. Uber has changed how people travel, Airbnb how they holiday, and Facebook has profoundly reconstituted our social relationships. I would challenge readers to name a single civil society organisation which has made that sort of difference using technology.

This is important because technology offers massive opportunities that align perfectly with the values of civil society. Social networks used to be mediated through civil society. Now they are mediated by Silicon Valley corporations with a somewhat shaky understanding of privacy.

The core values of the internet are very close to the core values of civil society. Universal, free and open access to information, and the ability to connect to people around the world on the basis of shared values and interests are at the heart of the world civil society has always sought to bring into being.

To take a specific example, the voluntary sector came up with the idea for community transport. Using shared non-commercial buses, or private cars to help people get to the shops, hospital appointments or other services is a core activity for many voluntary organisations. It is a life-saver for many older people. But all too often it remains a person sitting at a phone coordinating lifts. Why wasn’t it a community transport provider that prototyped mobile-led lift sharing – rather than leaving it to Uber? Why didn’t the cooperative movement support taxi drivers to create their own app-led service, as the New Economic Foundation and Nesta are now doing in Bradford and Leeds?

I do not have the answers. But I do know that we need to start thinking about this – I suspect that digital ideas are all-too-often dismissed by civil society leaders as being peripheral to core business activities. There are access issues – not everyone has a smartphone – but these issues are receding rapidly as smart technology becomes cheaper. It needs to stop being a barrier to digital service delivery.

It’s interesting that those civil society institutions that have produced digital innovations are those that have financial security. The BBC has the license fee, paid by most viewers, which allowed time and resource to develop iPlayer. Universities have substantial reserves, and the capacity to produce MOOCs on their existing resources. The Guardian invested substantial amounts of its reserves in becoming a leader in online journalism. Voluntary organisations subsisting on donations and year-to-year grant funding from government will find it very much more difficult to be strategic.

If you wanted to organise a meeting about an issue in the past, you would have gone to a civil society organisation. These days, you use social networks. Many of the activities that campaign organisations used to coordinate have been disintermediated by Facebook and other social networks. There are opportunities here. The ease with which millennials used to join Facebook groups has transferred into a new enthusiasm for joining political parties – transforming the outcome of the UK’s 2017 general election on the way.

Leaders in civil society need to be more open to digital ideas. There needs to be investment available for those ideas – investing in the technology to make sure your organisation delivers on its objectives should be a priority. Most importantly, civil society has a vital role to play in shaping the values of a tech-rich society.

Civil society has the creativity, connections, and trust to transform our world. But we need to use the tools that can best achieve that task. And that will require really serious changes – not just in how we approach, appropriate and develop digital technologies, but in how civil society sees its role in the world. Imagine if the world’s dominant social network was committed to civil society values. Imagine if the deployment of civilian drones was to create social value, by transporting organs or blood rather than delivering books and CDs. Just think of the difference a genuine lift-sharing service could make to congestion and air pollution. It is time for the organisations with the position and resources to make these things happen to act.

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Internet freedom as we know it is being threatened by a shady axis of internet service providers (ISPs), the US communications regulator (the FCC), and a swarm of fake public consultation signatories.

The particular freedom in question is net neutrality: a notoriously opaque term which describes the fact that ISPs currently deliver all website content to all users as fast as possible, without charging fees for preferential service. As I write, the FCC is now poised to drop its commitment to enforcing net neutrality.

This is why we fight for Net Neutrality. Image: Matthew Linares, CC-BY-4.0. Tweet this→

Commercial opponents of existing regulation, like internet providers Verizon, Comcast and AT&T, are pushing for the right to deliver websites that pay for the privilege more quickly than sites who don’t. Under their preferred rules, this article might load more slowly than an equivalent piece on a site paying for premium content distribution. Although many of the major players deny this is why they are lobbying on the issue, if they get their way, ISPs would no longer be legally compelled to stay neutral as to what content to show first – money could determine the flows.

Trump’s internet

The Trump regime has replaced the FCC’s leadership with Ajit Pai, a former lawyer for the major ISP Verizon. With its newly appointed chief unsurprisingly acting in line with the demands of big business, the FCC has committed to breaking its previous commitment to uphold net neutrality. That commitment was hard earned through vigorous civil society campaigning and memorable online mobilisations. If it happens, the precedent would be set for similar policy outside the US.

Today’s internet would not have known such immense innovation if less wealthy operators, with good ideas, had been denied the level playing field of net neutrality.

This is a debilitating blow for small online operators, bloggers, startups, consumers and all those who have benefited from the low barrier to entry provided by equal access to all services. Today’s internet would not have known such immense innovation if less wealthy operators, with good ideas, had been denied the level playing field of net neutrality.

Pai has stated that the net neutrality guidance introduced by the FCC two years ago was “a serious mistake”. He has vociferously denounced it as overbearing regulation and even attacked groups, such as Free Press, who have sought to protect it.

The feeling that this is a classic case of business co-opting the regulator is supported by Pai’s previous role as Verizon counsel, and by the scandalous public consultation process being run by the FCC on the issue.

Campaign group Fight for the Future has flagged up the fact that thousands of fake signatures against net neutrality have flooded the online petition. This includes many names belonging to real citizens who actually support net neutrality but have been publicly presented on the petition as opponents of it.

All this suits the big ISPs, and the FCC’s current leadership, but reeks of foul play, and undermines the public reputation of some of those citizens falsely listed. The FCC has whitewashed the matter, and is moving ahead with the consultation regardless.

Unsatisfied with the FCC response, Fight for the Future set up a tool to allow people to check if their name has been abused in this way. In return ISP Comcast has issued a legal threat to shut the tool down for unfair association.

This murky consultation deeply undermines public confidence in the FCC’s competence and commitment to a fair outcome. That a government agency in the time of Trump is unconcerned by fake views affecting democratic process will surprise nobody.

Complicated struggle

The civil society response to the proposals has been significant. The online backlash to previous similar threats to the internet had thousands of sites, including Wikipedia and Google, “slowing down the web” to show what’s at stake. Web-wide protests are similarly planned now.

A day of action is to be held on July the 12th, calling on websites large and small to boldly illustrate the issue to their users.

However, the struggle for net neutrality is complex, not least since people don’t easily understand what the problem is. In 2014, Congresswoman Anne Eshoo took to Reddit with a contest to find a simpler name that communicated the concept more clearly. This failed to find a replacement despite enthusiastic participation.

Yet it is widely recognised as a cornerstone digital rights movement, and has seen seminal support from players such as Tumblr, the hyper-visual blogging monolith, which had been at the forefront of pro-net-neutrality action. In a twist, Tumblr now appears to have gone quiet on the issue, supposedly since Verizon bought out Yahoo, which itself owns Tumblr. Backroom wrangling around the topic is taking its toll.

Notwithstanding the excellent mobilisations from open internet advocates, the FCC’s impending actions could quickly transform the internet into another broadcast channel presided over by large corporations, much like television. Whilst that decision legally affects the US alone, the precedent would be felt further, and most citizens are unaware that this is taking place.

Explaining Net Neutrality: The Last Week Tonight show, with John Oliver

Crowd-sourced action

This is a grave moment that deserves far more attention and yet, amidst today’s political maelstrom, there’s a risk it may remain unseen until it’s too late. Internet activists have a long history of imaginative interventions. The current moment is ripe for novel tactics to give web citizens and consumers greater leverage in this crucial global debate, which is currently dominated by a handful of powerful US groups.

Net neutrality is one of the principles that gave us the internet we know, where small voices with big ideas can innovate quickly to transform society. In light of that, it makes sense to call for imaginative possibilities for resistance.

Net neutrality is one of the principles that gave us the internet we know, where small voices with big ideas can transform society.

The net is alive with clever, user-focused projects which apply novel thinking to challenge structural issues, often at the expense of bigger players. From ad blockers, to obfuscation plugins which confuse data-collectors, there is a good and growing ecosystem of tools to fight back.

In this spirit, I propose a software solution which, if built, could counter the war on net neutrality. Whilst I do not affirm its full technical feasibility and effectiveness, nor can I myself build it with current capacity, I do feel that contributions like this should be encouraged and explored as an exercise in collective, campaign solutions.

The idea is to create a web browser extension that actively slows down loading times for websites known to be benefiting from paid, web-speed privileges. That is: it corrects for what may happen if net neutrality protections are dissolved.

Need Neutrality: A browser extension for equality

Sites proven to be, or suspected of, paying for faster delivery of their content, would be added to a public database and actively slowed down by the extension through the browser e.g. by delaying elements on the given site. Those sites could even be made to load more slowly than other sites so as to compensate for the slowness on other sites experienced by web users without the extension.

Need Neutrality: a proposed web browser extension which slows sites who pay for fast access. Tweet this image→

The tool, or a connected system, could also calculate which sites were benefiting from speed increases by comparing download speeds across users and compiling the results into a shared database. This should be possible given that, ultimately, speed tiering observably affects user experience. There would be other means of adding and removing sites from the blacklist, which itself would constitute an active register of net neutrality’s opponents.

Those using the plugin would be sacrificing speed on certain sites – but such is the nature of protest.

Those who opt to use the plugin would evidently be making the sacrifice of speed on certain sites – but such is the nature of protest. In any case, the inconvenience would be minor compared to the stark nature of the two-tier internet we seek to avert.

Plugin users would also likely emanate from tech savvy demographics, a point of note for sites considering the impact of the business decision to benefit from internet fast lanes.

To push the project one step closer to realisation, I have set up a GitHub repository to start the process of actually building Need Neutrality. GitHub is where developers collaboratively work on software, and most open-source projects have a repository there. My repo contains some boilerplate code and an outline specification for how the system might work. Nevertheless, developers with expertise of relevant aspects will be required to support the project if it’s to get off the ground – so please contribute if you can.

This is not how open-source software is typically made, and people with ideas for such a thing usually need to do more than upload a specification and expect others to do the hard bit – which is what it seems I have just done. However, Github is a platform for various kinds of text-based offerings besides software code including documentation, legal policies, and to-do lists, all of which can be collaboratively improved upon.

If you have any thoughts or contributions to the project, please note them below or get in touch with me.

Range of tactics

I hope we will see many other activist approaches at this critical juncture. We should expect commitments to net neutrality, as a clear matter of ethics, from all firms and internet entities, and I hope campaigns will arise which hold websites to that standard in the most public possible fashion.

Whilst the notion that we could be mere months from the end of net neutrality is disconcerting, we must take the opportunity to bring the web’s connected populations together in new forms of activism. A desirable outcome from this episode would be the retention of net neutrality in such a way that ISPs felt unable to undermine it for fear of consumer action.

The internet is too important as a public space for its core principles to be decided by one, partisan, government agency and a gaggle of profiteers. May this be another of the Trump regime’s careless ploys that trips up at the hands of the people.

July 12th is Battle for the Net action day.

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Smith’s warnings about unchecked corporate power backed by the state should be heeded today.

Some of the United Kingdom’s conservative political thinkers were often surprisingly radical. Edmund Burke, for example, is regularly and favourably quoted by Tory MPs who claim him as the “father” of their movement – a view drawn mainly from his prescient “Reflections on the Revolution in France”, which foresaw “massacre, torture, hanging” and “laws… supported only by their own terrors.”

But the “reactionary prophet”, as Christopher Hitchens described him, also condemned the “absolutely incorrigible” East India Company, sympathised with the treasonous American revolution, and even spent seven years trying to impeach Warren Hastings, the first Governor General of British India. “It is one of the ironies of history”, writes Mithi Mukherjee, “that while Burke, who has been characterised as a leading conservative thinker, sought to defend the rights of Indians against the arbitrariness of the colonial state, it was leading liberal intellectuals like James Mill and John Stuart Mill, who resolutely defended the absolutist nature of the East India Company’s government.”

Every tax is a badge of liberty

Although this side of Burke is frequently forgotten, he has at least avoided the fate of Adam Smith – the towering figure of the Scottish Enlightenment who has been widely presented, well after his death, as the founder of laissez-faire economics.

For instance, the UK-based Adam Smith Institute, which was formed in the 1970s “to promote free market, neoliberal ideas”, describes Smith’s work – particularly the Wealth of Nations (1776) – as “the intellectual foundation of the great nineteenth-century era of free trade and economic expansion.” Smith “realised that social harmony would emerge naturally as human beings struggled to find ways to live and work with each other. Freedom and self-interest need not produce chaos, but – as if guided by an ‘invisible hand’ – order and concord.”

Yet, while self-interest and free markets have become synonymous with Adam Smith in almost every economics textbook, his contemporaries didn’t see it this way. Jeremy Bentham’s letters to Smith – published as Defence of Usury (1867) – strongly criticised his support for laws limiting the rate of interest on loans, which were aimed at preventing damaging speculation by “prodigals and projectors.” And although Smith’s modern followers enjoy quoting his criticisms of clumsy government taxation (“There is no art which one government sooner learns of another than that of draining money from the pockets of the people”), one of the Scotsman’s first public interventions after the Wealth of Nations was to recommend two new taxes to the Chancellor of the Exchequer in the budget of 1788. This is not surprising from a man who wrote that “every tax is to the person who pays it a badge, not of slavery, but of liberty. It denotes that he is subject to government, indeed, but that, as he has some property, he cannot himself be the property of a master.”

If this is a long way from the libertarian view of “taxation as theft”, then Smith drifts even further from his modern followers on the question of “self-interest.” To him, “all for ourselves, and nothing for other people, seems, in every age of the world, to have been the vile maxim of the masters of mankind.”

“Inconvenient” and “destructive”

Smith reserved some of his most strident criticisms for “joint-stock companies” like the South Sea Company, East India Company and Royal African Company which were able to establish monopolies over foreign markets with the imprimatur of Royal Charters. “The directors of such companies”, he wrote, “being the managers rather of other people’s money than of their own”, were inevitably disposed towards “negligence and profusion.” “Such exclusive companies are nuisances in every respect; always more or less inconvenient to the countries in which they are established, and destructive to those which have the misfortune to fall under their government.”

The British Empire on which these companies were dependent now only exists in the mind of the International Trade Secretary, but Smith’s warnings about unchecked corporate power backed by the state remain relevant. Indeed, the most powerful corporations and industries in modern Britain more closely resemble the “exclusive companies” derided by Smith than the independent and enterprising wealth creators idealised by “neo”-liberals.

A good example is the arms industry – one of the few areas of global trade where Britain is undoubtedly a leader. Arms companies like BAE Systems and Rolls-Royce have received significant public support in the form of export credit guarantees – whereby a government agency (UK Export Finance) insures them against buyer default – or more directly in the form of large chunks of Research and Development funding, well out of proportion to the amount of employment that they provide. Between 2008 and 2011, over a sixth of the UK’s R&D funding was devoted to defence, “a fraction that is about three times higher than that of the major industrial nations of Germany and Japan.” Moreover, when these companies get into legal trouble, governments have been willing to make sure that the rule of law doesn’t get in the way of their business interests.

While the taxpayer underwrites this largesse, poor countries are saddled with debt from corrupt British arms deals or killed by British weapons. “Inconvenient”, indeed, to us; and “destructive” to them.

“Radical and egalitarian”?

Other dominant areas of the British economy – such as real estate and finance – have also been enabled by the very visible hands of both Conservative and Labour governments: subsidies for mortgages, tax breaks for landlords, multi-billion pound bank bail-outs, and, again, political shelter from the law.

Adam Smith, though writing before the main “take-off” of modern capitalism, feared this kind of cronyism. He knew that “people of the same trade seldom meet together” without the conversation ending in “a conspiracy against the public”; and that “whenever the legislature attempts to regulate the differences between masters and their workmen, its counsellors are always the masters.”

Drawing on arguments like these – which appear in the Wealth of Nations and at times in The Theory of Moral Sentiments (1759) – the Oxford Politics Professor Ian McLean recently went so far as to declare Adam Smith a “radical and egalitarian.”

This might be a stretch. Smith strongly defended private property and was what we would call a “fiscal conservative” (“What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom”). He was very much a “classical” liberal in the sense of believing in gradual, well-ordered progress. “Commerce and manufactures”, he wrote, “gradually introduced order and good government, and with them, the liberty and security of individuals… who had before lived almost in a continual state of war with their neighbours and of servile dependency upon their superiors.”

A “scathing enemy”

The Wealth of Nations is not a manifesto, and so it is not always easy to find clear policy proposals in Smith’s writing. But his distaste for “exclusive companies”, “scheming monopolists”, and “prodigals and projectors” is a constant theme in his magnum opus. As John Kenneth Galbraith put it: “Corporate executives and their spokesmen who cite Smith today as the source of all sanction and truth without the inconvenience of having read him would be astonished and depressed to know he would not have allowed their companies to exist.”

If Galbraith was exaggerating here, he was almost certainly right in saying that “many people who now yearn to resurrect Smith will find him a scathing enemy if they succeed.”

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We need a plan. We need a story. We need to convince people of a better future. The left has utterly failed to tell a persuasive positive story about the future.

Since the late 1970s wages as a share of GDP have fallen. Meanwhile the earnings of the top 1% have raced ahead. Where people haven’t shared in the expected benefits of growth they have begun to ask serious questions about what the future holds for them.

GDP growth vs median wages.

We have allowed conservatives to present the only convincing alternative to this world as a return to a (largely imagined) past.

This is why immigration is the touchstone issue. While immigrants contribute more in taxes than they use in public services, and there is scant evidence of them reducing wages or ‘taking jobs’, they do offend the nostalgia for an imagined monocultural past.

And as with the worst medical misdiagnoses the reduction in immigration is likely to exacerbate all the problems its advocates believe it will solve. Losing valuable workers from our public services and the taxes they pay, and replacing them with retirees who will no doubt lose their access to Spanish health services will place a double strain on our NHS. If we don’t get our act together who knows which minority will be next to be scapegoated?

And it’s here that we need to seize the argument. There is a tweet which articulates this well. It says “you’d have to have your head in the sand to see the automatic checkouts in the supermarket and think immigrants are taking your jobs”. Yet automation is deemed to be an issue limited to policy wonks and the tech obsessed. When Jeremy Corbyn said “we now face the task of creating a New Britain from the fourth industrial revolution –note powered by the internet of things and big data to develop cyber physical systems and smart factories”, the internet was alive with people mocking him. Yet we know that many of the jobs of today will be automated out of existence in the next decades by machine reading, driverless vehicles and vastly expanded data processing power.

Image macro produced by Labour.

And progressives have no story to tell about this that might make people vote for us as that future arrives. We have abandoned that territory to Trump, le Pen and Farage with their elitist and dystopian dream of a white-power version of the 1950s. We urgently need a political economy of automation, the data rich world and the end of the long industrial revolution.

There are the beginnings of such an approach with the excellent work being done on citizen’s income. But that alone isn’t anywhere near enough. Because the changes coming to our society have wonderfully liberatory potential; a potential we can harness if we seize the opportunity to subjugate these new trends and technologies to a story about the world we want.

But to do this, it’s important to distinguish between two things: jobs and work. On the one hand, the destruction of jobs as we know them isn’t something most people will mourn. On the other, the value of work and the purpose it gives our lives is something we already mourn in the loss of manufacturing jobs. The mistake is to conflate these two things.

We can use automation to replace the drudgery of jobs carried out for other people’s purposes – work that is alienated. And we can focus our lives on the tasks that both make us human and that humans do best. Those things are caring and creating. Oscar Wilde famously observed that “the trouble with socialism is that it takes too many evenings” – less requirement to do alienated work means more time to discuss and agree our future.

People love caring for their families, their friends and those in their community, and the human connection required for true care cannot be replaced by machines. And people love being creative, making things, having dreams and communicating them in pictures and music, and writing and performance and all manner of arts. In ancient Greece, the morally abhorrent practice of slavery freed the slave owning class to be creative, and they were able to lay the foundations of Western science and literature. Automation means that we can unleash the talent and potential of all our people without resorting to the horror of slavery.

So what is to be done?

We have a choice over the future. It doesn’t have to be a choice between a return to a fantasy 1950s or the perhaps-benevolent technocracy of Silicon Valley. Much of the world we are entering depends on information rather than material property. In this sense, it is like the commons that we have always struggled to govern.

And so to understand it, we need to answer a question which our society profoundly struggles to answer. In fact, the greatest crisis of our age – climate change – occurs because our way of governing finds it difficult to incorporate those things that can’t be enclosed and owned into its frameworks or take more than a single term in office to solve. It is clear how a person, a company or a country can own land or buildings or even ideas. It is very difficult to see how the atmosphere can be owned. So, for most of the modern era we didn’t even try. And the result was massive damage to a common that underpinned all life on earth – the environment.

But there is hope. The only woman to win the Nobel prize in economics, Elinor Ostrom, did her life’s work on the commons, showing that societies throughout history have found successful ways to manage them, collectively.

Following her lead, we must develop an economics of the commons to replace the discredited neo-liberalism that has failed so badly since the crash. This economics of the commons must incorporate a system to manage the massive amounts of information now being accumulated about us and our lives. It must offer a way beyond the economics of false resource constraints and it must create an attractive vision of the future.

The most important commons we need to develop a way of governing is the environment. Much of our current economy is based on displacing the costs of doing business into the environment. Either as pollution, or through climate change, price mechanisms can’t and don’t measure the impact of environmentally damaging externalities – you only need to see the failure of carbon pricing initiatives to understand this. And the persistence of free market ideology only makes this more difficult.

This new way living our lives will mean spending much more time negotiating who gets to use what and when. It will mean much more democracy, especially at local levels, as we negotiate the opportunities and limits of the fully automated, data rich world we are entering.

To do this progressives must distance themselves from technocratic governance – while sexism no doubt played an important role in Hillary Clinton’s defeat, a critical factor was the perception that she was perceived as an elite politician representing only an elite who were responsible for the crash of 2008 (this also explains the failure of many of the other Republican nominees, most notably Jeb Bush).

We have allowed the hard right to play at being anti-elitist for too long – the Koch brothers have spent huge sums on creating astroturf (fake grassroots) organisations. We need to become much more vocal in our criticism of the establishment. The approach taken by Podemos in Spain and by Bernie Sanders offers an insight into how this could work. We need to articulate clear demands for redistribution of wealth, for community control of resources such as energy and facilities and for radical democratisation of every aspect of our shared lives.

This is by no means a fully developed programme. It is a call to action and discussion. We need a plan, a story and a vision. Because without one we can’t win. But with one we can unlock the potential of a new world where we can all be profoundly more human.

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If you’ve caught any headlines handwringing about fragile ‘consumer confidence’, then you’ve heard the colloquial language of Chicago-school economics; the trickle-down effects of the work of Milton Friedman, doyen of monetarism and darling of neoliberal politicians. Among his most famous (and most infamously influential) economic theories is the ‘permanent income hypothesis’. According to this theory, people’s spending does not fluctuate wildly as their income rises and falls; as levels of consumption are not only determined by their actual income, but by their expectations of what your future income will be. In this way, your spending tends towards an average based on your expected lifetime earnings; your fictive ‘permanent income’. As Costas Meghir puts it, “individuals base their consumption on a longer term view of an income measure, perhaps a notion of lifetime wealth or a notion of wealth over a reasonably long horizon.”

This has a lot of intuitive heft behind it. Take for instance, people on the brink of retirement. Although they’re likely to be earning a higher salary than at any other point in their lives, they aren’t splashing their cash with abandon; rather, they’re likely to be saving a much greater proportion of their earnings in preparation for the drop in income when they give up work. The hypothesis also makes sense of why students are prepared to saddle themselves with enormously expensive bills for tuition whilst scraping by on meagre incomes; the increased salary supposedly guaranteed by a degree certificate compensates for the initial hit you take. In other words, they’re prepared to spend more than they now earn because they expect that in future, they’ll earn more than they’re currently spending.

This seemingly humble little thesis has huge implications for policymaking. Politicians and economists are perennially concerned with getting people spending, or ‘stimulating effective demand’. In a market economy, it’s pretty important to make sure that people keep buying things, otherwise the whole creaking edifice grinds to a halt. So, you want to get people spending. Particularly, say, when your sluggish economy could really do with a kickstart, after struggling for nearly a decade to haul itself out to the mire of economic crisis. After layoffs, falling wages, and lower household income, people have less available cash to splurge on coconut water or ferret cages or Honda Civics. So, you might be forgiven for thinking that a good start would be to put more money in people’s pockets – by ‘windfall’ programmes, temporary wage-boosts, expanding employment programmes and welfare provision. This is where Friedmanites have long been in contestation with other economists – from the out-and-out marxists to the less rabid freemarketeers. Indeed, the PIH sets itself consciously in opposition to Keynesian efforts to manage effective demand through transitory tax policies and countercyclical spending, on the basis that – all else being equal – an increased household income means increased demand.

However, if you accept that the PIH accurately describes the trends regulating/underpinning consumer behaviour, then simply putting money in people’s pockets won’t boost demand. If people don’t trust that they’ll have more money coming in once that runs out; ‘consumer confidence’ takes a severe knock. So people they don’t spend their windfall, they scrimp or squirrel it away entirely. According to this thesis, counter-cyclical spending pours public funds into the black hole of thrifty consumer anxiety.

The thing to do instead is to boost the economy overall, redirecting focus from the health of the household to the health of corporations, manufacturers, businesses and the like. If households have faith that the economy generally is ticking along, they’ll be more likely to spend instead of save, to empty their piggy banks, take out loans. This reasoning, incidentally, is far from hypothetical. It’s hard to underplay the effects that this kind of thinking has had on policymaking. Friedman and his ilk provided the theoretical foundations for the economic programmes that characterised Thatcherism, Reaganomics, and their neoliberal successors. The PIH provides the (most generous interpretation of the) logic underpinning more recent government moves to cut back on welfare programmes whilst expanding corporate subsidies – all in the name of ‘boosting consumer confidence’. Which all sounds eminently sensible. There’s just one small problem… It doesn’t work. It’s totally bunk.

For a while, economists have been grappling to salvage Friedman’s theory from the mounting weight of evidence that when people get a windfall/sudden boost of income when times are hard, they spend a significantly proportion of it almost immediately – contrary to what the PIH would suggest. Loyalists appeal to ‘credit constraint’; claiming that this only happens when people can’t get loans to plug the gap between what they would otherwise be prepared to spend, in anticipation of shortly finding work again. This fix leaves the hypothesis largely in tact, but also carries with it the implication that economic recovery is dependent on personal indebtedness, which – for anyone with a memory that stretches back a decade or so, is a bit of a worrying proposal. This in itself might be an argument for government intervention in times of restricted credit. But this intervention usually hasn’t taken the form of fiscal stimulus; rather, governments in recent years have preferred the monetarist tack to try and get credit moving, slashing interest rates and instituting quantitative easing and making it easier for households, individuals and companies to borrow to get themselves out of the trap of credit constraints.

But appealing to ‘credit constraints’ isn’t enough to save the PIH; according to a new study by Harvard researchers Peter Ganong and Pascal Noel, it simply doesn’t account for consumer behaviour. In this paper, they examine spending patterns surrounding unemployment and unemployment support payments. Their findings imply that people’s spending habits are much more ‘short-termist’; dependent upon current, actual income and outright necessities than expected future earnings. They found that when people lose their jobs, their spending – unsurprisingly – drops off. This can be explained away by the credit-constraint fix. However, they also show a phenomenon that simply can’t be fixed; when unemployment benefit payments dry up, household consumption plummets. This rapid behaviour-change simply cannot be incorporated into any of the standard models of the permanent income hypothesis. The income drops much more dramatically than do spending levels – but this doesn’t necessarily mean that people are indexing their spending on expected future incomes; rather, it may spring from the short-term thinking that if you’re still want to keep subsisting, you still have to shell out for non-positional goods like housing, energy bills and food. Your spending cannot drop as dramatically as your income – not because of an abstract financial gamble that determines spending behaviour, but simply due to the necessity of remaining housed and fed.

And it’s this basic necessity that is becoming more and more difficult after nearly a decade of austerity and several more of neoliberalism, unleashed by devotees of Friedman and his colleagues at the Chicago school. The Rowntree foundation recently reported that nearly a third of UK households fall below a minimum income level, unable to afford the basics of food, clothing, housing, and some semblance of a social life. Perhaps, then, it is time to finally abandon principles such as the PIH, and the policies it undergirds. Its notorious untruths have provided the ideological excuse to construct the economic architecture of human misery, where penury and personal indebtedness are the lynchpins of national economic prosperity. It’s time to consign it to the dustbin of history.

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According to the World Bank, since 1995 manufacturing has decreased as a proportion of the UK’s GDP from 18% to 10% in 2015. The service economy occupies a staggering 80% of the UK’s economy. In the wake of the recession Britain has faced, it seems prudent to reassess where the nation’s priorities should lie in terms of addressing the balance of the economy.

James Dyson was in the news recently, declaring his intent to invest in a specialised university offering courses to prospective students in specialised fields relating to high-tech and engineering. His stated intent was to compete with the countries of southeast Asia. These countries had a particular speciality in the innovation of manufacturing and scientific research, something Britain is at risk of falling behind in on the world stage.

Innovation of a country is only as good as the education of the workforce that produces it. In this regard countries of southeast Asia are notably world-leading. It is hardly a coincidence then that countries renowned for their manufacturing and technology sectors are also consistently the highest scorers in Program for International Student Assessment (PISA) tests. These tests are a means of ranking the educational prowess of world economies, with Japan most recently being the highest performing large economy in the world. This is a country that Dyson specifically listed as a chief competitor with British cutting edge research and manufacturing.

Generally worldwide manufacturing has decreased as a proportion of GDP owing to automation and cheaper outsourcing to countries like China. This means in order for countries to compete with their manufacturing and industry, they should compete on skills and innovation instead of competing on cost. Japan is an example of this trend. Although Japan’s manufacturing sector has also seen decline, though not nearly to the same extent as the UK, the number of patents applications per year has increased by 40% since 2007. Another indicator of innovation also demonstrates Japan’s researching prestige – there are 5.4 researchers per 1000 people, compared to 4.2 of the UK, and 1.28 world average.

Data Source: World Bank

Research and patents share the same common denominator of an educated workforce. According to a recent government study by the Office for Science the number of graduates will nearly double from 2002 to 2020, and although this would undoubtedly be beneficial for the economy, what may require improvement are the number of applications to STEM (Science, Technology Engineering and Mathematics) related subjects. Although they have increased with time, they are not doing so at anywhere close to the same rate, increasing by 14% from 2004-2014.

Distinguished by ‘world class universities’ and achievements in science, Japan became the technological giant it is today following the post-war years. As the STEM consultancy report authored by the Australian Council of Learned Academies notes, Japan’s solid educational foundation is the result of regularly updated policy analysis, with a particular outlook to international comparative benchmarks. A dip in the 2003 PISA rankings was due to a relaxing of the number of hours the Japanese government mandate children be taught science and maths. The shock of losing pride of place resulted in a change of the system, with the same revised curriculum but with the same hours previous to the reforms that were implemented in 1998. The result of this new adaptation is clear to see, Japan is the 2nd ranking country in PISA scores, second only to Singapore.

While Britain is Europe’s highest achieving large economy in PISA rankings on average, the scores specifically for science and maths are somewhat lacking. Britain scores only slightly higher than the OECD average. There are also regional imbalances. While Scotland, England and Northern Ireland scored above the OECD average, Wales came notably under, on par with Colombia in PISA scores.

Britain ought to take this news the same as Japan did for its ‘PISA shock’ moment, while the scores are not cause for alarm, they certainly aren’t encouraging. The score has more or less been stagnant since Britain join the international ranking.

Innovation is key for the survival of businesses operating in the high-tech sector. The previous coalition government had recognised its importance. A policy review published in 2014 highlighted the need for investment and strategy to coordinate collaboration between academia and business in several areas of technology, robotics and energy storage to name a few. The government must go further and encourage a greater intake of students to supply the knowledge and skills needed to help expand, and it must do so at an early stage of the prospective student’s’ life. Keeping an eye on the international competition, much like Japan and James Dyson, will be vital to make the manufacturing sector more relevant on the world stage, and help rebalance the economy as a whole by making Britain invaluable to an ever more technologically advanced world.

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As health campaigners, we’ve been researching and discussing what to do about PFI for several years now. Having the new Royal London on our doorstep, and with struggling Barts Health NHS Trust paying out £2.4m a week in unitary payments to Innisfree and Skanska, PFI is way up our campaign agenda.

But, until now, we haven’t come across a solution we could wholeheartedly support. However you look at it, the most widely-discussed options – renegotiation of the contracts, centralisation of NHS debt and buy-outs – all have serious flaws. But now we think there’s a solution – and it could be applied to all PFI deals, not just in the NHS.

Let’s nationalise Special Purpose Vehicles

If we’re serious about taking back the public sector, we need to challenge the PFI model in its entirety. We could do this by nationalising the companies, known as ‘Special Purpose Vehicles’ (or SPVs), that have been set up to operate the PFI contracts.

Unlike any of the other ‘solutions’ to PFI, this would allow us to take back control over public assets from private finance companies. It would put an end to the securitisation of public assets like hospitals. They could no longer be used to create inflated debt and profits.

What’s wrong with the other proposals?

• Renegotiating contracts: PFI contract holders have no incentive to renegotiate or abandon them. There’s no danger of default through bankruptcy, because PFI debts are guaranteed by the government. By contrast, nationalising the SPVs would cut through many of the contractual difficulties and come without costly renegotiations or buy-outs. Plus, we’d get back control over our public assets.
• Centralising PFI debt: Shifting responsibility for repayments to the Treasury might relieve hospitals in the short term, but it fails to challenge the PFI model or stop new PFI projects. It would leave our hospitals in private hands and other PFI deals, including those for schools, housing and social care, intact. Importantly, there would be nothing to stop the government from selling on the debt – as it plans to do with part of the student loan book.
• Buy-outs: Buying out existing contacts might return assets to the public sector, but a study of the Hexham buyout proves you can end up saving little.

Why target Special Purpose Vehicles?

Special Purpose Vehicles are central to the PFI process. They are set up by the consortium that wins the PFI contract. The consortium typically consists of a construction company and an investment company.

Loans to pay for the PFI project are raised through the SPV: 90% raised through the bond markets (‘senior debt’) and 10% raised as equity loans (‘junior’ or ‘subordinate’ debt’) direct from the equity holders – the companies behind the SPV.

The hospital or other public body pays a regular unitary charge to the SPV, which has two elements.

• The ‘availability’ charge, which repays the debt, the principal, a nominal rent for leasing back the asset and ‘lifecycle costs’ to maintain the value of the asset – around 60% of the unitary charge.
• The ‘service’ charge for services like maintenance, portering, catering and laundry that are bundled in to the contract – around 40% of the charge.

How SPVs profit at our expense

Drop the NHS Debt and People vs Barts PFI have studied the profits made by the main shareholders in the SPVs for The Royal London, Lewisham, Queen Elizabeth Woolwich, Princess Royal and Bromley Hospitals. We found eight ways that excessive profit is being extracted from our frontline services and withheld from the public sector.

1. Equity holders receive 10-15% interest on their loan to the project (while senior bondholders are typically repaid at LIBOR + a given percentage + RPI).
2. They get dividends from any profit made by the SPV. These can be substantial because there’s often a big difference between amount a hospital pays for a service and the amount the SPV pays the contractor.
3. They get various directors’ fees and ‘administration’ charges.
4. They can sell on their equity – with the average annual return running at 29% between 1998-2012. These gains are not shared with the hospital.
5. They can refinance the original 90% to get cheaper loans and are allowed to pocket 50% of the gain. (But, in practice, only half of the gains anticipated for the public sector have materialised, because of the way refinancing has been defined in the code of conduct.)
6. Service providers under the contract make profits – in some cases, providing sub-standard services, while cutting wages and jobs.
7. SPVs benefit from having public bodies locked in to long service and finance contracts, which are hard to break. Just five companies are now sole or major equity holders for more than 50% of the capital value of PFI projects in the health sector.
8. And, surprise surprise, many equity holders and SPVs are registered in tax havens.

PFIs aren’t just bad contracts or examples of privatisation, they are emblematic of the global trend towards financialisation. PFIs are a tool to harness our public assets as investment vehicles for accumulated capital, in order to maximise private profit. If we’re serious about protecting public services like our NHS from the excesses of neoliberalism, surely we have to do more than just pay up in a different way?

How we propose nationalising SPVs

1. An Act of Parliament could nationalise all SPVs as a matter of principle, or a series of Acts could be passed as individual debts became unsustainable. The Act would set out how much it expected payments to reduce.
2. A national body could be created to own the assets of the SPV companies. It could operate like the German government’s ‘Treuhand’ agency in reverse.
3. The national body would:

• pay all dividends and directors’ fees paid back to the public body making the unitary payments
• return any service profits to the public body (or let the service provider keep them in return for higher standards and better wages and working conditions for staff).
• transfer ownership/control of the assets back to the public body, and
• negotiate compensation.

The above would remove every opportunity for future profiteering.

What about compensation?

The amounts of equity invested are small relative to the size of the project. They could be compensated for in full for simplicity and speed. Negotiations on compensation for loss of revenue would take into account the fact that this revenue is a profit on turnover. The senior debt could be compensated through a bond swap – bonds in the PFI loan would be swapped for government bonds.

And furthermore, compensation for the 10% of the total loan provided directly by the equity holders would depend on the amount of interest already paid. A variety of possible ways to offer compensation could be considered.

How we could start to take back services

In addition, to take back services privatised under the SPV, we would favour legislation to set minimum service conditions for all public sector workers – whether employed directly by the public sector or not.

Zero hours contracts would be illegal, levels of training for all cleaning, catering and maintenance staff would be set, and wages should be set at levels where it is possible to live without claiming any benefits. Firms that failed to comply could be compulsorily purchased.

This legislation would make services a lot less profitable. Private service providers might just walk away – an ideal end to a less than ideal chapter in NHS history.

Let’s talk

We hope you will read the full paper, which sets things out in more detail. With the NHS in such dire financial straits and with a new-look Labour Party that has vocal critics of PFI at the helm, we think there has never been a better time to sort out this appalling mess.

We would like to thank Dr Helen Mercer for developing this new approach to ending PFIs, as an active member of People vs Barts PFI and Drop the NHS Debt. Also, Dexter Whitfield for invaluable comments and advice.

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The UK’s childcare is in a state of crisis. Costs of childcare, particularly in London, are prohibitively high. The majority of nurseries are privately owned and run for profit, and last year there was an 80% increase in the number of nurseries that became insolvent. But it doesn’t have to be this way. A diverse range of parent-led models of childcare provision offer an alternative future, one in which childcare is affordable, high quality and available to all.

Britain has the second most expensive childcare in the OECD – 27% of family income is spent on childcare, compared with an OECD average of 12 per cent. This is particularly acute for parents in London, where part-time nursery prices for a child under 2 are now 35.9% higher than the national average, according to the Family and Childcare Trust. That’s £158.73 a week, compared with £116.77 a week for the rest of the country. Between 2008 and 2015 these prices have risen above inflation while parental wages have been stagnating.

While the government has pledged to increase free childcare hours for working parents from 15 to 30 hours from 2017, this policy fails to examine the quality of childcare that will fill those hours. And yet it is the quality of childcare delivery which needs fixing. Profit margins are tight in childcare. This means that nurseries are often forced to pay low wages to keep their fees affordable. This in turn demoralises and deskills childcare workers, increasing staff turnover and reducing the quality of care for children. Research by SureStart shows that only high quality childcare can improve children’s outcomes. Childcare settings that cannot afford to hire or train childcare workers with early years graduate level qualification miss out on the significant quality boosts highly-qualified childcare workers can bring.

But alternatives are possible, and at an East London Community Centre parents are coming together to demonstrate one model of affordable, high-quality, early years provision.

25 families are working together to offer full time day care for their children, aged between 2 and 5. This is parent-led childcare. The nursery is owned co-operatively and employs five permanent staff, 3 of whom are degree educated. They are all paid the London Living Wage and above. These staff work alongside parents, who take on roles at the nursery in return for a discount on their fees. Parents are involved in the management and organisation of the co-op. What makes parent-led childcare different is that they also do shifts in the classroom, working alongside the staff to look after the children. Parents get £120 per month discount in exchange for doing one shift per week.   

This is Grasshoppers in the Park and it has been running for 14 years. The nursery has come a long way from its beginnings as a group of parents looking after each other’s kids in their own homes to its current status as a fully-fledged nursery with a ‘Good’ rating from Ofsted and a waiting list of 20 families.

The benefits of this kind of parent-led approach to childcare are clear. It gives parents more control over the cost of their childcare, how it fits with their working lives, and the kind of education their child receives. And it can help end the frustration of having to choose between working long hours to pay for expensive childcare and staying at home full time. With this model, parents can afford to work part-time as well as have the chance to be more involved in their child’s education.

“Where can I find a parent-led nursery?” I hear you ask.

This kind of childcare does exist in the UK but it is few and far between. In contrast over 500 such parent co-ops already make up 12% of New Zealand’s childcare provision, while in Sweden over 20,000 children are cared for in this way. The New Economics Foundation is working with the Family and Childcare Trust and the Young Women’s Trust to raise the profile of this type of childcare in order to make it a genuine option for more families. Starting in London, where the cost is biting hardest, they will be rolling out pilot schemes with families with low incomes in early 2017. Watch this space.

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Over the past five or six years, a quiet revolution has been taking place across the UK. I’m not talking about an ideological revolution but an energy revolution. Communities of all shapes and sizes have been pooling their time, skills and finances to develop renewable energy that is not only owned by local people but governed by them as well.

Today, there are around 80 community energy organisations in the UK. Between them, they have brought to life almost 200 renewable energy schemes (mostly wind and solar) and these projects have been funded by over 11,000 ‘community shareholders’ who have collectively contributed nearly £30million in investment. So it’s a growing wave of people-powered green energy.

Here in south-east London, a dozen of us came together two and a half years ago with the idea of expanding the amount of solar energy that was being generated in our part of the capital.  None of us knew each other beforehand but we all had a strong desire to do something about combating climate change at community level.

Together, we formed a not-for-profit co-operative called South East London Community Energy (Selce). It has been quite a rollercoaster ride since then. But, two years down the line, we have raised almost £400,000 and we’ve installed solar arrays on seven local primary schools.

How have we done this?  Well, the secret ingredient is the concept of ‘community share offers’. To raise the money for our solar arrays, we asked everyone in our community to put some money into the fundraising ‘pot’. In return for their support, we’ve pledged to give each investor an annual interest payment of four percent and, after 20 years, we’ll pay back their initial investment.

We are able to do this is because the British government was, until very recently, paying viable subsidies to anyone who produced renewable energy and this subsidy was guaranteed for 20 years. As a result, we’ve been able to create a virtuous circle: our shareholders receive a generous ‘thank you’; the schools receiving our solar arrays get reduced energy bills; and we even designed our financial model so that we’ll have a small surplus to put back into other community projects.

When we started our project, we held several community consultations. We said to local people, if we generate a surplus, what would you like us to do with it?  From the feedback, we got a clear message that there was great concern about the number of people who have to choose between heating and eating.

In our two local boroughs, Lewisham and Greenwich, we’re aware that about 10 percent of households have to choose between putting food on the table or turning on the central heating. With the help of grant funding, we have already run two winter seasons of our pop-up energy advice cafes.  So far we’ve helped over 300 people to better manage their energy usage.

Unfortunately, just when the community energy wave was beginning to make a real difference, the government decided to dramatically reduce the subsidies available for renewable generators – including community organisations like ours. We live in uncertain times but we are determined to find a way to continue with our vision.

In terms of energy and the future, the UK has two options. The government’s view is that we need an ‘energy mix’. This would comprise a tiny percentage of green energy combined with more nuclear power stations (even if we have to pay twice the current market rate for nuclear energy) and a countryside littered with fracking rigs (regardless of their toxic by-products).

The alternative view is that we have to re-think the way we generate and use energy.  In essence, we have to ‘decentralise’ our energy system. This means changing our dependence on a few fossil fuel-guzzling power stations and shifting to a network of numerous smaller power stations generating electricity from solar, wind, tidal, wave, anaerobic digestion and other sustainable sources. This transition will be supported by more energy-efficient bridging technologies like combined heat and power and possibly biofuels as well.

The key to unlocking this door is ‘energy storage’. All too often, we hear cynics say that renewable energy is flawed because it relies on the wind blowing or the sun shining. But this problem can be overcome if we can store some of the electricity generated by renewables. The developments in energy storage are incredibly exciting. There are over 200 commercial-scale energy storage projects being tested around the world and there are more in the pipeline.

To support this move to decentralised energy we will need to replace our old grid distribution system with a more tech-based, flexible ‘smart grid’ system that will enable energy users to take control of their usage. One vision is that every household will have an energy battery on their hall wall. The battery would be charged during the day when energy demand and price is lower. The fully-charged battery would then provide low-cost energy to power the house in the evening  – and, importantly, it would help to level-off spikes in national demand. (If you have solar panels, then you’ll have free energy on tap, even after the sun goes down).

Since volunteering at Selce, a whole new world has opened up to me. I have come across an amazing number of individuals and organisations that are determined to build a future that is cleaner, fairer, healthier and happier. Sometimes it feels like this wave of inspiration and innovation is being held back by a giant dam of political myopia and inertia. I am very glad that to be among the growing number of people who are quietly chipping away at its base. As Ghandi said, we need to be the future we want to see.

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Basic Income is often promoted as an idea that will solve inequality and make people less dependent on capitalist employment. However, it will instead aggravate inequality and reduce social programs that benefit the majority of people.

At its Winnipeg 2016 Biennial Convention, the Canadian Liberal Party passed a resolution in support of “Basic Income.” The resolution, called “Poverty Reduction: Minimum Income,” contains the following rationale: “The ever growing gap between the wealthy and the poor in Canada will lead to social unrest, increased crime rates and violence… Savings in health, justice, education and social welfare as well as the building of self-reliant, taxpaying citizens more than offset the investment.”

The reason many people on the left are excited about proposals such as universal basic income is that they acknowledge economic inequality and its social consequences. However, a closer look at how UBI is expected to work reveals that it is intended to provide political cover for the elimination of social programs and the privatization of social services. The Liberal Party’s resolution is no exception. Calling for “Savings in health, justice, education and social welfare as well as the building of self-reliant, taxpaying citizen,” clearly means social cuts and privatization.

UBI has been endorsed by neoliberal economists for a long time. One of its early champions was the patron saint of neoliberalism, Milton Friedman. In his book Capitalism and Freedom, Friedman argues for a “negative income tax” as a means to deliver a basic income. After arguing that private charity is the best way to alleviate poverty, and praising the “private … organizations and institutions” that delivered charity for the poor in the capitalist heyday of the nineteenth century, Friedman blames social programs for the disappearance of private charities: “One of the major costs of the extension of governmental welfare activities has been the corresponding decline in private charitable activities.”

To Friedman and his many powerful followers, the cause of poverty is not enough capitalism. Thus, their solution is to provide a “basic income” as a means to eliminate social programs and replace them with private organizations. Friedman specifically argues that “if enacted as a substitute for the present rag bag of measures directed at the same end, the total administrative burden would surely be reduced.”

Friedman goes on to list some the “rag bag” of measures he would hope to eliminate: direct welfare payments and programs of all kinds, old age assistance, social security, aid to dependent children, public housing, veterans’ benefits, minimum-wage laws, and public health programs, hospitals and mental institutions.

Friedman also spends a few paragraphs worrying whether people who depend on “Basic Income” should have the right to vote, since politically enfranchised dependents could vote for more money and services at the expense of those who do not depend on these. Using the example of pension recipients in the United Kingdom, he concludes that they “have not destroyed, at least as yet, Britain’s liberties or its predominantly capitalistic system.”

Charles Murray, another prominent libertarian promoter of UBI, shares Friedman’s views. In an interview with PBS, he said: “America’s always been very good at providing help to people in need. It hasn’t been perfect, but they’ve been very good at it. Those relationships have been undercut in recent years by a welfare state that has, in my view, denuded the civic culture.” Like Friedman, Murray blames the welfare state for the loss of apparently effective private charity.

Murray adds: “The first rule is that the basic guaranteed income has to replace everything else — it’s not an add-on. So there’s no more food stamps; there’s no more Medicaid; you just go down the whole list. None of that’s left. The government gives money; other human needs are dealt with by other human beings in the neighborhood, in the community, in the organizations. I think that’s great.”

To the Cato Institute, the elimination of social programs is a part of the meaning of Universal Income. In an article about the Finish pilot project, the Institute defines UBI as “scrapping the existing welfare system and distributing the same cash benefit to every adult citizen without additional strings or eligibility criteria”. And in fact, the options being considered by Finland are constrained to limiting the amount of the basic income to the savings from the programs it would replace.

“Basic Income” won’t alleviate poverty.

From a social welfare point of view, the substitution of social programs with market-based and charitable provision of everything from health to housing, from child support to old-age assistance, clearly creates a multi-tier system in which the poorest may be able to afford some housing and health care, but clearly much less than the rich — most importantly, with no guarantee that the income will be sufficient for their actual need for health care, child care, education, housing, and other needs, which would be available only by way of for-profit markets and private charities.

Looking specifically at the question of whether Friedman’s proposal would actually improve the conditions of the poor, Hyman A. Minsky, himself a renowned and highly regarded economist, wrote the “The Macroeconomics of a Negative Income Tax.” Minsky looks at the outcome of a “social dividend,” which “transfers to every person alive, rich or poor, working or unemployed, young or old, a designated money income by right.” Minsky conclusively shows that such a program would “be inflationary even if budgets are balanced” and that the “rise in prices will erode the real value of benefits to the poor … and may impose unintended real costs upon families with modest incomes.”  This means that any improved spending power afforded to citizens through an instrument such as UBI will be completely absorbed by higher prices for necessities.

Rather than alleviating poverty, UBI will most likely exacerbate it. The core reasoning is quite simple: the prices that people pay for housing and other necessities are derived from how much they can afford to pay in the first place. If you imagine they way housing is distributed in a modern capitalist society, the poorest get the worst housing, and the richest get the best. Giving everyone in the community, rich and poor alike, more money, would not allow the poorest to get better housing, it would just raise the price of housing.

If UBI came at the expense of other social programs, such as health care or child care, as Friedman intended, then the rising cost of housing would draw money away from other previously socially provisioned services, forcing families with modest incomes to improve their substandard housing by accepting worse or less childcare or healthcare, or vice versa. A disabled person whose mobility needs requires additional expenditure on accessible housing may not have enough of the basic income left for any additional health care they also require. Yet replacing means testing and special programs that address specific needs is the big idea of UBI.

The notion that we can solve inequality within capitalism by indiscriminately giving people money and leaving the provisioning of all social needs to corporations is extremely dubious. While this view is to be expected among those, like Murray and Friedman, who promote capitalism, it is not compatible with anticapitalism. UBI will end up in the hands of capitalists. We will be dependent on these same capitalists for everything we need. But to truly alleviate poverty, productive capacity must be directed toward creating real value for society and not toward “maximizing shareholder value” of profit-seeking investors.

There is no possibility of another kind of ‘Basic Income’.

Many people don’t dispute the fact that establishment promoters of UBI are only doing it in order to eliminate social programs, but they imagine that another kind of basic income is possible. They call for a basic income that disregards the “deal” that Charles Murray advocates, but want UBI in addition to other social program, including means-tested benefits, protections for housing, guarantees of education and child care, and so on. This view ignores the political dimension of the question. Proposing UBI in addition to existing program mistakes, a general consensus for replacing social programs with a guaranteed income for a broad base of support for increasing social programs. But, no such broad base exists.

Writing in 1943, with the wartime policies of “full employment” enjoying wide support, Michal Kalecki wrote a remarkable essay entitled “The Political Aspects of Full Employment.” Kalecki opens by writing, “a solid majority of economists is now of the opinion that, even in a capitalist system, full employment may be secured by a government spending programme.” Though he is talking about full employment, which means an “adequate plan to employ all existing labour power,” the same is true of UBI. The majority of economists would agree that a plan to guarantee an income for all is possible.

However, Kalecki ultimately argues that full employment policies will be abandoned: “The maintenance of full employment would cause social and political changes which would give a new impetus to the opposition of the business leaders. Indeed, under a regime of permanent full employment, ‘the sack’ would cease to play its role as a disciplinary measure. The social position of the boss would be undermined, and the self-assurance and class-consciousness of the working class would grow.”

The conflict between the worker and the capitalist, or between the rich and the poor, can not be sidestepped simply by giving people money, if capitalists are allowed to continue to monopolize the supply of goods. Such a notion ignores the political struggle between the workers to maintain (or extend) the “basic income” and the capitalists to lower or eliminate it in order to strengthen their social position over the worker and to protect the power of “the sack.”

Business leaders fight tooth and nail against any increase of social benefits for workers. Under their dominion, only one kind of UBI is possible: the one supported by Friedman and Murray, the Canadian Liberal Party, and all others who want to subject workers to bosses. The UBI will be under constant attack, and unlike established social programs with planned outcomes that are socially entrenched and difficult to eliminate, UBI is just a number, one that can be reduced, eliminated, or simply allowed to fall behind inflation.

UBI does not alleviate poverty and turns social necessities into products for profit. To truly address inequality we need adequate social provisioning. If we want to reduce means testing and dependency on capitalist employment, we can do so with capacity planning. Our political demands should mandate sufficient housing, healthcare, education, childcare and all basic human necessities for all. Rather than a basic income, we need to demand and fight for a basic outcome — for the right to life and justice, not just the right to spend.

This article was originally published on the 8th of August 2016, on Furtherfield website. 

Dmytri Kleiner will speak as part of a panel dicussion on Universal Basic Income at

MoneyLab #3 Failing Better 

1 – 2 December 2016

Pakhuis de Zwijger

tickets: bit.do/moneylab3

Info: networkcultures.org/moneylab/ 

The post Universal Basic Income is a neoliberal plot to make you poorer appeared first on New thinking for the British economy.

We are living through the dawn of a ‘post-capitalist interregnum’ – a prolonged period of social entropy, radical uncertainty and indeterminacy, in which society is essentially ungovernable and no new world order waits in the wings. Tracing the four-stage crisis sequence of neoliberal capitalism up to today’s disintegrating state system, he finds its crux in borderless Europe – and specifically Britain’s fateful referenda.

Capitalism was always a fragile and improbable order that depended on continuous repair work for its survival. Today, however, too many of its frailties have become acute simultaneously, while too many remedies to them have been exhausted or destroyed. Rather than picking one of the various manifestations of the crisis and privileging it over others, I suggest that all – or most – of them may add up to a condition of multi-morbidity, in which different disorders coexist and, more often than not, reinforce each other. The end of capitalism may, then, occur as a death from a thousand cuts – from multiple infirmities, each of which will become all the more untreatable as each will demand treatment at the same time.

In other words, I do not believe that any of the potentially stabilising forces frequently mentioned – be it regime pluralism, regional diversity and uneven development, political reform, independent crisis cycles or whatever – will be strong enough to neutralise the syndrome of accumulated weaknesses that characterises contemporary capitalism as a social order. No effective opposition being left, and no successor waiting in the wings of history, capitalism’s accumulation of defects – paralleling its accumulation of capital – amounts to an entirely endogenous dynamic of self-destruction, one that follows an evolutionary logic moulded but not suspended by contingent circumstances and coincidental events, along a historical trajectory from early liberal capitalism, via state-administered capitalism, to neoliberal capitalism which (for the time being) culminated in the financial crisis of 2008.

Towards social entropy

This is to say that for the decline of capitalism to continue, no revolutionary alternative is required, and certainly no masterplan of a better society that will displace or replace capitalism. Contemporary capitalism as a functioning social order is vanishing on its own account, collapsing from internal contradictions – not least as a result of having vanquished its enemies, who have often rescued capitalism from itself by forcing it to evolve into a new form. What will follow on from capitalism next will, I suggest, not be socialism or some other defined social order, but a long interregnum – no new world system equilibrium, but rather a prolonged period of social entropy; of radical uncertainty and indeterminacy. It is an interesting problem for sociological theory whether and (if so) how a society can turn for a significant length of time into less than a society – a post-social society, or a society lite – until it may or may not recover to again become a society in the full meaning of the term. I suggest that one can get a conceptual handle on this by drawing liberally on the distinction, introduced by David Lockwood back in 1964, between system integration and social integration, or integration at the macro and micro levels. An ‘interregnum’ would then be defined as a breakdown of macro-level system integration, depriving individuals at the micro-level of institutional structuring and collective support and shifting the burden of ordering social life, of providing it with a modicum of security and stability, to individual actors and such social arrangements as they can improvise on their own. A society in interregnum, in other words, would be a de-institutionalised or under-institutionalised society, one in which expectations can be stabilised only now and then by local extemporisation, and which for this very reason is essentially ungovernable.

A post-capitalist society would, then, appear to be one whose system integration is critically and irremediably weakened, so that the continuation of capital accumulation – for a final, intermediate period of uncertain duration – becomes dependent on the opportunism of collectively incapacitated individualised individuals, struggling to protect themselves from looming accidents in their social and economic lives. Undergoverned and undermanaged, the social world of the post-capitalist interregnum – in the wake of neoliberal capitalism’s neutralisation of states, governments, borders, trade unions and other moderating forces – can at any time be hit by disaster: bubbles may implode, for example, or violence penetrate from a collapsing periphery into the centre. With individuals deprived of collective defences and left to their own devices, what remains of a social order hinges on their motivation to co-operate ad hoc with other individuals, driven by elementary interests in individual survival and, often enough, fear and greed. As society loses its ability to provide its members with effective protection and proven templates of social action and social existence, individuals have only themselves to rely on while social order must depend on the weakest possible mode of social integration – Zweckrationalität (or ‘instrumental rationality’).

As explained elsewhere, I anchor this condition in a variety of interrelated developments, including the intensification of distributional conflict as a result of declining growth; the rising inequality that results from this; vanishing macroeconomic manageability, as manifested in, among other things, steadily growing indebtedness, a pumped-up money supply, and the possibility of another economic breakdown at any time; the suspension of postwar capitalism’s engine of social progress, democracy, and the associated rise of oligarchy; the dwindling capacity of governments and the systemic inability of governance to limit the commodification of labour, nature and money; the omnipresence of corruption of all sorts, in response to intensified competition in winner-take-all markets with virtually unlimited opportunities for self-enrichment; the erosion of public infrastructures and collective benefits in the course of commodification and privatisation; the failure, after 1989, of capitalism’s carrier nation, the US, to build and maintain a stable global order; and so on and so on. These and other developments, I suggest, have resulted in widespread cynicism regarding political and economic life, forever ruling out a recovery of normative legitimacy for capitalism as a just society that offers equal opportunities for individual progress – a legitimacy that capitalism needs to draw on in critical moments.

Moving disequilibrium

In recent work I have argued that OECD capitalism has been on a crisis trajectory since the 1970s, the historical turning point being the abandonment of the postwar settlement by capital in response to a global profit squeeze. Subsequently, three crises followed one another: the global inflation of the 1970s, the explosion of public debt in the 1980s, and rapidly rising private indebtedness in the subsequent decade, resulting in the collapse of financial markets in 2008. This sequence was, by and large, the same for all major capitalist countries, whose economies have never nearly been in equilibrium since the end of postwar growth. All three crises began and ended in the same way, following the same political-economic logic: inflation, public debt and the deregulation of private debt started out as politically expedient solutions to distributional conflicts between capital and labour (and, in the 1970s, between the two and the producers of raw material whose cost had long been negligible), until they became problems themselves. Inflation begot unemployment as relative prices became distorted and owners of monetary assets abstained from investment; mounting public debt made creditors nervous and produced pressures for fiscal consolidation in the 1990s; and the pyramid of private debt that had filled the gaps in aggregate demand and citizen satisfaction caused by cuts in public spending imploded when the bubbles produced by easy money burst.

Solutions turned into problems requiring new solutions which, after another decade or so, became problems themselves; these problems called for yet other solutions that soon turned out to be as short-lived and self-defeating as their predecessors. Government policies vacillated between two equilibrium points, one political, the other economic, that had become impossible to attain simultaneously. Attending to the need for democratic political legitimacy and social peace, so as to live up to citizen expectations of economic prosperity and social stability, they found themselves at risk of damaging economic performance. Conversely, efforts to restore the economy to equilibrium tended to trigger political dissatisfaction and undermine support for the government of the day, and for the liberal-capitalist market economy in general. 

Actually the situation was even more critical than that, although it was not perceived as such for a long time, as it unfolded only gradually, spread out over two or three political generations. Intertwined with the crisis sequence of the 1970s onwards was an evolving fiscal crisis of the democratic-capitalist state, again basically in all countries undergoing the secular transition from state-administered ‘late’ capitalism to neoliberal capitalism. While in the 1970s governments still had a choice, within limits, between inflation and public debt as means of bridging the gap between the combined claims of capital and labour and the resources available for distribution, after the end of inflation at the beginning of the 1980s the ‘tax state’ of postwar capitalism began to change into a ‘debt state’. In this it was helped by the growth of a dynamic, increasingly global financial industry based in the de-industrialising headquarter country of global capitalism, the US. Concerned about the capacity of its new clients – who were, after all, sovereign states – to unilaterally cancel their debt, an increasingly powerful financial sector soon began to seek reassurance from governments on their economic and political ability to service and repay their loans. The result was another transformation of the democratic state, this time into what I have called a ‘consolidation state’, which began in the mid-1990s. To the extent that consolidation of public finances through spending cuts resulted in overall gaps in demand or in popular discontent, the financial industry was happy to step in with loans to private households, provided that credit markets were sufficiently deregulated.

Since 2008, we have been living in a fourth stage of the post-1970s crisis sequence, and the by now familiar dialectic of problems treated with solutions that themselves turn into problems is again making itself felt. The three apocalyptic horsemen of contemporary capitalism – stagnation, debt and inequality – are continuing to devastate the economic and political landscape. With ever-lower growth, as recovery from the Great Recession made little or no progress, deleveraging had to be postponed ad calendas graecas, and overall indebtedness is higher than ever. As part of a total debt burden of unprecedented magnitude, public debt has jumped up again, not only annihilating all gains made in the first phase of consolidation but also effectively blocking any fiscal effort to restart growth. Thus unemployment remains high throughout the OECD world, even in a country like Sweden where full employment had for decades been a cornerstone of national identity. Where employment was restored it tended to be at lower pay and inferior conditions, due to technological change, ‘reforms’ in social security systems that lowered workers’ reservation wage, and de-unionisation and the attendant increase in the power of employers. Indeed, ‘recovery’ often amounts to replacement of unemployment with underemployment. Although interest rates are at a record low, investment and growth refuse to respond, giving rise to discussions among policymakers about lowering them further, to below zero. While in the 1970s inflation was public enemy number one, now desperate efforts are being made throughout the OECD world to bring it up to at least 2 per cent, thus far without success. While in the past it was the coincidence of inflation and unemployment that left economists clueless, now it is very cheap money coinciding with deflationary pressures, raising the spectre of ‘debt deflation’ and of a collapse of a pyramid of accumulated debt that far exceeds that of 2008.

Foremost among the signature characteristics of the current, fourth phase of the post-1970s crisis sequence is the rise of the central banks to supreme economic policymaking power – central banks that have, in the course of the liberalisation process, been made independent from national governments by national governments, consequently making them all the more dependent on their other partner, the private banking industry. Since the Great Recession, the same central banks that had been responsible for the easy money policies that had produced the bubble have been keeping the global economy alive by injecting a continuous stream of cash, created out of thin air, into the international banking system. How long they will continue to do so, and on what conditions, is considered a technical question beyond the competence of governments and electorates. This also applies also to the question of which commercial and government bonds central banks should buy in order to bring new money into circulation – a practice that has no less than tripled the balance sheets of the leading central banks since 2007. Unlike governments, central banks deliberate and make decisions in full secrecy, out of the public view, with the full support of governments which, given the proven uselessness of their own policy instruments and their complete lack of ideas on how to bring back growth and stability, depend vitally on being able to delegate responsibility for economic policy to supposedly non-political actors and institutions.

Interregnum

Why, if capitalism is on its way out, is there no non-capitalism waiting in the wings of history? A social order breaks down if and when its elites are no longer able to maintain it; but for it to be cleared away, there has to be a new vanguard able to design and eager to install a new order. Obviously the incumbent management of advanced and not-so-advanced capitalism is uniquely clueless. Consider the senseless production of money to stimulate growth in the real economy; the desperate attempts to restore inflation with the help of negative interest rates; and the apparently inexorable coming apart of the modern state system on its periphery. Concerning the latter, systemic entropy originates in the weakening position of the US as the host nation of global capitalist expansion. Historically capitalism always advanced on the coattails of a strong, hegemonic state opening up and preparing new landscapes for capital accumulation, through military force or free trade, and indeed typically through both. Political preparation for capitalist development included not just the breaking-up of pre- or anti-capitalist social orders, but also the creation of new, ‘modern’ societies supportive of private capital accumulation. After 1945, this meant the establishment of a global system of secular states with a ‘development’ agenda, sovereign but integrated in an international free trade regime. Also on the agenda was the containment and, if necessary and possible, suppression of alternative, oppositional systems – a program that at first glance came to its victorious completion in 1989.

This, however, was not the whole story. As it turned out, the US, while still able to destroy its enemies, had lost the capacity to replace them with stable pro-American and pro-capitalist regimes – losing its constructive powers while retaining its destructive ones. The causes of this include the demonstration effect of the defeats suffered by the US in successive wars, as well as declining domestic support for what a majority of US citizens now considers foreign ‘adventures’. ‘Nation-building’ having failed in large parts of the world, the global system of semi-sovereign, development-friendly free-trade states as originally envisaged shows growing holes and gaps, with failed states as a permanent source of unpredictable and increasingly unmanageable political and economic disorder. In many regions, fundamentalist religious movements have taken control, rejecting international law and modernism in general, and seeking an alternative to the capitalist consumerism which they can no longer expect to replicate in their countries. Others, having abandoned hope for ‘development’ at home, are trying to join advanced capitalism by migrating from the periphery to the center. There they meet with second-generation immigrants who have given up on ever being fully admitted to the capitalist-consumerist mainstream of their societies. One result of this is another migration – the migration of the violence that is destroying the stateless societies of the periphery into the metropolis, in the form of ‘terrorism’ wrought by a new class of ‘primitive rebels’ that lack any vision of a practically possible progressive future, of a renewed industrial or new post-industrial society both developing further than and overcoming the capitalist society of today. Not just capital and its running dogs, but also their opponents, today lack a capacity to act collectively. Just as capitalism’s movers and shakers do not know how to protect their society from decay, and in any case would lack the means to do so, their enemies, when it comes to the crunch, have to admit that they have no idea of how to escape neoliberal capitalism – see the Greek government and its capitulation in 2015, when the ‘Eurogroup’ began to play hardball and Syriza (to use a different metaphor) had to show its hand.

The historical period after the death of capitalist society from an overdose of capitalism will be one lacking collective political capacities, making for a long and indecisive transition – a time of crisis as the new normal, a crisis that is neither transformative nor adaptive, and unable both to restore capitalism to equilibrium and replace it with something better. Deep changes will occur, rapidly and continuously, but they will be unpredictable and in any case ungovernable. Western capitalism will decay, but non-Western capitalism will not take its place, certainly not on a global scale; and neither will Western non-capitalism.

With regards to non-Western capitalism, China will for many reasons not be able to take over as capitalism’s carrier nation and provide an orderly global environment for its further progress. Nor will there be a co-directorate of China and the US, amicably dividing between them the task of making the world safe for capitalism. And concerning non-capitalism, there is no such thing today as a global socialist movement comparable to the socialisms of the 19th and early 20th centuries, which so successfully confronted and transformed capitalism in national power struggles. As long as capitalist dynamism continues to outrun collective order-making and the development of non-market institutions, as it has for several decades now, it disempowers both capitalism’s government and its opposition, resulting in capitalism being neither reborn nor replaced.

The state system in disarray

The social disorder of the beginning of this interregnum makes itself felt at the macro level in a wide variety of dysfunctions of states and governments. In one way or another, they are all related to the politically willed obsolescence of national borders in a global economy, and the contests that arise over it. Border contests raise basic issues concerning the relationship between nationalism and cosmopolitanism, national government and global governance, and particularism and universalism, in ever-new configurations and permutations. Generally, in an era of ‘globalization’, governments are coming under pressure to open up their countries, rendering national borders economically and politically irrelevant. As a consequence they must commit to a policy of structural ‘adjustment’ in order to make their societies ready for global competition, by cutting back on protective social policies in favor of ‘enabling’ ones, while increasingly allowing their citizens to be exposed to the vagaries of international markets.

Redefining borders in line with the demands of globalisation and in pursuit of liberalisation invalidates national democratic institutions as channels for transmitting popular demands for social protection against market pressures. For a while this resulted in electorates – and particularly voters at the lower end of the income distribution – losing interest in democratic politics. As restructuring pressures increased, however, voters negatively affected by liberalisation and globalisation rediscovered political participation as a means of expressing protest. The resulting increase in electoral turnout benefits new ‘populist’ parties, mostly on the right but sometimes also on the left. Their common denominator is a radical rejection of established political elites, combined with insistence that national democracy supersedes the demands of international markets.

Ideologically, the ensuing conflict is complicated by the fact that free-market liberals have found it convenient to appropriate the internationalism of the progressive left as a rhetorical tool with which to discredit social protection and the institutions associated with it – in particularly national democracy and the national welfare state. As a result, their defenders run the risk of being accused of nationalism or xenophobia, and indeed racism. The way the discourse over globalisation and democracy is unfolding, it is driving a wedge into the constituency of left-liberal political parties, between their new middle-class supporters who profess to internationalism in the name of universal solidarity, and their traditional working-class voters whose experience tends to be that open borders undermine their jobs and ways of life. The issue is particularly relevant when it comes to immigration and the possibility it raises for developed national economies to attract an unlimited supply of labour, without having to improve the conditions in which families raise children. Here, conflicts over economic interests may become particularly acute and emotionally and ideologically charged, as those hoping to benefit from lower prices and better quality – for example, in the provision of services – may be tempted to deploy a universalistic rhetoric of international solidarity in order to silence those who feel threatened by low-wage competition.

Returning to the architecture of the contemporary state system and its growing dysfunctionality, all attempts to move redistributive government and the protective national welfare state to the international level have failed – even in Europe, where these attempts were more consciously made than they were elsewhere. In the course of the 1980s, at the latest, the social democratic project to turn the then European Community into a transnational welfare state was aborted, its most effective opponent being the British government under Margaret Thatcher. Subsequently, ‘Europe’ became a liberalisation machine for its associated national political economies, with particular emphasis on social policy cutbacks, the privatisation of public services, and fiscal consolidation. Today, European integration is essentially about cutting back on corrective state intervention into the capitalist market economy and extending the so-called ‘four freedoms’ of the internal market, including the free movement of labour, as a quasi-constitutional right of citizens of all member states.

The British model

Freedom of movement became a prominent issue with the eastern accession in 2004. It was, not surprisingly, Britain (this time under New Labour) which made the most extensive use of the liberalisation of European labour markets, by waving the waiting period allowed under the treaties and immediately opening its national economy to eastern European labour. (Germany under Schröder, by contrast, chose a waiting period of seven years.) Clearly the intention of this move was to improve the labour supply in Britain both quantitatively and qualitatively, to compensate for domestic skill deficits while keeping wages low. It appears that the move added roughly 750,000 Polish workers and several hundred thousand other eastern Europeans to the British labour force in a short time.

In subsequent years, strong moral pressures from an all-party pro-immigration ‘grand coalition’ notwithstanding, dissatisfaction with labour market internationalism and EU immigration rules seems to have grown in Britain, frustrating all attempts to establish legitimacy for a borderless cosmopolitan (that is, non-protective) nation state. A powerful expression of this dissatisfaction was the rise of a new political party, the UK Independence Party (Ukip), which articulated the rising popular discontent through a call for Britain to leave the EU that reflected an apparently widespread feeling that the country should ‘take back control’ over its borders. ‘Taking back control’ promised a restoration of democratic accountability that many, including those on the liberal left, felt had been lost to Brussels’ summit diplomacy and technocracy. With hindsight it seems that the idea that Britain should again be free to make its own laws was given added momentum by the spectacle of the treatment of Greece as a member of the European monetary union, and also by the claim of the German government in 2015 that its peculiar, domestically motivated interpretation of European and international law on refugees and asylum seekers had to be binding for Europe as a whole, including Britain.

Politics makes strange bedfellows, and this should be particularly true in times of systemic disintegration and radical uncertainty. The story of Brexit may be taken to illustrate the bizarreries of the perverse political power plays that become possible when an old social order is dying without a new one waiting to take its place. To the outside observer, it appears that popular anti-European pressure must at some point have become so strong that David Cameron’s Conservative party felt a need to once and for all re-establish the legitimacy of open-borders liberalism. The way this was to be done was by calling a referendum on Britain’s membership of the EU, which Cameron was confident he would win thanks to a package of superficial concessions on the free movement of labour that would be provided by Brussels. No thought was given to what would happen if the vote was lost, because it was firmly expected to be won. That the same party would spawn a movement to leave the EU must have come as a surprise, especially since Leavers and Remainers shared the same neoliberal economic philosophy. Probably the prospect was too tempting, given that it promised to carve the Labour party up right in the middle by luring its working-class supporters into the Conservative camp while also finishing off Ukip, thereby establishing ever-lasting electoral hegemony for the Conservatives. Here, no thought was given to what was to be done if the referendum was won, perhaps because the strategic goal of the Leave camp within the Conservative party would have been achieved even if the vote was narrowly lost.

That the politics of Brexit, national idiosyncrasies notwithstanding, are informed (or misinformed) by a deep general crisis of the contemporary state system that is in turn related to the decline of the capitalist social order is already evident from the fact that the referendum on British membership of the EU was preceded by a referendum on Scottish membership of the UK. Like national sovereigntism, regional separatism reflects declining confidence in a (self-)disempowered national state that has given up its capacity to protect its citizens from market forces in deference to international liberalisation. (That Scottish separatists seem to intend to subject themselves, upon achieving independence, to the very liberalisation engine that the UK has just decided to leave is another oddity that is characteristic of a situation of radical uncertainty in which being small may seem beautiful but is also risky.) The struggle over British EU membership, intertwined as it is with the struggle over Scottish and, perhaps, Welsh and Northern Irish UK membership, may be taken as one manifestation among others of the ‘sinister phenomena of the most diverse sort’ that, according to Gramsci, are to be expected in an age of interregnum: a search for political and institutional reconstruction under conditions of structural indeterminacy, offering ample opportunity for disoriented, arbitrary, frivolous and cynical maneuvering as the state system of neoliberal capitalism turns dysfunctional with no cure in sight.

Ironically, the first modern state, the UK, could be also the first to disintegrate, after having, under Thatcher, foreclosed the European rescue of the social-democratic welfare state in the 1980s. Equally ironically, it is Britain, which was instrumental in turning European integration into a neoliberal restructuring tool, that is now putting an end to its further progress. As the supranational order of integrated Europe is breaking down, nobody knows how a renationalised state system is to be sustained and operated in a globalised political economy – note the absence of a plan B on the part of the Remainers, and of a plan A among the Leavers. How will the newly sovereign Britain of the future use its reinstated borders to ‘take back control’ of its collective fate?

One cannot avoid taking note of the new prime minister’s Birmingham speech of 11 July, which won her the support of her party. While she vowed to honour the outcome of the referendum and duly resign from the EU (an organisation, of course, that is now – for reasons of its own, related again to the multi-morbidity of contemporary capitalism – so moribund that one doubts whether it will still exist in five years), she also interspersed her obviously carefully crafted speech with a ‘one nation’ rhetoric not heard from a Conservative leader since the 1980s (but heard from a Labour one rather more recently): less inequality, controls on executive compensation, more equitable taxation, better public education, a voice for workers in corporate governance, protection of British jobs from relocation abroad, and so on – all of this, of course, combined with less immigration. This program, clearly to the left of the Labour party in its New Labour incarnation, may have been ‘just political’ – if not, it may soon turn out to be impractical. But it is interesting nevertheless that it appeared when and where it did. It perhaps had to appear in this particular historical moment.

This article was initially published in Juncture, the journal of the Institute for Public Policy Research.

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According to latest YouGov polling, more than one in four of us are working longer hours than we want to. The UK tops the European long hours league, and research published by the TUC last year revealed that the number of people working over 48 hours a week has increased by 15% since 2010.

This culture of overwork is bad for us; for our health, for our relationships, for our communities. Numerous studies have documented the adverse effects of long working hours on our health, with overwork linked to heavy drinking, impaired sleep, depressive symptoms and heart disease.

Overwork has also been linked to the rise of the ‘precariat’: workers in low-end jobs with zero-hours contracts, insulting pay and little security. Many of these jobs are found in industries which thrive on the over-busyness of other workers; delivering them food (Deliveroo), driving them around (Uber) and fixing things around the house (TaskRabbit). Many precarious workers have to do two or three jobs just to make ends meet. So they are under heavy pressures too, often torn between poverty and an intolerable work-life balance.

We have lost control of our working lives. But a dysfunctional labour market is far from inevitable. Around the world, increasing numbers are bucking this trend of overwork, insecurity and low wages, and are instead recognising the value of a shorter working week and the benefits it can bring to our communities, our societies and our economies.

In Sweden, employers across the country are moving to a six-hour working day to improve productivity and staff wellbeing. Toyota centres in Gothenberg, Sweden’s second largest city, made the switch thirteen years ago, and the company has since reported higher productivity, with mechanics producing, in 30 hours of work, 114% of what they used to produce in 40 hours.

A nursing home in the same city has switched from an eight to six hour work day- with nurses retaining the same wage- in a bid to tackle levels of depression and exhaustion amongst the care staff. The trial is proving a success. Nurses working shorter days take half as much sick leave as those in the control group, there have been marked improvements in staff wellbeing and quality of care and staff turnover has fallen.

The shift towards shorter, more flexible working arrangements is not confined to Sweden. An increasing number of start-ups, from Merseyside to Utah have been trialling shorter working arrangements with great success. Earlier this year, staff at the Glasgow-based firm Pursuit Marketing moved to a four day week whilst retaining the same pay, and since the shift the firm has seen a 30% increase in productivity and a dramatic fall in sickness absence.

Clearly, a shorter working week could drastically improve the quality of our work and our quality of life, both within and outside of the workplace. So how can we make it happen? How do we give control back to the individuals and families who need it most?

The move to shortening the work week needs to be gradual, with a minimal impact on pay. New entrants to the labour market could start on a 30-hour week, while workers over 50 could take a one hour cut in their working week each year, reaching a 30-hour week at 60 and 20-hour week at 70. At annual pay negotiations, workers could be offered the opportunity to trade a bit of time each year for a smaller pay rise.

To enable everyone, particularly those stuck working long hours because of inadequate pay, to work fewer hours, a shorter working week must go hand in hand with a higher minimum wage, more generous child benefit and a more secure ‘social income’ in terms of high-quality services that are collectively funded and provided.

Research from the New Economics Foundation has extensively documented the social, environmental and economic benefits a shorter working week could bring. A world with a standard working week of 30 hours or less would be one in which we all have more time – to care for one another, to be active members of our communities and to participate in democracy. With more time, we could lead more sustainable lives, cooking and growing our own food and moving away from the carbon-intensive, fast-paced lifestyles that are today’s norm. With a decrease in overwork, caring responsibilities could be more evenly divided between genders, challenging gender norms and leading to more equal workplaces and a shrinking pay gap.

Across the world, people are showing us that a shorter working week is not just a utopian dream, but a real, practical possibility for a better life, one in which we are less stressed, less anxious and have more control over our lives.

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When the government announced plans to cut £4bn of in-work social security in its summer budget last year, it was widely condemned by commentators and organisations for hitting some of the poorest working families hardest.

The cuts, which focused on tax credits, were subsequently scrapped by the Government during its Autumn Statement, but this merely deferred the pain. Rather than being shelved altogether, the cuts were instead transferred to the new social security system of Universal Credit (UC), now being rolled out. The result is the same: huge numbers of families are being squeezed, with their incomes reduced as they move onto the new system.

Universal Credit works by pulling together a number of social security strands into a single payment to recipients. As people earn more, their UC payments are then gradually withdrawn. In principle, it’s a simple idea that should make the system more efficient, but the design of the current policy comes with a fatal flaw – the swingeing rate at which UC is withdrawn.

Analysis by the Equality Trust found that once UC withdrawal and other taxes are taken into account, many recipients would keep barely a quarter of their additional earnings. Far from helping people ‘lift themselves out of poverty’, the eye-wateringly high marginal tax rates people face under UC mean they are more likely to be locked into low incomes. This is all the more galling when considering that a person in the richest 1% faces a far lower tax rate, keeping more than half of their additional earnings.

This might be consistent with a plan to reduce overall public spending, but the government remains committed to reducing taxes on the well-off at significant cost to the public purse. Raising the income tax personal allowance, the amount someone can earn before they pay income tax, will cost £4bn across this parliament, and will disproportionately benefit higher income households. Raising the threshold at which the higher rate of income tax is paid will similarly only help those on higher incomes.

These policy decisions reinforce the UK’s extreme levels of inequality, to the profound detriment of our society. The UK is one of the most unequal countries in the developed world, and evidence shows this extreme inequality damages trust and social participation, encourages crime, decreases social mobility, shortens life expectancy and increases debt. It means we suffer from poorer educational outcomes and worse mental and physical health than developed countries with greater equality. Our system of in-work social security, and the new system of Universal Credit, exacerbates this inequality.

So what can we do to change this? The answer is simple: the government should reduce the rate at which UC is withdrawn. The original plans for UC envisaged recipients losing 55p of every additional pound, but this was changed to a more punishing rate of 65p. Combined with other taxes this means recipients lose 76p of every additional pound they earn.  Reverting to a more generous 55p withdrawal rate would cost the government £4bn across a parliament, but it would make a real difference to those who are struggling. A single parent, for example, could be over £125 a month better off.

This could be paid for by freezing the planned increased in the income tax personal allowance, and unlike the personal allowance, it would be of far greater benefit to low income households and the famed ‘just managing’ that the Prime Minister has sworn to serve.

This wouldn’t just be a fairer system of social security; it would also be a more popular one. Polling conducted by Ipsos MORI on behalf of The Equality Trust found strong support for reducing this tax on aspiration, with a clear majority believing that people on low incomes should be able to keep more of what they earn. Smart politicians would seize on this, and offer the public what it wants.

Being able to make ends meet, to begin to save for the future and to be free of the blight of poverty and insecurity is an aspiration we all share. We all want to know we can secure a dignified retirement. We all want to build a better life and better opportunities for our children. When the social security system works well, it supports these goals, fighting poverty by supporting those out of work, helping people back into work, and encouraging progress through work. In doing so it also reduces our dangerously high levels of inequality.

Instead, Universal Credit acts as a brake on the opportunities for low income households. At the same time, successive governments have built a wider system of taxes and social security that prioritises lowering the taxes of the rich, whilst failing to tackle the barriers that impede the poor.This has to change; a system of Universal Credit that allows low income households to keep more of the money they earn would be a good place to start.

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Why didn’t Transport for London (TfL) invent Uber – and would Londoners be better off if it had done? The issues raised by this question are important and go beyond both transport and London and make us ask who and what the digital revolution is for.

In the jargon, Uber is a digital platform that facilitates peer-to-peer transactions between clients (in this case passengers) and providers of a service (Uber drivers). This allows Uber drivers to increase the use of an under-utilised asset (their vehicle) with little to no transaction cost beyond that imposed by Uber, provider of the platform that makes all this happen.

Platforms such as the one provided by Uber could prove useful in helping us make London a cleaner, more efficient and prosperous city. More shared transport could reduce car use and ownership as people recognise the ease and relatively low cost of jumping in another person’s car. Less ownership and a more efficient use of the remaining vehicles may also lead to reductions in air pollution, CO2 emissions and congestion, and, without so many roads, allow us to change the city’s layout to make living and working easier and healthier.

Platforms like Uber could also do the opposite, increasing the amount of traffic and adding to existing air pollution and CO2 emissions. This is a future in which London’s roads are swamped by private hire vehicles as a precarious job market pushes more people to become Uber drivers. The danger that this model leads to the erosion of labour rights is already with us, an issue that was at the heart of a recent court ruling to block Uber classing its drivers as self-employed. Uber is also famously set up to avoid tax, posting £22,000 tax on a £866,000 UK profit in 2015.

The societal, economic, and environmental effects of peer-to-peer transport platforms such as Uber are only just starting to emerge. Despite the potential for some short-term benefits there may be longer term problems that are difficult to reverse once these platforms become fully integrated into society and the economy.

A major concern is whether the commercial objectives of those who have developed and own these platforms align with the public interest of cheap, clean, efficient transport, and if they do not, whether there are appropriate levers for improving the situation. This brings us back to the twin questions of whether the public good would be maximised (or protected) if Uber were invented by TfL, and, if so, why TfL didn’t invent it.

TfL’s job is to deliver the Mayor’s strategy and commitments on transport, which presumably involve improving transport in the public interest. If peer-to-peer transport platforms could help realise these commitments, then one could argue it was well within the purview of TfL to invent one for London, linking the ability to list yourself or a company to certain conditions, including standards on environmental impact, passenger safety and labour rights.

A TfL app could have also raised significant revenue, an issue that is increasingly pertinent for TfL as it will lose its day-to-day running grant from 2018. London will then be the only city in Europe without a transport subsidy and TfL will likely have to increasingly commercialise or sell its assets.

There are many reasons why TfL may not have wanted, or been unable, to invent a peer-to-peer platform for London. Primarily, TfL raises its revenues from the public transport network it runs and so a platform that could encourage people to jump in cars instead of heading underground would raise questions around the effect on revenues, as well as the unproven environmental outcomes.

Presumably the black cab lobby would have had a lot to say, though it’s possible they could have benefited from being able to list their services on a platform that wouldn’t see them as competition to defeat, as Uber does. A lack of resources for innovation and future thinking may have also played a part. TfL has, and continues, to battle at the forefront of transport innovation, but we should ask whether its current and future resources enable it to continue this battle in a world increasingly disrupted by digital technology.

Beyond just TfL, the attitude toward the role of the public sector and of the state is important here. For the last few decades, political narratives and economic thought have been dominated by the assertion that the public sector is inherently inefficient and wasteful, leading to decisions that inevitably validate this assertion.

In reality, the time for TfL to invent a peer-to-peer transport platform along the lines of Uber has now passed. But the next opportunity is already with us. Around the world, a number of companies and public bodies are developing the idea of ‘mobility as a service’. These platforms build on the concept of Google Maps and Citymapper by offering a monthly subscription for all transport use – imagine a mobile phone contract but for mobility, where you pay, say £300, and get unlimited use of tube, bus, Santander bikes, taxis, and car share within zones 1, 2 and 3. Suddenly, getting from A to B involves seamless mapping and payment, and, if the car share market develops, means you will never need to own a car.

The knock-on effects could be enormous. If TfL were to develop this platform for London it could have some control over these effects. TfL could decide that companies like Uber would only be able to list services on the app if a proportion of their vehicles were electric, for example, or if their staff were entitled to certain employment rights. Presumably the app would become the go-to for getting around London and so it would be in Uber’s commercial interest to do so.

If TfL doesn’t develop this platform, a private company may do so. If this enabled the platform to be developed and that platform helped deliver good environmental and other outcomes, then so be it, some will say. But this would mean that TfL would lose the ability to drive outcomes directly and, assuming the UK government’s ideas don’t change for some time, the scope for regulating the private sector’s actions is limited. London’s mobility as a service platform could then end up like Spotify, for example, where advertising and other conditions are the norm unless users pay for a premium account. One could imagine a future where the owner of this platform could, say, cut a deal with McDonalds and so your taxi ride would go via the drive-thru unless you pay for a premium subscription.

To limit the chance of this world emerging, TfL should invent an app that turns London’s public and private transport network into a service. Considering why TfL didn’t do this in the case of peer-to-peer platforms like Uber helps us understand the barriers to realising the full potential of the digital disruption of transport. It also helps us pose a more fundamental question. Digital technology could enable unprecedented opportunity to remould transport for the public good; will that good be maximised, or even possible, if digital infrastructure is wholly private?

The answers to these questions will have an impact far beyond the transport sector. They are a cautionary tale for the future of our political economy. In short, the digital revolution is disrupting large swathes of society and economy and the pace of this disruption is accelerating. With it comes the potential for great negative as well as positive outcomes. The state – our means of steering these outcomes – is smaller, more under-resourced and more discredited than ever before. This is very dangerous. In developing our response, we must decide whether to be the architects of the future, or its victims.

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In the weeks and months following the 23rd June, there has been no shortage of insightful commentators queuing up to explain the root causes of the Brexit vote. Most of us on the left have grown weary of sitting through seemingly endless meetings in small airless rooms while a journalist or politician skillfully rearticulates the fact that this was a ‘protest vote’, and a ‘howl of rage’ from the ‘left-behind communities’ who had been powerless and voiceless for too long. Research conducted by the Joseph Rowntree Foundation into the EU referendum argued that ‘people who felt that they had been pushed to the margins of society, on low incomes and living in low-skilled areas, were the driving force behind Brexit’. While these observations are of course both important and accurate, it seems that perhaps the ’48-ers’ are so busy talking to each other about what the ‘leavers’ really want, think and feel, that there is no time left to actually listen to them. So last week, we did.

Armed with 400 flyers, we hit the streets of Barking and Dagenham saying we wanted to hear from local people what they thought about their lives and the state of politics. We had conversations about immigration and multiculturalism in primary school classrooms, discussed anti-social behaviour in the local pub and debated the efficacy of the Borough’s finance, growth and investment policies after Friday prayers. People were angry and frustrated certainly, but they were also open, warm and passionate about building a better community. Overwhelmingly though, they felt powerless. Person after person told us how they felt politics wasn’t for them, that it was corrupt and money-driven, and that they had long given up believing that their voice or their opinions mattered and could effect change. But to our astonishment, on a rainy Thursday evening at a community centre the ‘’wrong side” of the A13, over 60 people turned up and then thankfully, wouldn’t shut up. There were members of political parties left and right, community organisers and local councillors, but most of the people who came along where not involved in politics at all. Some had lived in the borough their whole lives, others just a few weeks, but all were keen to share thoughts and concerns over a slice of pizza. It wasn’t a scientific sample, but it felt reflective of the local community.

Instead of a panel of ‘experts’ from the Westminster bubble – they got a few introductory comments about Compass and what we were doing, some words from two local councilors (and a few heartfelt heckles), and then we were off.  Sitting in small groups of about eight people, the floor was theirs – and it wasn’t easy. We had strong disagreement about how the meeting should be run – indeed whether it should be run at all, and in some groups the councillors as representatives of local authority felt the full force of the discontent in the room. But the discussions rolled on for over an hour; passionately, angrily, hopefully and compassionately. This was politics in the raw and it was a privilege to witness it.

As an observer put simply, within just a few minutes of the discussion taking off it was clear that the world simply doesn’t work for many of these people. The big issues in Barking were the very basics of life; homes, money and health. As a recent BBC documentary highlighted, as is the case in too many London boroughs, rents are way too high and wages are way too low. As many of the attendees remarked, even ‘affordable’ schemes are far out of reach, and the churn in communities as people move in and out disturbs everyone and makes building community impossible. And as Peter Walker noted in The Guardian, residents of Barking and Dagenham now face a fifty year wait for a council house. Alongside the housing issues, those in the room discussed cuts to health services, education and libraries; anti-social behaviour, homelessness and a lack of social housing; and how the rapid increase in population for various reasons had lead to alienation, displacement and anger.

Of course of all of these issues are not specific to Barking and Dagenham – on the contrary, we could have held the same meeting in hundreds of towns and cities across the UK and heard the same things. And like so many others, the vast majority of people in the room that night had voted Brexit. But what we learnt from Barking was what we should all have known all along. The causes of the Brexit vote cannot be reduced to divisive and condescending issues of racism, xenophobia or a lack of education, as is so often attempted. The first question we asked the residents of Barking was what was good about the area, and needed to be preserved. And the overwhelming response was its diversity, multiculturalism and community cohesion. This was not a group of people who were racist or anti-immigration, and the respect and appreciation for the diversity of the borough cannot be overstated. But that doesn’t mean that distributional problems weren’t apparent. When there aren’t enough homes or hospital beds to go around, what do you say to someone who has lived in a place all their lives, as have their parents, when someone new turns up and gets in ahead of them? When the local school has their budget cut and has to choose between hiring a new Maths teacher or a multi-lingual teaching assistant, what should the priority be? And when people become angry, disenfranchised and hopeless, where should they turn to find change?

Of course, these questions do not have simple answers. This is the chewy stuff of real life politics in a world dominated for three decades by a politics that puts profit before people. There have always been at least temporary cultural tensions as flows of people move in and out of areas, but they are so much harder to manage without the structures and resources that enable communities to live with them. As we sat and listened, it was impossible not to think how a universal basic income might help offer them real security and therefore freedom; how quantitative easing fed directly into public house building could provide them with decent and affordable homes; and how proportional representation would shake up local government and its accountability and therefore performance.

So what next? Well firstly, we need to keep listening. Compass are going to keep working with residents in Barking to address some of the local issues, and try and replicate the meeting in other places – to hear what people in South Wales, Stoke on Trent, Sunderland and beyond have to say. We will keep thinking and talking about how a progressive alliance of parties and people can bring about a more equal, democratic and sustainable world. But what is also vital to pay attention to is that when we asked Barking to talk to us about politics, we learned that in some cases, Brexit doesn’t always mean Brexit. There is no such thing as the 48% vs the 52, there are only people with problems whose voices aren’t being heard. These are not dyed in the wool UKIP voters or hardcore Greens or Corbynites on a mission; there are just people who want a better life of decent pay, low rents nice homes and a hospital nearby, and want to be part of making it happen. The question of which of the parties will be standing with these people when it does, is yet to be answered.

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The convincing victory of Jeremy Corbyn in the rerun of the Labour party’s leadership election is only the beginning. There are still nearly four years to go before the next general election. Most media ‘experts’ reckon that a Corbyn-led Labour party has no more than a snowball’s chance in a warming globe of winning that election, whenever it comes.

But is that the case? Remember the American election slogan: “it’s the economy, stupid”. What will the state of the British economy be in over the next two or three years? Will it be motoring along at a pace with full employment and improved real incomes, more homes and cheap transport and communications, good pensions and thriving education and health services – and with new exciting trading arrangements outside the EU? Or is it going to plunge into another recession with rising unemployment, falling incomes and even more austerity?

I think the likelihood of the latter is pretty high. Why? It is not specifically to do with the UK economy. It is more to do with the momentum of the global economy. In my new book, I argue that the world’s major capitalist economies are in a Long Depression, the like of which has not been seen since the last one, the Great Depression of the 1930s.

The Great Recession of 2008-9 was the biggest economic slump since the 1930s.  As a result, all the major economies in the world saw a sharp decline in their national income. But the difference compared to other crises as in the 1970s, 1980s and 1990s was that the recovery from the Great Recession has been incredibly weak. It is the weakest economic recovery since the 1930s. Most economies have hardly recovered to the level of national output per person that they reached in 2007. And the majority of people have taken a huge pounding. Two-thirds of households in the top 25 so-called advanced economies have experienced flat or falling real incomes from work. That’s 580m people.

Over the past 25 years, inequality in income and wealth globally has reached a level that we have not seen for probably 150 years. And the world economy faces some key challenges over the next 20 years. The first is climate change and global warming, which is a serious problem that governments are not doing anything serious about. This really threatens the future of the human race and the planet, unless something is done.  And there is also the slowdown in global productivity growth, revealing the failure to expand production that will compensate for the slowdown in global population growth.

More immediate, the major economies are facing the prospect of a new recession or slump. In my book, I show that the Great Recession was a result of a collapse of the banking system that had overreached itself by investing in ‘fictitious capital’ (mortgages and fancy financial ‘derivatives’) that bore no relation to the relatively poor profitability and investment of the ‘real’ economy.

This fake boom came crashing down in 2008-9. But despite the bailing out of the banks by governments (at the expense of taxpayers and through taking on of huge debt – to the banks!), the profitability of capital in the major economies remains near post-war lows. And US corporate debt is back at levels consistent with a new recession, according to Deutsche Bank economists.

So the corporate sector is still not investing at anything like the rate necessary to restore economic growth, full employment and rising real incomes. Business investment in the UK has only just got back to the level of 2007 and investment to GDP is near a 50-year low.

Profits call the tune under capitalism. And now corporate profits are heading down in the major economies. This is a forward indicator of another investment slump and a new recession in the next year or so.

In a new recession, it won’t be enough to oppose ‘austerity’ or to ‘rewrite the rules of our economy’ (i.e. regulate capitalism). There must be a radical alternative presented to the capitalist mode of production. So far, the main planks of the Corbyn’s Labour have been: ending the tax gap (the difference between what corporations should pay and do pay); providing cheap money for investment through what is called a ‘People’s QE’; and a National Investment Bank for funding infrastructure projects.

These policies are no more than the mainstream answers that are increasingly coming from various Keynesian economists. Sure, they would help to boost public investment as private investment dives in any new recession. But in most economies, corporate investment is 8-10 times larger than public investment as a share of GDP. It won’t be enough to avoid or reverse a slump by just adding, say, 1% of GDP in public investment, funded from a people’s bank. And ironically, closing the ‘tax gap’ would only lower further the profitability of business investment in a slump and so lead to an even larger ‘investment strike’ by the capitalist sector.

And just setting up a National Investment Bank cannot turn the UK’s credit institutions into vehicles for funding faster investment and employment.  How can we end the grotesque salaries and bonuses paid to top bankers to speculate without proper public control and ownership of the banks? There is a crying need to take over the big five UK banks and use their financial resources in a national plan for investment and growth.

The failure of business investment in this Long Depression and the prospects of a new economic slump mean that any effective economic policy should include as one of its main planks the public ownership of strategic industries, or what used to be called in Old Labour parlance, the ‘commanding heights’ of the economy. This would the lay the basis of a plan for sustained economic growth through higher investment in jobs and technology to raise productivity and greater equality.

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Since 2008, Britain has seen a surge in alternative economic thinking. From community finance to cooperatives, public ownership to tax avoidance; land taxes to local currencies, GDP to the creation of money; basic income to fossil fuel divestment, longstanding wisdom about how best to organise our economy is being challenged.

This explosion of new ideas – or, perhaps more often, the rediscovering of old ones – should come as no surprise. The credit crunch delivered a brutal blow to Westminster’s economic strategy, yet little has been done to change it.

Real terms wages have fallen by more than 10%. The two biggest countries in the UK are heavily reliant on finance and fossil fuels: industries that are far from sustainable. Britain’s other countries are the poorest in Northern Europe. Our trade deficit – chronic since the early 1980s – has only grown. Personal debt levels are booming. The housing vortex is sucking up ever higher portions of people’s wages, and steering investment away from productive industries: by some measures, net investment our economic future fell to zero in 2014.

Britain’s biodiversity is in free-fall and our depleted soils are estimated to only have 98 harvests left in them. The gender pay gap remains stubbornly wide at around 20%, and young people of colour have faced a 50% increase in unemployment. Meanwhile, the richest 10% of households hold 45% of all our wealth, whilst the poorest 50% own just 8.7%. The average FTSE100 CEO now earns 123 times the average salary, having seen a pay rise of 45% since 2010.

Our population is ageing and we seem to have little idea how future generations will secure pensions. Employment is increasingly precarious. Over half of the people in Britain say that their stress levels are rising, and whole swathes of the country have been abandoned to a brutal strategy of deindustrialization. Automation is now eating into skilled jobs in the way that, over the last century, it destroyed unskilled work.

This, of course, is before we assess the international situation: our dependence on low-wage and heavily exploited workers in the global south to produce the cheap goods we all consume; the extent to which Britain’s economy is propped up by stripping assets accrued through decades of imperial plunder; the new questions bound up with Brexit and the accelerating climate crisis.

This is the context in which we at openDemocracyUK are launching our new series: New Thinking For the British Economy. Over the next two years, we will host a vigorous discussion about how to mend the UK’s troubled economy.

To kick off, we’re collecting together a series of proposals – competing or complementary – for policies to help get us out of this mess. After this, we’ll facilitate discussion about these ideas: give them space to flourish or flounder, to be honed or cut down. And gradually, we hope that specific proposals will intertwine into plans, plans will become strategies, and strategies will find their way into manifestos. Because whilst individual ideas matter, no one proposal is a sufficient solution to the problems we face.

We want to hear your ideas about what the UK should do to transform the economy – and how we can do it. Join the conversation: send us your proposals, your policy ideas, your messages, your tweets and your critiques. We can’t leave the conversation about Britain’s economy to the people who got us into this mess in the first place.

Find us on Facebook and on Twitter

Or email us – adam.ramsay@opendemocracy.net  or  eleanor.penny@opendemocracy.net

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