I was chatting to Paola on Anna’s hen do as we walked along the beach at Lyme Regis. She was telling a really nice story of how various teams at her work had dealt with the news that one person in their team would have to be made redundant. In several teams, everyone in them decided to give up one day a week’s work and pay so that they could keep on the person who was going to be made redundant.
It made me think of the Sustainable Development Commission’s magnum opus, Prosperity Without Growth, one of the most inspiring documents I’ve read in recent months. This report confronts head on in readable and measured prose the fact that our economies are structurally reliant on endless growth for stability, and yet this is a ridiculous notion in an ecologically finite world.
The truth is that there is as yet no credible, socially just, ecologically-sustainable scenario of continually growing incomes for a world of nine billion people. In this context, simplistic assumptions that capitalism’s propensity for efficiency will allow us to stabilise the climate or protect against resource scarcity are nothing short of delusional.
One of the most interesting chapters looks at potential outlines of a macroeconomies with no growth. One of the most damaging consequences of reduced growth is normally rising unemployment, which has knock on effects on consumption causing further unemployment. In steady state economy models it seems you can avoid damaging unemployment by increasing public investment and sharing the work out more equally across the workforce, e.g. through shorter working weeks, flexitime or solutions like a basic citizen’s wage.
I was struck that many companies are now shifting to four-day working weeks in response to the recession, spontaneously doing what our government ought to be directing to reduce unemployment. And I was just reading in New Scientist that this has happened before. According to Rex Facer at Brigham Young University in Utah, it was the crash of 1929 that led to the five-day week. “Before that it was common to work six-day weeks with 12 to 14-hour days. When the Great Depression hit, the idea was to share work around to get more people into employment.”
My last word on the snow, I promise! I just enjoyed this little post by Lindsay Mackie over at New Economics Foundation.
I mentioned in an earlier post how the snow made us all go local, grabbing nearby friends and enjoying the moment. Lindsay points out that the snow is also a good cheerful trial run for peak oil climate change economics.
They couldn’t do anything else. It was most pronounced in the rural areas but it happened in the towns too. The snow brought with it the mantras of new economics – sharing of skills, time banking, local reliance, small scale acts of collaboration – to make the whole continue to function. … People, in spending locally, re-discovered gossip, mutual reliance and environmental sanity.
To the Royal Opera House last night for Puccini’s utterly classic romance La Bohème.
I was feeling quite swept away with it all, the great tunes, the soaring romance, the swelling crescendos of glorious song, helped along by a few bottles of white wine which we all ploughed through in the intervals. This is proper romantic poverty: bohemian artists and poets, freezing in their Parisian rooftop garrets, living and loving with flair and passion. Watching La Bohème you actually quite fancy being really poor.
When Mimi sings, you want to live in the garret with her…
There is a little white room
I look upon the roofs and the sky.
But when the thaw comes
The first sunshine is mine
The first kiss of April is mine!
Apart from the cold and consumption, material poverty in La Bohème doesn’t seem too bad!
I think this reflects one of the interesting things about poverty, which is that we get very hung up on the material side, defining it as a lack of money, food, shelter, time. But surely its roots lie deeper: poverty is a lack of status relative to others in your society, created fundamentally by inequality. It’s a feeling of powerlessness, a lack of aspiration, pride and confidence.
This is important because in the UK, where most houses can be kept warm and most families can own a television, and no one’s in danger of starving, though many are eating very very unhealthily, there is still poverty. There’s still the persistent 20% at the bottom, an underclass who are completely marginalised from the political process, blighted by long term unemployment and a tragic poverty of ambition.
Two Indian community workers who visited poor areas of the UK in the 1990s observed that although people appeared to be generally much wealthier than in India, poor people seemed much more stigmatised and demoralised, they often seemed to have “a complete lack of hope”.
A WHO report earlier this year got into the news when it showed that a boy born in the deprived Glasgow suburb of Calton is actually likely to have a lower life expectancy than a boy born in India as well as living on average for 28 years less than a boy born in the village of Lenzie six miles from Glasgow city centre.
We often assume that these differences in health outcomes can be put down to the unhealthy lifestyles associated with poverty in the UK, yet there’s more to it than booze, fags and deep fried junk food. There’s a powerful body of evidence proving that inequality itself is bad for you. The lower status of poverty actually translates into measurable health outcomes and lifestyle choices account for only a modest of them. As the WHO report says: “Social injustice is killing people on a grand scale.”
Bad health is caused by the unequal distribution of power, income, goods, and services. In the US, black people are materially rich compared to most other countries, but are very poor by US standards, living in conditions of sharp inequality. People from Lebanon, Cuba, Libya, Tunisia and Jamaica all have greater life expectancies than the US black population, despite being materially poorer. Apparently if black mortality rates were the same as those for white people in the US, nearly 900,000 deaths would have been averted during the 1990s, a period when 170,000 deaths were saved by medical advances.
The inequality that is the root of poverty is the result of “unfair economic arrangements, and bad politics”, in the words of the WHO report. Once again it’s the cult of neoliberalism and economic growth at all costs that shackles minds and wastes lives: cast it off, baby!
Sir, Your editorial “In praise of free markets†(September 27/28) conflates regulation of trade markets with that of financial markets.
This is a flawed analysis, one at the core of most economic orthodoxy – that money, like land, oil, soya beans, diamonds or gold, is a commodity, and therefore that trade and markets in money are no different from markets in, say, soya beans.
They are not. Money, capital, interest rates are all social constructs. We do not dig capital out of the ground and it does not grow on trees. Interest rates are set by committees of men. And so, unlike oil or soya beans, “there are no intrinsic reasons for the scarcity of capitalâ€, as Keynes argued in the General Theory.
Astonishingly the private finance sector has succeeded, against all odds, in creating a shortage of capital and forcing up the London interbank offered rate on this scarce capital.
The second extraordinary achievement of the private finance sector is the creation of debts vast as space, debts that clearly will never be paid, and that are bankrupting the finance sector.
The consequences of this incompetence are and will be immense. Pensions, homes and jobs will be lost, and there will be social unrest.
For these reasons orthodox economists and their flawed monetary theory must be abandoned, just as they were after the last great financial crisis of the 1930s.
John Maynard Keynes’ cool, rational voice on monetary theory and monetary policy must once again be heeded.
Ann Pettifor, London NW1, UK
And Bird and Fortune explain, back in 2007, the whole banking crisis in eight minutes of prescient comedy:
Dropped in on Kate B and DP in the Pineapple pub earlier. Lovely to see Kate again, she’s all tanned from Washington. DP was on lively good form.
We talked some politics. Kate observed that even though our solid post-Thatcher world everyone my age has always known, with free market capitalism providing the answers to everything, is unravelling around us, there are no great left wing ideas stepping forwards to take advantage of the moment. Just governments and regulators paralysed with fear, taking action on one short term crisis after the next, hoping to prop up the unsustainable system that has got us into this mess in the first place. Great to see a few concessions being demanded by Darling and Brown for nationalising the banks, but they should be going further. It’s not as if they lack the mandate.
As Milton Friedman wrote in 1982:
Only a crisis – actual or perceived – produces real change. When that crisis occurs, the actions that are taken depend on the ideas that are lying around.
Crises are gaps in politics as usual, and this should be our generation’s chance to take bold steps towards a post-oil low-carbon sustainable future, with corporations and banks are the servants of democracy rather than its masters. It’s a shame the Labour Party seems to be incapable of being such a vehicle for change.
Here’s an interesting debate. The Mohawk Nation of Akwesasne have launched 1st Nation, an ethically-sourced cigarette for the UK market. They contacted various Fairtrade labelling organisations in Italy, Germany, Britain and the US to talk about getting the Fairtrade Mark but thus far they don’t want much to do with it.
1st Nation said that although the Fairtrade organisations expressed a desire to help impoverished tobacco farmers, “without exception they felt that fair trade tobacco was too politically sensitive a crop for their organisation to engage with”.
Amusing story in the Metro here, and a good People & Planet post on it here. The Metro story reminds us that tobacco has a different traditional reputation as a sacred plant, rather than a dirty big business controlled health risk. Much like cannabis or coca, both “wonder plants” that have been revered for thousands of years before being demonised relatively recently in human history.
It’s interesting for me because I am only a few steps away from 1st Nation. We are pretty much marketing Fairtrade chocolate to children. Our careful argument is of course that we don’t want them to eat yet more Fairtrade chocolate and spiral into craven obsesity: we want them to buy a Dubble bar instead of a Dairy Milk or Nestle bar. We’re about taking market share away from unethical business!
In a similar way, 1st Nation say: “It is not our intention to attract new smokers to the market, but to offer existing smokers of competitor brands an alternative tobacco product that provides real economic advantage to the tobacco growers and processors.”