Confidence. Global markets rocket or plummet by the perception of it, apparently. But what can we bank on as we look to the future? Because something in global economics seems volatile to say the least – a lot of ordinary jobbing humans don’t exactly love their jobs. And don’t exactly have their jobs. So just what visions of future value money payment wealth success stuff should we be trying to imagine for coming generations?
LISTEN TO UNSEE THE FUTURE: EP3 – Economy:
My brother Tim is not really a full citizen of anywhere. And he’s not really my brother, either. He’s just always somehow felt like it, despite the fact that our experiences of life on Earth growing up were culturally rather different. He has three passports and a mid-Atlantic accent and a yearning for the desert. I grew up in one culturally ambiguous place and have all but stayed there, while popping out to breathe in foreign airs wherever possible. He’s an overgrown hippy with a poet’s edge. I’m a fair-weather spoken word chapster with an over-pronounced commitment to lifestyle. We’re both bleeding-heart snowflakes and musical adventurers. And he, perhaps more than anyone I know, in his searchings, has done more to formatively encourage me and provoke my view of the world than most.
A man of energy and compassion, frustrations and deep spirituality. A bloke who left America to come ‘home’ to his England at the end of his teens, only to find his funny accent made most English people throw casually snarky racism at him wherever he went. You know, the sort of racism that’s fine because it’s to Americans.
He’s a man who strives to live out a conviction that love resides at the centre of the universe, and who has pursued a life of art in songwriting, cooking, longboarding, surfing, laughing, painting, making, gardening, praying and making others feel valued. And so naturally he’s broke.
If there was a place Tim would have fitted in perfectly, it was many of the nights at the Winchester. Supposedly the very pub inspiring the name of the famous place to lay low until it all blows over, the Winchy was, for nearly ten years, one of the absolute most creative venues in Bournemouth. It’s Freeway Poets every month was the kind of coolest but friendliest spoken word nights you’d find anywhere – it was like a pop-up, one-night festival, with vegan hot pot and organic tea and African drumming and old sofas and hand-made decor bespoke to each month’s theme, inviting comments and sharings and anyone to try the open mic. It was creative and human to a fault. So it’s odd my brother Tim never went. But both of them know the pain of the same thing – being richly valued by all the people who know them in all the ways that matter except economics.
The Winchester shut down. And proprietors Mark and Lou were even more bereft than their customers. After working so incredibly hard, their many inclusive, creative nights, significantly helping put the heart into the Triangle area of the town, just couldn’t make a sensible enough income to keep the historic building from falling to bits. And so the landlord called it. I understand with a heavy heart, but he was watching his own investment crumble.
Tim too, has not exactly been sitting around. And he too, will not be paying off the mortgage on a smart three-story town house any time soon. And yet he is loved like a sentinel of all that is good in us by his friends. Like the Winchy. So why does what we appear to value as people not line up with what we appear to value as consumers? And is this likely to become a bit of an actual bugger to global money stuff.
Is it already, in fact?
Another experience of Tim and his wife Vicky has painted a picture in my mind. The story of their finally itching the scratch to go back to the US and start a new chapter of life. Escape rainy racist Britain and get some desert sun. Grow cacti outside and feel the call of the ancient Earth. An experience that became so miserable for them, rainy, racist, pre-Brexit Britain began to look a lot more appealing.
RUSTBELT AND BRACES
Ever since we did concept albums together when we first met, when I was 18, Tim has loved the culture of the desert. So he and Vicky looked into a possible life in Phoenix, Arizona. Not impossibly far in American terms from the Californian coast, but far enough to be practical for house prices. From over here, jobs appeared to be around over there and it all seemed to add up for them. The kids were now independent here in the UK and the two of them were ready to make a fresh start in the sunshine. We were gutted to lose them, but happy for the sense of adventure they had. And as ever, we’d have a trip or two out of it ourselves one day. Buen viaje, amigos.
Two things kind of happened slowly. Although, looking back, not all that slowly. One, life in Phoenix didn’t work out quite as planned. Jobs turned out to be harder to secure than hoped, for one thing. But while there, the two of them observed how an influx of people from the coast was pushing rents and property prices up, while also creating a small army of people living on the streets. They felt a strange, low level awareness of daily grind all around them. Of something not quite working somewhere. In the end, personally, they felt unable to find the opportunity for them in being there. It was, as Tim put it later, “a formative, true desert experience”.
Two, they both felt increasingly that they should spend some time with Tim’s family in North Carolina. A visit became a relocation, from the hot dry air of the south west to the lush woods of the south east. And what they saw around them there has stayed with me, from their tellings of it. Because what they observed was simply a generation of young countryside Americans that seem lost. Surrounded by a sense of rusting industry and lost opportunities.
North Carolina is, I guess, an average US state, to put it over simply. It’s not lagging or leading in dramatic terms when its sectors are put together; its economy has been growing for eight years and unemployment is reasonably low, though that growth has been slow and state productivity overall doesn’t appear to be really encouraging it, according to summaries such as this North Carolina State University report. It’s tenth in GDP for the whole of the US and has some fast growing sectors, most noteably it would seem, professional and business services, information, leisure and food and also aerospace – the Wright Brothers adorn many state commemorations, of course. But the reality on the ground as observed by Tim and Vicky, and probably unsurprisingly to you, is really the torturously drawn-out unfolding reality of country vs metro – the bar graphs of growth predominantly stand in the business districts of town. Where all the cranes usually are, clustered in just one locale, building ever bigger bar graphs for everyone else to see.
Because more than half of the state’s 100 counties have, it is said, reported population decline since 2010 because of a stagnant rural economy. And whilst the overall jobs record for NC sounds pretty good, as Patrick McHugh says for NC Policy Watch, the point is that having a job these days far from guarantees you an escape from poverty. “Almost one-third of workers in North Carolina’s smaller cities earn poverty wages” he says.
“North Carolina has seen steady employment growth for several years, but not nearly enough to satisfy the need” he asserts. “Data tracked by the NC Department of Commerce show that there are more people looking for work than jobs available in 88 of North Carolina’s 100 counties.”
Too few jobs and too-often meagre wages, even as the state as a whole is growing its GDP. Sound familiar? As particular as any one state of America’s economic cultural particulars always are, the headline is one echoed around the world in different ways. Far away and close to home.
What this looked like to Tim and Vicky was young people with little view of the future or of the outside world. Quietly miserable kids in crappy McJobs. Low engagement with education and training and no idea of any other way of doing things. The big promises of industry and opportunity rusting and abandoned in symbolic details lying all around their everyday lives. Tim taught them about Indian cooking and half frightened them with flavour.
“It was not the America I last saw in the early 90s” he simply said to me quietly. “The land of opportunity is gone. It’s just gone for millions of good folk. It’s a depressing and divided place out there, and it broke my heart to suddenly see it.”
Local politics to NC has kept things in a Republican mode, with ‘tax cuts’ the long-promoted sell to voters in the state. But as McHugh concludes passionately: “If tax cuts were the answer, we wouldn’t see entire communities cut off from economic opportunity, or parents forced to choose which of their children go hungry, or formerly middle-class families sliding into poverty. These are the stains on the economic fabric of our state…”
Was this the economic dream of post-war America and Europe? What happened to never having had it so good?
Harold Macmillan’s famous quote in 1957 to the British people wasn’t essentially wrong. Two world wars had bought freedom from fascism for Europe (mostly) and by extension almost everyone else, but at a huge cost. It wasn’t simply the economies that needed reworking after all the productivity and skills of warring nations had been channeled into munitions and military industry, while a huge chunk of their tax bases switched to being dependents on the state and never returned to work, or home, after hostilities ended. It was the cultural outlook that needed encouraging. Getting people’s hopes back, and the wheels of productivity nicely oiled. And that they appeared to have done.
“You will see a state of prosperity such as we have never had in my lifetime – nor indeed in the history of this country” he said, buoyantly. “Indeed let us be frank about it – most of our people have never had it so good.”
Post-war Europe and America was a time of famous growth in expectation from ordinary working people. Surely one of your favourite incisive political terms to this day. Indeed, Macmillan presided over a manufacturing and economic boom in the UK, with comparatively rocketing standards of living, coupled with new state certainties such as the NHS and the dawning of whole new views of the universe. Britain’s pioneering contributions to the development of nuclear power and the completion of Jodrell Bank’s (now) Lovell radio telescope just months after Macmillan’s famous quote must have made mid century Britons feel giddy with cutting edge progress, burning their old ration books and dumping all their old crap with the rag’n’bone man to go shopping for the modern coffee tables they’d been promised at the Festival of Britain at the start of the decade.
People bought refridgerators. And cars. And property. And tellies, to watch the rest of the world and worlds beyond that in their living rooms. After half a century of warring over new economic ideologies, most of us decided to say screw it, and just go shopping. The ‘west’ nervously turned its back on the fearsome new iron curtain that decended brutally and mystifyingly across the continent, and turned a blind eye to Spain’s new, less invady form of fascism still just behind Bearitz, and we all began to listen to American rock and roll. As historian Dominic Sandbrook put it, Britain began to change its colonial industry from actual industry to culture, slowly giving up its holds on foreign territories as international accord evolved and a combination of dawning embarrassment at owning someone else’s country, and the big headache and cost of running someone else’s country, all began to ease Britain’s grip on hard global power. We decided to go soft. And go to Spain anyway, on package tours to the sun.
But something underpinned this positive economic outlook. Post-war workings under the bonnet of the globalising machine. An agreement that set in motion a whole raft of things between countries, as the war was heading towards its end. All set up in the pretty Washington town of Bretton Woods, in 1944.
Roosevelt and Churchill felt the war was in large part a struggle for economic supremicies. So rebuilding the world after the conflict would require, they reasoned, some level-headed co-operation to create the stable conditions of peacetime that would fan the flames of growth, not general killing and bombing and infrastructure demolishing. The Bretton Woods agreement was signed by almost all of some 44 country deligates who attended the conference, called while bullets were still clanging off tank lids in Europe and Hitler was still vein-poppingly raging about something or other on Netflix or an internet meme in English subtitles in his Berlin bunker. And in it, the parties agreed to co-operate financially like never quite before.
“”The economic health of every country is a proper matter of concern to all its neighbours, near and distant” said Frank himself.
What they agreed was to set up a shared exchange rate mechanism, to try to minimise slumps in currency values between trading partners, as they differently each tried to spend a fortune rebuilding after war. Effectively building on the ideas of John Maynard Keynes who advocated deficit spending – governments reaching into their pockets in tough financial times, such as great depressions and world wars, to put the unemployed to work and keep the economy moving. Currencies were pegged to the USDollar, which was itself pegged to the value of gold. To oversee the enforcing of such fixed exchange rates, the Bretton Woods Conference ratified the setting up and empowering of the International Monetery Fund. And the seeds of the World Bank were sown in the setting up of the International Bank for Reconstruction and Development, which could make longer-term loans “facilitating the investment of capital for productive purposes, including the restoration of economies destroyed or disrupted by war [and] the reconversion of productive facilities to peacetime needs”. Between them, these two new institutions could loan struggling countries enough liquidation to get them out of trouble and keep them practically in the trading game, so keeping the whole block of nations afloat together. With everyone’s currencies not dropping through the floor, the pound, the frank, the deutschmark, the peso in everyone’s pocket could afford a coffee every morning. And rather more. The twenty years after the war were an explosion of growth as Europe rebuilt and America found its greatest post-depression, post-war stride. It’s golden age. And so the world appeared to tick over nicely on this friendly, co-operative Keynesian economics.
Which all worked really well until one of the countries felt it suddenly wasn’t benefiting the most from this arrangement and decided unilaterrally to leave the Euro – I MEAN – the Bretton Woods agreement. And, bit of a bugger, it was the founding member, America.
That’s when all our present hellmouth economic lostness began. Hooray!
Except it wasn’t. But it was the point at which our present economic world was effectively born. Different, actually, as it surely is from those post war economies we still imagine we’re essentially running. And it brought home to roost, I would suggest, the tragic crapness of the whole planet’s system of apparently getting rich.
SKYLON’S THE LIMIT
Interesting then that the great cultural clarion call to a hopeful tomorrow, the Festival of Britain, divided the politics of the nation very fast indeed. It may have been a clean, inspiring view of a Britain well clear of the murky clouds of war and tradition, and it may have been spectacularly well recieved by post-war Britons. But it was a Labour idea, and as such was seen by the right in the country as the thin end of the wedge of socialism. So much so, that when Churchill beat Atlee that autumn to become Conservative PM once again, one of his first acts in power was to have the beautiful site of the festival on the south bank cleared. If only the Skylon had gone onto Ebay today.
Interesting to consider that progress was always to be kept quietly in a harness by the UK’s ‘safe pair of hands’ party, the Conservatives. Has the most economy-literate political party in the UK actually never been a truly unguarded fan of entrepreneurial mobility? If the Tories aren’t, then who is? Because, as the Wikipedia article on the festival says, among many right-leaning commentators the whole idea and its supporters were to be mocked in mistrust. The playwrite Michael Frayn characterised it as an enterprise of “the radical middle-classes, the do-gooders; the readers of the News Chronicle, the Guardian, and the Observer; the signers of petitions; the backbone of the BBC” whom he called “Herbivores”.
Sixty five years on, plus ça change, mate?
Yet the things that underpinned the world that the Baby Boomers, and Generations X and Y grew up in have changed. Possibly fundamentally. It’s not the same machine at all under your feet now. Outside your box. It’s just, most of us don’t think of it this way.
Is the challenge we’re facing today that our economic system is reaching its limits? Or at least, that more of us ordinary saps are beginning to see through the threadbare tarp it’s always thrown over its problems. Its costs.
If you’re a devout Freemarketarian, swearing on your family edition of Smith’s Wealth of Nations, you’ll say not to be so silly. And you’re right, global economics is too complicated and grown-up sounding for me to understand. But you’ve also just illustrated that, whatever else it is, economics is a belief system. And many are losing their faith.
The UN’s intro to its Global Goal for economics, which it calls Decent Work And Economic Growth, states: “Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.” Which suggests first, that there is a problem with much of our current work. It presumably isn’t ‘decent’. But if your Reality Sensors just gave a little proximity beep and you are about to remind me that duh! ’twas ever thus in the world, then I wonder. If industrialised capitalism is so great, why do we still take as read that working life for the vast numbers of us is most likely to be basically crap?
What is a decent job, anyway? One fit for a human.
The UN sagely describes their aims for the planet in this regard in very grown-upish economic language. It’s sensible sounding stuff, essentially, wanting to promote start-ups and entrepreneurism, alongside sustainability of resources, human and planetary. It does all hinge on one idea, though. The old idea. The one all our values are pegged to.
Growth is good, of course. I mean, it just sounds good, doesn’t it. And out of growth of business comes increased reach, resources, influence, opportunity, jobs, rewards. It’s basic to our brains – work harder, get more. …But personally get more of what, exactly? Money? Or responsibility. Influence? Or noteriety. Whatever it is we’re implicitly promised, we’ve grown so accustomed to wanting it, we can’t picture a different goal. But it might be time to really think outside the box.
Stuart Jeffries refers to the Marxist writer György Lukács, who apparently said words to the effect of Capitalism is still in business because people don’t know their real needs. Which is just the sort of high-minded lefty intellectualism you might expect from someone who had a ‘salon’ in the first world war years, at which bright minds discussed philiosphy and sponsored great artistic works, so reminding me that I really must look more into fashioning an Edwardian socialist lifestyle. But, condescending as it totally is, it feels like there’s something in it. It’s not like humans aren’t known for their cognitive disonnance every now and then. I don’t like stabbing myself in the face with my lunch fork. Don’t mind me while I stab myself in the face with my lunch fork, will you…
The leveling point is that it’s hard to imagine another set of options to the cultural ones we see around us every day. Much as we are born dreamers, humans tend to imagine dreams are just fantasy, content to cuddle them in the night between shifts. In his review of David Harvey’s The madness of economic reason, Jeffries refers to Marx’s own assertion of alienation – the idea that under captitalsim >spitoons< the worker is alienated from the thing she or he makes and the surplus value, or growth, she or he makes. It goes to the investing capitalist. Which sounds economically fair but somehow, humanly, really not, the more you dwell on it in a pre-revolutionary coffee shop. Like Costa. What he pulls out is the idea that today, this is going beyond a disgruntled working class:
“These days, it’s not just the have-nots who are revolting, but the haves, at least in countries such as Brazil and Turkey where the urban, educated middle classes reject the regimes from which they have materially benefited. What they yearn for, Harvey suggests, is not being bought off with material goods, not the compensatory consumerism that “limits and imprisons rather than liberates the horizons of personal fulfilment” but… dignity.”
Interesting. Why wouldn’t owning your own home and driving a decent car and going on the odd foreign holiday give you dignity? The dignity of some choices in your life. What is this disgruntlement? Why did so many Britons vote to ‘overthrow’ the post war peace pact of the European Union, when the technological and social freedoms of the continent have made life so much easier and safer for so many? What will be gained by leaving and sticking two fingers up to Fritz? What is the source of the discontentment?
Green Party MP Caroline Lucus (“another bloody Marxist”) is likely to be someone talking about sustainability. Her point tends to be that the diminishing resources we keep burning to keep industry wheels turning, and the material damage it is accumulating across the planet’s ecosystem – the thing that keeps us alive in all its complexity – is an economic concern, not an ‘externality’ as economists have awkwardly often put it. What we need, she suggests, is a new way of seeing what is good for us. What our human needs really are.
“We need a new set of indicators that better reflect genuine wellbeing. For a start I would suggest we should aim to share out paid work more widely and evenly, and increase the amount of positive leisure time people have, giving them more choice about time with their communities, friends and family. The Green party’s calls for a shorter working week are often attacked as being anti-growth, but that misses the point of policymaking that should surely be to serve people rather than worship at the altar of GDP.”
Worship. What do we each really believe in? Ascribe habitual ritual to. Where your treasure is, there is your heart, as someone once rather said.
As Zoe Williams illustrates, though, the answer isn’t to recycle the capitalist dream that we should all really try a little harder to over come what life deals us and make good. Get more socially mobile. Encouraging social mobility is not the same thing, she suggests, as encouraging anti poverty measures. There is a collective moral dimension to our economics:
“The idea that a smart, disadvantaged kid from Hull ought to be able to become a high court judge is not remotely similar to the idea that the same kid should live in a warm enough house with three meals a day, regardless of how smart he is. To care that the brightest and best should live in a society where their qualities are rewarded is one thing; creating decent conditions for the dimmest and the worst is altogether different.”
It may simply be that our age is beginning to feel the increasing obviousness of what Naomi Kline refers to as ‘sacrifice zones’. The trends for poverty in western countries are bad. The division between who has and who hasn’t a hope is widening. And for some reason, this makes a lot of us uncomfortable. Even a little upset.
But does it… y’know. ..Matter economically?
Well, duh. If productivty matters, you might be wanting to look at the state of your workforce’s wellbeing. And it’s not pretty, is it? Labour activist Owen Jones is an advocate of the four-day working week – a thing long ‘ridiculed’ by ‘business’ people as the thing that tanked the British economy famously in the 70s by mere invocation, as the demands of the unions forced Margaret Thatcher to burn everything north of Leicester and set the hounds loose on ordinary working people. But it might be an economy-boosting idea, he suggests.
“Many Britons work too much. It’s not just the 37.5 hours a week clocked up on average by full-time workers; it’s the unpaid overtime too. According to the TUC, workers put in 2.1bn unpaid hours last year – that’s an astonishing £33.6bn of free labour.” An unbudgeted donation from you and me. Because we love work so much.
The cost, he goes on, is emotional. An epidemic of mental unwellness. Which translates into lower productivity and higher medical bills. Well, I mean, you know this full well. How is your better life balance coming along? And what is it worth to you?
Economics has often I think been reacted to like a bit of a cult. A way to peek behind the wizard’s curtain and run your fingers over Mystic Meg’s glass ball. Because it sounds so graphy and technical and sort of engineery sciencey, looking for patterns in behavious and so on. And just because I can’t understand it doesn’t mean it is all bunkum. But as an outsider, I do wonder how economics is generally taught and whether this is part of the systemic problem. Maeve Cohen, director of Rethinking Economics, suggests in an RSA article that we live in a world of ‘elite economic policy makers’, disconnected from communicating with the rest of us, and unable to articulate a more inclusive type of economic reasoning. Her call is to therefore reform the system that teaches economics in the first place:
“We should teach economics as a social science, with people at its heart. We should make sure that all new economists leave university understanding that their discipline is value-laden and inextricable from history, politics, philosophy and sociology. Students should be taught that economics does not happen in a vacuum.”
But technocratic insight is, I suspect, always an iffy temptation in leadership. Reducing us all to predictable lab rats can periodically backfire on political confidence. Not even Vlad Putin, it is said, really though Hillary Clinton wouldn’t be the 45th. But it seems that many people’s feelings in that election campaign – their perception of the world – was of a system failing, or being allowed to fail them. And rather than turn to the radicals suggesting it might be a systemic problem that needs addressing, enough voters around the world to get noticed are wanting to find someone who will nail the lid shut on their boxes. Even force them into new ones, if need be.
We’re funny buggers. And it’s why it can take us so long to get what we really need. We think the need for self worth is the same as the need to look powerful.
Economics does not have an emotional or moral core driving it. But we do. A little inescapeably. Which means we need to drive our own economics. But we’ve learned to think that the whole genius of the free markets is that no-one can control them. Or should try. Look what happened to fat-headed communism, eh? Cuh. But, as Slavoj Žižek says in his book Less than nothing, the “logic of exchange-value follows its own path, its own mad dance, irrespective of the real needs of real people”.
There is no escaping the need for relationships. In, like, everything for humans. And that includes economics.
When good relationships fail, the economics tends to speak something else. When Nixon paniced and killed the Bretton Woods accords in order to, essentially, devalue the dollar significantly and help pay for his cripling war in Vietnam – a war, in the end, to try to destroy an alternative economic vision of the world – he paved the way for what we now call Financialised Capitalism. Which might in fact turn out to have been so spectacularly irresponsible and short-term, it triggers dawning crisis enough to get the thing we might really need actually talked about in daylight hours.
LIQUIDITY AND ENLIGHTENMENT
As Gerald Epstein puts it in his book Financialization and the World Economy: “In the last thirty years, the economies of the world have undergone profound transformations. Some of the dimensions of this altered reality are clear: the role of government has diminished while that of markets has increased; economic transactions between countries have substantially risen; domestic and international financial transactions have grown by leaps and bounds. In short, this changing landscape has been characterized by the rise of neoliberalism, globalization, and financialization.”
He goes on that different views of the idea agree on the basics: “Financial phenomena have become increasingly important in much of the world economy. And, second, that some of the effects of financialization– in concert with neo-liberalism and globalization – have been highly detrimental to significant numbers of people around the globe”.
Financialised capitalism is the backdrop to the world you and I have likely most known. And Greta Kripner describes it neatly when she says financialisation is a: “pattern of accumulation in which profit making occurs increasingly through financial channels rather than through trade and commodity production.”
The economist Michael Hudson prosaically calls financialism: “a lapse back into the pre-industrial usury and rent economy of European feudalism”.
The article this quote is taken from is an interesting glimpse into the whole sliding culture of business and employment, from five years before the big moment in our recent economics. It suggests some of the symptoms of thinking that lead to the 2008 financial crash can be found in the tech bubble of post-recession 90s: “Rather than becoming the anticipated force for social and cultural progress, technology became a vehicle for financial exploitation. Companies sought to keep productivity gains for themselves in the form of economic rent (income without costs) rather than lowering product prices or raising wages.”
Put over simply, financialised capitalism makes money faster and easier by betting on the value of things than by making things. A direction of flow no one could resist. A key cultural effect of financialism was the evolution of the labour market to diminish workers rights and confidences. Something many would site Thatcherism as responsible for in the UK, working closely with the US under Regan at the time. But her instigation of the deregulation of the markets – the Big Bang in 1986 – was born out of a desire to break up the stagnation of London’s financial district. To encourage competition and meritocracy, as it were, and break up the stale old boys’ network of the time. It put a rocket under the city and lead to the influx of new financial business to the UK capital that build Canary Warf out of the dead old trading heart of the east end docklands. Well done, everyone. Champers froth for all.
But it arguably set in motion that irresistable flow that even some of its architects criticise now. Thatcher’s own Chancellor under the Big Bang, Nigel Lawson, said for the BBC’s Analysis radio show, after the crash that with hindsight, he could appreciate that financial firms were previously much more cautious because they were trading their own money. But “after merging with major retail banks, the depositors’ savings were put at risk, and according to the programme this led US banks to follow suit” as the Wikipedia thread puts it. Once they were mucking about with other people’s cash, it all felt more like fun.
And New Labour’s own champion of further deregulation, Gordon Brown, has his own mea culpa in a 2011 BBC interview:
“We know in retrospect what we missed. We set up the Financial Services Authority (FSA) believing that the problem would come from the failure of an individual institution,” he said. “So we created a monitoring system which was looking at individual institutions. That was the big mistake. We didn’t understand how risk was spread across the system, we didn’t understand the entanglements of different institutions with the other and we didn’t understand even though we talked about it just how global things were, including a shadow banking system as well as a banking system. That was our mistake, but I’m afraid it was a mistake made by just about everybody who was in the regulatory business.”
What it all added up to was a system too complicated and big to fail, that no one was in charge of, that failed. Which meant ordinary people, left behind by the economic tide going out, were left marooned in the mud, weighted there by debt that other people had made money off.
Is this economic utopia? It is an economic culture of one kind, for sure. A context, in which all humans concerned are working; a filter through which they all see ‘reality’.
It is the product of having no other view of success and profit than Growth. It’s what the free markets – what human expedience – will do when you remove any sense of social obligation to the system. Which, under the Keynesian cordialities, is what the great engines of industry were always built for. It’s just suddenly they didn’t need factories or workers and didn’t have as many legal social restrictions. Woo-hoo, boys! Once you tacitly accept that the workers themselves are now financial commodities to trade, they didn’t need so much expensive infrastructure. The politicans didn’t need to spend quite so much time promising jobs to individuals when they could court whole service industry money business at champaign luncheons.
It’s all way more complicated than this, of course. But the effect is what it is. We are left with the failing infrastructure of post-war hopes, the withering influence of state social responsibility, and the inverse slide of wage value to cost of living, all over the world. And it’s led to huge discontentment at many levels of society all over the world. Because, despite what more and more humans are evidentially increasingly restless for, we have no story in business to tell of what else humans might value – and how.
Except that’s not true.
SEEING THE HOPEY CHANGEY BIT
Does the economic future currently look rather backwards? I think it does while our industrial goals and models effectively ignore something fundamental to how humans work. Relationships. But one corner of economic storytelling puts this at its heart.
You could say – and I will – we’ve got essentially two economic problems facing the world right now. Diminishing economic resources and an increasing disenfranchisement from the very jobs propping up the economy. People are increasingly hating the work they have to do to keep everything working, but for an awful lot of people, everything is beginning to look suspiciously like it’s falling to bits, despite their weary efforts. Automation and population explosions are really just fearsome impending accelerators to this wonky system. We’re still practically banking on people being willing to do bullshit jobs fueled by toxic energy. And at street level, more and more of us thumbing through news stories are feeling like we’re suffocating.
But real change is always a mutation in the heart of the old system, and arguably that’s already happening. More people are wanting to work for themselves, I’m sure partly because it seems easier than ever, with the rise of networked living, and they are wanting to do work they believe in. Wanting to give back. It’s getting normal to hear this now.
In a State Of Social Enterprise survey from even a couple of years ago, it was clear that something has been on the move in business start-ups. People wanting to use their biz energies to tackle social challenges. Not just make profits. In 2015, the survey found, more small businesses started in the UK since 2010 were social enterprise businesses, not just SMEs, and more than half of all social enterprise businesses then had been started in that period – the austerity years. As CEO of SEUK Peter Holbrook CBE said at the time: “The findings show that in a time of public sector austerity and globally networked markets, social enterprises are providing real answers to the significant social and environmental problems we all face. They are demonstrating that it is possible to do business differently: creating economic growth and jobs whilst also operating fairly and helping those people and communities most in need.”
The fact that these businesses often rely on the public sector for funding, and often struggle to get it, isn’t the point – the point is to look at what people are wanting to do and doing. Help make a difference to each other.
Just look at the organisation that actually uses the name Work For Good – all its members are former big business minds, wanting to bring their personal lives into their nine-to-five. They may feel they have to say on their homepage impress your clients but the truth is they believe such humanity will. It will remind those you want to have working relationships with that you are a fellow actual human.
Now, I think there is a principle among social animals that has kept us alive for countless thousands of years. Sharing. It’s as hardwired into our brains as wanting to bash each others’ brains out when we can’t get what we want. We’re dicotomous morons, really. But there are projects and initiatives popping up all over the world that explore the principle of changing how we invest in our every day lives.
Sharing and circular economies approach the use of resources differently, because they start from a different goal – not growth, but good. I know. What saps.
The Ellen MacArthur Foundation describes a circular economy as providing “multiple value creation mechanisms that are decoupled from the consumption of finite resources.” Sounds quite engineery, which may be unsurprising from a founder who can fix a high end yacht in a midnight storm in the south seas all alone. And out at sea you know a thing or two about resourcefulness, determination and conserving resources. And a circular economic model certainly promotes a certain presence of mind. Awareness.
As the neatly acronymable Waste Resources Action Programme puts it: “A circular economy is an alternative to a traditional linear economy (make, use, dispose) in which we keep resources in use for as long as possible, extract the maximum value from them whilst in use, then recover and regenerate products and materials at the end of each service life.”
The Sharing Economy takes this principle into an even wider mindest, as Benita Matovska, founder of The People Who Share, explains.
“The Sharing Economy is a socio-economic ecosystem built around the sharing of human, physical and intellectual resources.” A model that puts people at the heart of it. But what does that mean? And how are you going to be able to pay your mortgage with barter? Not that you don’t already do that, giving most of your soul and time in exchange for a little brick and mortar. You’re welcome.
In his latest Black Ops Department talk, The Passing, Marcus John Henry Brown mentions ‘the illusion of the sharing economy’ as a tiny graphic footnote in his rich visual acompanyment to the performance, placed on an imagined timeline of events that lead to the forming of the fictional world he is painting. I mentioned it to him, chatting after I’d seen it for a second time at a special Bournemouth University event recently.
“Yes,” he said. “The notion of a sharing economy is an oxymoron – you’re either sharing or you’re doing something in the economy. And everything in the end is something valued in the economy.” His ‘accidentally dystopian’ worldview is full of chillingly visionary observations of today’s corporate-social culture, channeled into Black Mirroresque implications through the possibilities he sees in digital and biological technologies converging in a very particular economic outlook. An outlook it’s hard to look away from, so likely does it seem, in a particular context.
The twist of hope in the idea of the sharing economy is the recognition of economic value on all kinds of transactions that currently sit outside our economic model. At it’s heart is the crucial philosophical question: What is the real scope of what we value? And how?
Say the words “Sharing Economy” and people immediately say back the words “Uber” or “AirBnB”. But I think this is misleading. The taxi firm phenomenon and hugely successful online vacation property rental platform may employ some flexible thinking in the way they use exisiting physical resources in conjunction with digital network tools, but there’s an old growth model at the heart of them for those setting them up. A fair enough business idea, albeit one that breaks new ground in circumventing worker and user protection and representation for the sake of worker and user flexibility. In the case of Uber, something that puts more power into the hands of the few than the many, to an extent that former FSA boss Adair Turner supposedly said was like a new ‘feudal hiring system’. There are questions over how they really work – magically 21st century as AirBnB sounds next to clunky old hotel chains, when clunky old hotel chains announce so many thousand new rooms constructed worldwide and AirBnB can claim millions of rooms that were already just there to be tapped into. Sounds smart, and it is. But a sharing outlook is a lot more fundamental than that.
“In its entirety and potential it is a new and alternative socio-economic system which embeds sharing and collaboration at its heart – across all aspects of social and economic life” as The People Who Share put it. And they list just what sort of transaction this can incorporate, including: “swapping, exchanging, collective purchasing, collaborative consumption, shared ownership, shared value, co-operatives, co-creation, recycling, upcycling, re-distribution, trading used goods, renting, borrowing, lending, subscription based models, peer-to-peer, collaborative economy, circular economy, on-demand economy, gig economy, crowd economy, pay-as-you-use economy, wikinomics, peer-to-peer lending, micro financing, micro-entrepreneurship, social media, the Mesh, social enterprise, futurology, crowdfunding, crowdsourcing, cradle-to-cradle, open source, open data, user generated content (UGC) and public services.”
It is a hybrid economy. A bridge, perhaps, between the old economics of manufacturing things and selling things, and a future economy of abundance through nano fabrication – making everything we need from molecular assets, for ‘free’. A Star Trek idea that sounds so head-twonkingly utopian we have no deep pragmatics in place to even concieve how we’d all live around this properly yet. It sounds like pure fantasy. Any hope of it working would have to start with exploring a whole new mindset – a psychology we would need to spend generations working through to be ready to use it. But if it started anywhere, it might well start with more ordinary people seeing two things more and more in their every day lives – the incredible possibilities of developing technology, and real pressing challenges on resources. Creating a growing social pressure to consider and discuss and experiment with new ways of doing things. It might start with us ordinary folk, asking bigger questions.
So asks Common Vision a think tank trying to articulate the future from a younger point of view. “We work towards the long-term changes in society, the economy and politics that would result in a better world for the next generation.” Because, as CoVi founder Caroline Macfarland puts it: “partisan, political debates just aren’t seen as relevant by most people today”. It’s a new kind of econo-eco-social politics we need today. The old Left/Right that you and I grew up with is essentially in the way.
One of the greatest symbols of economic prosperity might be the fashion industry. And perhaps reflecting the nature of that success in the past, it is the world’s second greatest poluter. Yeah. Did you know? But it’s something getting gradually more talked about. As Ellen MacArthur said at a recent Business Of Fashion conference. The industry can start to get more circular, she suggests, with initiatives such as her foundation’s Circular Fibres project. “The fashion industry is about beauty. But is it really beautiful if 73% of 53 million tonnes of garments produced end up in landfill or incinerated, is that a beautiful system?” It’s getting talked about at higher levels more.
And thinking about great polluters in business, what about the big one, then? The corporate fondness for fossil fuels. I suspect we’re rounding the tipping point on the economic sense of relying on them right about now. As Professor Martin Green said said at the recent : “While the sun is shining, burning coal to generate electricity is a little bit like burning dollar notes. You’re just throwing money down the drain”. And the fossil giants essentially know this.
The big Oil & Gas companies are facing a ‘carbon bubble’ of ‘stranded assets’ that will potentially change their business world. Prospecting for assets still stuck in the ground has lead them, arguably, to ‘invest’ in drilling and pipelines just to do the dance of confidence to the markets. Which they might hope looks like Scheherazade’s entrancing of the Persian king but looks increasingly more like your uncle Ian’s One More Tune routine after the function room bar had closed at Tina’s daughter’s wedding. A desperate mess.
Interesting to find NGOs like Carbon Tracker try to put the case in investment terms the markets will understand. “The major oil and gas companies are now talking about demand destruction and even peak oil demand” as they put it. And while the language of the markets and investments and financial planning still sound point-missingly fiscal asset-minded to old hippies like you, this is still the language of world-turning economics. You may have had your personal epiphany about spending time with the trees – and I’m not even laughing at this any more – and the obfuscation of greenwashing is ever present in old money circles, but the scale of our global challenge needs political-economic clout. It was Carbon Tracker founder Mark Campanale’s report that first lead to a serious investigation into how much fossil fuel we already have that we don’t need. It’s a lot, is the headline. But over the last couple of years, NGOs like 360.org and Counter Balance have been galvanising different investors to get behind the idea of divestment – removing assets from planet-destroying fossil fuels consciously altogether – and more sustainable big banking investment. It will be bad news for the O&G companies if they don’t turn their own tankers on the way they invest in energy, but it will be a necessary shift for everyone else.
The phrase ‘ethical investment’ is now a thing emerging in many FAs’ marketing. And this should sound a tiny note of optimism in your weary soul. And if that’s too much unicorn dust to sprinkle on your cornflakes, China is investing heavily in renewables. Best part of £300Billion by 2020 they are claiming. So, maybe simply there is your bellweather. The communists, leading us to the economic future.
While the human-planet system will need the clout of the big corporates to swing more behind sustainable practices, the fundamentally more 21st century principle driving change is about you and me, from the ground up. Millions of tiny decisions, rather than a few massive ones. More writers are exploring how emerging crowd-sourced capitalism – as Arun Sundararajan puts it in his book, The Sharing Economy – might work. And has Paul Mason puts it in his book Post Capitalism, it’s the combination of the networked human with growing economic disatisfaction with the pressing scale of the climate crisis that could wonk a genuine culture change across global economic storytelling.
“As with the end of feudalism 500 years ago, capitalism’s replacement by postcapitalism will be accelerated by external shocks and shaped by the emergence of a new kind of human being. And it has started” he asserts.
And as Time‘s economics columnist Rana Foroohar says, her scepticism has been turning to intrigue as more experiements in the gig economy unfold.
“There is a growing debate in some technology and economic circles about whether digital services could, in fact, lead to a post-Marxian future in which labor begins to gain power, rather than lose it, by becoming the owner of capital.”
As she reported in the Financial Times even before the huge cultural shock of the 2016 US presidential election, business sectors are gearing up for a shift in how we work.
“A spate of research by everyone from high-profile academics to McKinsey consultants points to the idea that in the next 10-20 years, the number of people working as freelancers, independent contractors or for multiple employers will increase dramatically… So the sharing economy, made up of both lower-level gig workers and higher-end professionals with “portfolio” careers, is the future. The question is whether it will be an economy that creates more sustainable, robust growth.
“There are two paths this new economy might take. One, more widely covered, is Darwinian. People at all ends of the socio-economic spectrum become Uberised… But there is another possibility. Platform technologies used by companies such as Uber could, with a few crucial tweaks, enable a return to a more benign, pre-industrial form of capitalism.”
If Adair Turner himself, helping to steer the world of corporate finance at the highest level through the post-Lehman Bros global crash, says much of the way corporate finance works in, well, everyone‘s imagination, is “a myth” and that most capital investment doesn’t go to entrepreneurial businesses but into good old, easy bricks and mortar – property – then we currently have a global economy that is, apart from anything else, all but forcing our hand as individuals to duck out of its incentives and supposed help and pursue different ways of doing things.
One writer into The Guardian says what a lot of people might say, directing his criticism at Mason’s thesis in saying: “It has taken thousands of years of human ingenuity to build a smartphone, and every link in that vast chain – from rare-earth mines to polymer labs to the farmers who feed the delivery drivers who put the smartphone through your letterbox – expects payment for their property and their effort.”
They do, and will. Duh. The interesting question – the thing to watch for – is the proportion of how much we are willing to pay for such traditional ways of doing things, and how much of our occupations and possessions we want to spend and buy outside the system. Because it appears to have moved already.
Fundamental change doesn’t happen like having a lever pulled or a button pushed, does it. Our recent generations have gotten this mindset soaked into our outlooks – everything is binary, on/off, yes/no, have/lose. The truth of all systems of life on Earth, including human economics, is that things evolve through mutations. And there is more evidence around us today that the way we want to work, live and value ourselves is going through a collective global crisis that is producing at least some tiny mutations. New models. New types of success. And that’s interesting.
Whether such flowers in the scrapyard signal anything as fundamental as the overthrowing of an old system or even the end of human economic progress all together, or whether they are little clues to the actual shape of the future – it’s a big debate to continue to explore. But change certainly has to happen in the gaps left by the cracks in any old world order, as people grow into new practices. And the very best way to explore anything, is to muster the personal courage to pack a rucksack and sturdy walking boots and tread out the miles one’s self.
Whatever else we are, we are kinetic learners. And we may find the whole shape of the future can feel different when we feel it for ourselves. Try some shee. Get out there and ask: “What do I really value? And what if I just did it like this?”
The economic future needs to be sustainably different to the one that got us here. More people need to benefit, for one thing. It is patently destabilising to have so many people falling out of the system around the world and this shows us at least that we need to make some adjustments somewhere. And how should we analyse and factor in our general wellbeing and what drives it? Is it only a different kind of economy that can really address our mental health crisis? One that connects us to the planet and to each other much more consciously? A much less disconnected economic world view.
Is the growth that we should be finding pragmatic ways to really invest in, the sort with psychological roots in the soil?
Everyone has to hussle. Whether you live in the artistic moment, like my brother Tim and many of my friends, or you work with big corporate clients, helping them plan spends and reach audiences and look for returns on investment, like many others in my creative extended family. But what all of us need as humans is more dignity in our working life choices. And a huge part of what will make this possible is all of us imagining with every transaction in our lives, every value decision we make, that we have responsibility to help each other create such choices. Such opportunities. In this case, more ‘circular’ thinking is more sustainable thinking. More connected thinking. The sort of thinking that helps human beings emotionally, socially, grow.
I’d suggest that, as with every other part of the human-planet system, what is really needed is a whole new way of seeing the economic future. And our job is to begin the long generational process of cross-fading our outlook. Of picturing a whole new value system in a post-digital, potentially post-capitalist, post-Marxist, post Left-and-Right world.
Interestingly, lots of people already can. That’s the kind of confidence we can really bank on.
NEXT TIME ON UNSEE THE FUTURE – Ep4: Food
Listen to a little bite size bit of Paul Mason on the beginning of a sharing economy:
Watch a series of interview bites from the launch of the Unburnable Carbon report in 2013 :
Hear Greta Krippner’s analysis of financial leadership in the 2008 crisis: