Tuesday, 21 June 2016

If we want a kinder, gentler politics, we must first shape a kinder, gentler, economic system

A member of parliament is murdered while doing her job. Flags fly at half mast, parliament is recalled for tributes, campaigning in the referendum is suspended, the prime minister and the leader of the opposition share a platform and the challenger parties decide not to contest the now vacant seat.

These are far from empty gestures. At the height of the most divisive, dishonest and ill-informed political confrontation that most of us can remember, it has taken a tragic act of violence to set free the instincts of our common humanity. It has reminded us that to empathise with and care for one another, to support each other and to share in our deepest feelings, whether of joy or of loss, is profoundly normal. As such, it throws into stark relief how entirely abnormal is the institutional behaviour that our political and economic frameworks impose.

In the House of Commons on Monday, the words of Jo Cox were repeatedly invoked, that we "have far more in common with each other than things that divide us”. Jeremy Corbyn said that her death should mark the start of a “kinder and gentler politics”, a tacit acknowledgement that, for the most part, politicians of all persuasions want good outcomes for ordinary people, but are trapped in a competitive, adversarial system that they believe cannot be changed.

Our institutions of governance are adversarial by design. They demand conflict for the explicit purpose of squeezing out human feeling. In politics they set government against opposition, party against party, each fighting to deprive the other of power and control. In the economy they set the owners of capital against paid workers, lenders against borrowers, home owners against renters, shareholders and directors against their employees, corporate interests against social justice, middlemen against both their suppliers and their customers. In the law, they set plaintiff against defendant, the wealthy against the disadvantaged, the state against the dispossessed.

I am willing to believe that, when David Cameron invoked the "big society" before the 2010 general election, he genuinely sought to favour collaboration, sharing and fairness over greed and acquisitiveness. Then, in government, he found himself driving a system so completely in hock to the owners of capital that prioritising their interests became essential. If the current government, neo-liberal to the core as it may be, could see a way towards universal prosperity, greater equality, a better-funded health service, etc., without spooking the markets, I don't doubt that it would take it. But they can't see a way because the system has blinded them with false certainties that they dare not challenge.

The bizarre consequence is that the government addresses the housing crisis not by increasing low-cost supply, but by offering cheap loans that force up house prices still further. It addresses poverty not by investing in opportunity, but by making the consequences of unemployment more painful. It addresses economic weakness not by seeking to unleash people's creative energy, but by allowing corporations to profit from low-paid, dead-end, insecure jobs, the growth in which it then describes as a success story.

The arch-marketeer George Soros explains why this is: Britain, he writes, "is more dependent than at any time in history on inflows of foreign capital". Brexit will reverse those flows, he predicts, causing a 20% drop in the value of sterling, offering rich pickings for speculators while making most voters considerably poorer.

Even without Brexit, the government is forced to sell or outsource every revenue stream it can come up with, from crazily expensive nuclear power contracts to national infrastructure to the provision of prisons, and many, many others, in order to keep that foreign capital flowing in. And the more revenue it sells, the more it has to find to sell, because the capital flowing in to buy those streams is more than matched, over time, by the revenue flowing out in the streams themselves. The debacle of the Private Finance Initiative (PFI) is proof of that.

The British economy is on a treadmill that is running away from it. Some time soon, its feet will not be able to keep up and it will fall over. That time could come on Friday of this week, or it could come in one, two or three year's time. That is why the outcome of the referendum does not hugely matter in economic terms. Soros is right, of course, but for the increasing army of Britons who feel that the economy has abandoned them, a crisis now may be more attractive that one merely postponed.

In this context, Britain's divisive political establishment looks like a pack of jackals fighting over a rotting corpse. There is nothing good left for anyone. Just as Syriza discovered in Greece, any party in power is faced with the same depressing certainties, the same obligation to conform to the expectations and requirements of the international financial markets.

Those markets have no morals. If we run our economy on their say-so we must reap what we sow. But if we want that kinder, gentler politics of which Corbyn spoke, we must first shape a kinder, gentler, economic system in which human effort, rather than market capital, is the guiding principle.

We are already learning what a people-focused economic system looks like. It treats housing as a social need, not a profitable speculation; it invests in people, allowing them to do productive work, whether paid or unpaid; it measures economic activity not as GDP does, in terms of money transactions, but in terms of the social and environmental benefits that it brings; it treats money as a tool to facilitate social interaction, not as a vehicle for creating debt owed to vast banking corporations.

The transition from an economy focused on the capital markets to one focused on people's aspirations, capacities and needs will take time, and careful management. But before all of that, it calls for political determination to work towards a better system. Irrespective of the outcome on Thursday, the lesson of the reaction to Jo Cox's death is that politicians like the idea of working together to build a better society for us all. Maybe on Friday they could get going on that.

Picture credit: Enver Rahmanov (Own work) [CC BY-SA 3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Friday, 10 June 2016

The basic income will make sense when people learn to value their unpaid work

Work in progress
(but investment is needed)
Which is more remarkable - that 77% of Swiss voters rejected proposals for a basic income in a referendum last weekend, or that 23% voted in favour? Admittedly the turnout was low, probably because there was little realistic chance of the proposal being passed, but the fact remains that nearly a quarter of the votes were in support of a radical, socially progressive idea of which nobody much was talking until very recently.

A well-executed basic income policy fixes so many socio-economic issues - both present and looming - that it's tempting to think not if, but when. The main barrier, however, may not be demonstrating effectiveness, or even affordability, but overcoming public perception. People are rightly wary of "something for nothing" offers, including the idea that people should be 'paid' without committing to 'work'.

Such perceptions matter, which is why 'paid' and 'work' are in inverted commas in the previous sentence. We assume that work comes first: once performed, it is valued and remunerated accordingly. In reality, however, money comes first: access to work is filtered through employers, who have the necessary money to invest in a workforce. This is why political rhetoric focuses so obsessively on businesses 'creating' jobs and people 'looking for' work.

This need to 'find work', however, creates an artificial bottleneck that limits people's productive capacity. Like a litter of piglets crawling over each other to get hold of a nipple, people are only enabled to contribute economically if they can find a point of access to the money system.

If access to money is what makes economic activity possible, why make it so hard? That's the premise of the basic income, which solves the problem by giving everybody an allowance of the money in the system. This frees up their autonomous capacity to work, without being dependent on the system to fit them in.

Implicit in this is a reassessment of the way in which we measure economic value. The unpaid economy in the UK is well over half the size of the money economy, and probably much bigger than that in terms of its usefulness, since unpaid work that people choose to do is more likely to result in something that is genuinely wanted.

The basic income acknowledges this by relegating money from the status of wealth to that of wealth-facilitator. After all, unpaid work also requires money: it needs tools, vehicles, materials, land, accommodation, etc., just as any work does. If the only route to that money is through payment, the amount of economic value that can be created through unpaid work is unnecessarily limited.

To put that in real terms: a person busy with paid work may be able to afford what is needed to cook wholesome meals, grow vegetables, look after their own children, write novels, learn a new skill, etc., but is unlikely to have the time. A person without work has the time, but may lack the financial resources unless somebody else is able to provide them.

If that busy worker is well paid, they will buy the meals, vegetables, childcare, etc. that they need. In the low wage, zero hours economy, however, paid work consumes valuable time without producing enough to buy the resources that are needed. Similarly, people required to search interminably for work in return for meagre state 'benefits' have neither time nor sufficient money to cater directly for their own needs.

Work, essentially, is exactly that - people catering for their own needs. Giving people access to money through the basic income will generate big increases in productive economic activity, but we won't know that unless we measure it. Currently we don't: GDP, which is our measure of economic success, is only interested in paid activity, so a large amount of useful work is systematically ignored.

Changing public perceptions about the basic income, therefore, depends upon changing our understanding of useful work and the way that we measure it. Since all of us do unpaid work, and none of us could survive without doing it, that ought not to be too hard.

The crucial point is this. The basic income is not paying people for their otherwise unpaid work: it is providing them with the financial investment that makes it possible for them to do it. Investment in people is not "something for nothing", but sound economic practice. It is also what people deserve.

Photo credit : Berit from Redhill/Surrey, UK (housework) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons


Monday, 6 June 2016

When the referendum's finally over, the important questions will still be with us


Not the real question...
With the referendum sitting on a knife-edge, it is increasingly pointless to speculate on an outcome that will be known in a little over a fortnight. In any case, that result will solve nothing. The only satisfaction likely to come from it is the schadenfreude (if that's your thing) of watching one or other group of self-serving Tories squirm. (Sounds like a win-win?)

Meanwhile, the big questions will still be with us. Those questions are: the economy, housing and education. If you're wondering why health (or immigration) aren't included it's because they're in the "economy" box. Health policy is essentially about paying for it; immigration is an issue because people blame it for their economic circumstances. Creating a fair, more equal, more productive economy will fix a lot of things.

Housing looks like an economic question, but there's a cultural issue that needs to be tackled first - something to do with our nimby-ist tendency to fetishise house ownership and house prices, while restricting access to building land.

Education might seem, like the health service, to be an economic question, but it's actually much more than that. Our education system dictates the sort of society we are, and whereas governments do not, in general, try to tell people what it means to be well or ill, they have an almost dictatorial approach to what in means to be educated. Even a single day of state-directed schooling missed, they tell you, can have a lasting effect on a child's life chances.

Real education is formed in a close relationship between pupil, parent and teacher. In any other such relationship we would not tolerate such government interference, and yet we take it for granted that politicians get to decide what children should learn and how they should learn it.

This is symptomatic of a deeper problem that pervades our politics, which the referendum campaign typifies. So focused have we become on personalities, soundbites and petty feuds that the question of values - social, ethical, economic - is largely ignored.

That's convenient for the powerful few, but ruinous for the rest of us. For, only by taking a hard look at the values that have been foisted on to us can the conditions be created for fundamental change.