September 2011 - the month when the new economics went mainstream

 By clry2

We have been beavering away here at nef for a quarter of a century on behalf of the new economics – explaining what an economy which puts people and planet first looks like, and why it is urgent and possible.

Often we point out coming economic disasters. Often we suggest the solutions before they are taken up, though our solutions tend to be adopted in peculiar, narrow or bowlderised ways. Sometimes, for a second or two, it even looks as if we are winning.

But I have a feeling that, looking back from the benefit of hindsight, we will remember the final week of September 2011 as the moment when something shifted.

I don’t mean the unseasonable weather in southern England, in shorts and factor 50 in the middle of autumn – though that is, itself, some indicator of looming environmental crisis.

No, for some reason a whole raft of events happened together in one week which seems herald a new economic dawn:

• The European Union backed the Tobin Tax for a levy on financial speculation, a key element in the new economics since nef was founded in 1986.

• The EU has also decided to implement a ban on the big accountancy firms from cross-selling accounting and management services – an obvious conflict of interest, pointed out in our report Five Brothers back in 2002. 

• FSA chairman Adair Turner, speaking at a nef seminar on the future of banking in Winchester, argued for the new regulator to have more powers over the creation and distribution of credit.

• Our book Where Does Money Come From?, explaining how money is created, was published with a foreword by none other than the eminent former Bank of England director Charles Goodhart.

• The chief executive of Lambeth Council Derrick Anderson spoke at the launch of the electronic version of the Brixton Pound, the first local e-currency of its kind in the world, now bypassing the financial markets to provide real resources to Brixton.

None of these are exactly the new dawn by themselves, but – taken together – they are evidence of an important new phase, the beginning of the great transition to the new economics.

Even this morning, there was BBC business editor Robert Peston, and former darling of the Conservative right Michael Portillo, spelling out nef’s diagnosis for the past quarter century – that speculative finance has been driving out the real economy.

Perhaps it is hardly surprising that, as the latest disastrous debt crisis mounts, the global policy establishment has shifted into a new economics mindset. The challenge is to make sure that, this time, they act.