The nef blog

When I was a great deal younger, those Widmerpools among us who believed themselves to be sensible forward-looking people, in touch with the real world, used to justify their opinions by explaining that “you can’t stand in the way of progress”.

These days, when we know it didn’t actually turn out to be progress at all – as the abandoned concrete monstrosities around our towns bear witness – they say: “you can’t stand in the way of the market”.

This empty and unproven phrase covers almost anything accepted opinion happens to believe at the time.

Right now it is being used to cloak the out-of-town retail lobby which seems determined that high streets should be left to die. A particularly rhetorical article in the Financial Times today puts it like this: “It is time for the local high street to die. The case for its death is simple: people no longer shop there.”

This is absolute nonsense. If people really didn’t shop there, there would be more than a few vacancies and boarded up shops.

The truth is more complicated, as I said on the World Tonight last week (from 35 mins in).

High streets are changing. They are under huge pressure, of course, because of the squeezed middle – the chain shops which neither offer anything distinctive nor are backed by the huge monopoly power of their competitors. 

The rents have also been too high for many years as pension funds have taken unsustainable sums out of high street businesses, which is the real reason high streets are so sensitive to recession.

But people still shop there. Which is a good thing, because without high streets as business hubs we will reduce our cities to dependent and sometimes impoverished dormitory towns where people park their cars before driving out of town. This also means higher crime: thriving high streets are safer high streets.

Without healthy town centres, we will be wholly dependent on motorized shopping – which suits only some sectors of society – and on major oil-based distribution systems, just as energy prices begin to rise to unprecedented levels.

“As long as people are spending, should we care where or how they are doing it?” asks Harjeet Johal in his FT article.

This is the kind of narrow economism – a failure to understand that there is life beyond the bottom line – that really threatens to impoverish us. Money spent locally on local business stays circulating like lifeblood. Money spent on big chains stays out of town and enriches the shareholders or the City. Money spent on gambling changes the structure and priorities of the society around you. 

Where and how you spend your money are moral choices and they matter very much. If you really believe those choices make no difference, then you will end up living in Pottersville, and you will deserve it.

What people actually want is choice. Yes, they want out of town malls sometimes, but they also want high streets – which is why they continue to shop there. What we have to do is to guide and shape the market so that it isn’t bled dry by monopolies, isn’t ruined by an over-provision of out of town stores (which is what destroyed so many American towns), and continues to allow high streets to thrive.

Don’t let a small lobby use the opportunity of the recession to say that our town centres are dead – because in the end, what would most of us prefer? Dead town centres or strict limits on out of town shopping?

I’d be prepared to bet that people would at least vote for the choice.

A decade ago, nef published the first of a series of reports called Ghost Town Britain.

They had a huge impact, pointing to the terrifying way in which high streets and neighbourhoods were losing their assets – butchers, pubs, post offices, banks, playing fields and all the rest.

It suggested that, in high streets, this would eventually lead to a series of tipping points when all businesses in each high street would collapse. The way the bankruptcy of small shops quadrupled in a year shortly afterwards bore this out.

The process is still going on. We are still losing banks (despite them being in public ownership) and post offices (despite promises to the contrary).  We are also losing local courts, schools, police stations and other institutions.

And every time we lose one, we lose a little life. We bring the embalmer a little closer to our neighbourhoods.

What were we to do about it? We struggled with this for some months, but what we actually did was to ask the indefatigable campaigner Ron Bailey to draft a bill to force local councils to come up with strategies to halt this life-threatening decline – if local people ask.

He did so, and thanks to the efforts of Local Works, and to MPs like Nick Hurd and Sue Doughty, it became law as the Sustainable Communities Act 2007.

It is true that the new law has not been used on the scale that it could be. But that may never happen, because the government is proposing to change it. They want to get rid of the time limit, to restore to local authorities their time-honoured right to obfuscate forever.

Worse, they are backtracking on a promise to allow town and parish councils to use the Act directly.

Something must be done. The Sustainable Communities Act was one of nef’s finest hours and we need to make our opinions felt. Luckily Unlock Democracy is suggesting exactly that.

Politicians may be incapable of modernizing our dinosaur-banks, but in the world of electronic exchange things are more exciting. In particular, the ubiquity of mobile phones and the internet creates enormous opportunities for ‘dis-intermediation’ – or the removal of banks as the middle-men enabling payment and settlement. The exchange of monetary units (whether they are denominated in national currencies or otherwise) could well be the next big internet-driven ‘disruption’ in the west. Some predict that internet money could do to banks what Amazon and Napster did to the established book and music industries. 

In the UK, the peer2peer lending company Zopa has shown what can be achieved, expanding in just a few years to take up 2% of the consumer loans market. In developing countries, however, with much weaker banking infrastructure, the true potential of mobile/internet money to revolutionise the finance sector has recently become clear. In Kenya, for example, mobile phone provider Safaricom created a payment system called MPESA which by July 2010 was where 70% of electronic transactions were taking place with over 15 million subscribers including 50% of the poor. 

Here in the UK things have moved at a slower pace but nef, together with our partners Transition Network and Dutch community currency innovators QOIN have now developed our own, not-for-profit electronic community currency service infrastructure. Called, for the moment at least, ‘Community Currency 2.0’ (CC2.0), it enables users to make payments to each other or businesses via simple text messages or do so online using a simple user interface. The system is capable of managing both sterling- and non-sterling backed currencies (e.g. timebanking or LETS) and is based upon Cyclos, an online banking platform developed another Dutch NGO, the Social Trade Organisation (STRO). STRO have been developing the platform for ten years in a variety of settings, including a national project to support SMEs in Uruguay, to boost local economies.

The first UK pilot of CC.20 was the Brixton Pound (B£) which has been using the platform successfully since October 2011 and gives all customers using the system a 10% bonus when they convert from sterling to electronic B£s. The second pilot will be the city-wide Bristol Pound, with support from Bristol Credit Union, due to launch in May this year.

And this blog is a call for interested parties to submit applications for a third UK pilot. The winning tender will receive £20,000 worth of money and support from the nef/QOIN/Transition team in implementing their currency scheme so long as they can successfully raise a minimum of £20,000 locally. 

Please download an invitation and forward to anyone you think may be interested – the dealine for submissions is 27^th February 2012 and responses should go to communitycurrency@neweconomics.org

Crunch time is rapidly approaching for Greece, as its ruling coalition fail to reach agreement on austerity cuts. In return, its private creditors have ‘volunteered’ – with the barest minimum of Troika arm-twisting – to reductions in Greek debt of around 70 per cent. If nothing is signed up to by 20 March, when €14.5bn has to be rolled over, Greece will face little choice but to default.

The IMF, EU, and ECB Troika are putting on a big show of tutting, foot-stamping and finger-wagging, but the truth is that Greece pretty well has them over a barrel. Default is an unknown quantity. Costs for Greece could be high, particularly if the ‘national unity’ government insists on attempting to maintain its euro membership. But with a trashed economy showing no signs of recovery, even the threat of exclusion from external capital markets may not look too grim – and a quick glance at the record suggests most defaulting countries come out of it in better shape.

Costs for the EU, however, might well be astronomic. Containing a Greek default is one thing: the sovereign debt, though large, is manageable. Losses to banks will by now be significant, but not unbearable. The real danger, however, is that one EU member in default sparks a chain reaction. First, as other countries realise the costs are not as high as they feared. Second, as markets sniff blood and notice that Portugal, currently facing 16 per cent borrowing costs, is scarcely in a better position than Greece; or that great chunks of Spain’s immense property loans aren’t payable; or that Italy’s €1.3tr debt isn’t going away any time soon.

Contagion is the Troika’s biggest fear. It is also Greece’s greatest strength. Its government have their finger on the debt nuclear button. It’s entirely in their interests to do as little as possible for the EU/ECB/IMF, especially ahead of April’s elections. Brinksmanship is the order of the day. No doubt some agreement will be cooked up before then, and before the March deadline – the latest in the long line of austerity packages that have wrecked Greek society. But it’s an indication of how serious the situation is that we should have got this close to collapse.

First thing on a Monday morning - surely the best time to contemplate life and death? In the Guardian last week there was an article about an Australian nurse who cared for people in their last 12 weeks of life and what she learnt about their regrets. Whilst I can’t vouch for the scientific validity of the study it is certainly true that we will all die, and that many of us will have a chance to reflect on our lives as we approach death. Did we do the things we would have liked to? Did we treat others well? Did we achieve what we wanted to? Or to quote John Betjeman – did we have enough sex?

The list I think is quite interesting and perhaps not surprisingly focuses on what people regretting not doing rather than regretting what they had done.

1. I wish I'd had the courage to live a life true to myself, not the life others expected of me.
2. I wish I hadn't worked so hard.
3. I wish I'd had the courage to express my feelings.
4. I wish I had stayed in touch with my friends.
5. I wish that I had let myself be happier.

Really the whole list is about what we at nef call people’s well-being. They are about being authentically ourselves in the world. Taking notice of our feelings, connecting with friends and family, being generous to others and ourselves … all good five ways to well-being examples. But the one I struggle with is ‘working too hard’. 

Not that I am advocating over-work, nor am I against the ideas of shortening the paid working week towards 21 hours. Not at all – I think 3 day weekends could be a strong rallying call against the oppressive economic system that we live under. No it is just that my work (with nef) is one of the most meaningful and important aspects in my life. It is right up there with my kids and partner. It is far more important that the fact that Tottenham are having their best season since I was a teenager (but that is good – very good!)

In many ways the work we do is one of our biggest opportunities to have a positive impact on the world. I like everyone else at nef (and probably by association most readers of this blog) think that the world is not in a good state. Our present problems of financial crises, widening inequalities, persistent poverty and biodiversity loss are further deepened by the looming threat of future climate change – none minor problems to say the least.

But working towards the Great Transition, that we as a society need to embark on, seems like one of the most meaningful things I can do with my life. It is something that I am prepared to work hard on, but while still making time for being a parent on the touchline (even in the freezing cold) and hoping my friends don’t feel too neglected. When the grim reaper comes to call (as he inevitably will one day) I don’t reckon I’ll regret too much.

Have a Happy Monday everyone, and remember to live before you die …

Originally posted at Comment is free.

Listen to the news today and you would think that economic growth was the only answer to all our problems. But 40 years ago The Limits to Growth, written by a group of scientists at the Massachusetts Institute of Technology and published by The Club of Rome, broke a modern taboo: it suggested that growth itself might be the problem.

It wasn't the first time someone had suggested that an economy endlessly expanding in scale was neither possible nor necessarily desirable. As long ago as 1821, David Ricardo wrote of the ultimate equilibrium to which economic development led. And, in his Principles of Political Economy, 1848, John Stuart Mill raised and answered the question like this:

"Towards what ultimate point is society tending by its industrial progress? When the progress ceases, in what condition are we to expect that it will leave mankind? It must always have been seen, more or less distinctly, by political economists, that the increase of wealth is not boundless: that at the end of what they term the progressive state lies the stationary state, that all progress in wealth is but a postponement of this." 

Why, then, did The Limits to Growth shock in 1972, and why does questioning growth today still provoke incredulity and anger? The report itself became something of an albatross for the green movement. The view entered folklore that it contained predictions about resource use that were alarmist and plain wrong. But, as New Scientist magazine reported recently, it was the critics of the book who turned out to be mistaken.

For one thing, the model used by the MIT scientists didn't make precise "predictions", but projected what was likely to happen if certain trends continued, allowing for "adjustable assumptions" of resource use. Their real finding was not that collapse was likely to occur by a particular year, but that population and the global economy would contract rapidly after peaking. The only circumstances under which some kind of stabilisation, rather than collapse, was achieved, was constraining population and the scale of the economy.

Models and reality are not the same thing. But – strikingly given the relatively crude computer modelling available at the time – the MIT projections have proved remarkably accurate. Today they can be checked against decades of actual data. Population, industrial output, pollution and food consumption all track the lines in the model.

There is a popular view that economic growth can be saved by efficiency measures, recycling and technological substitution, such as nuclear and renewable energy replacing fossil fuels. Yet the model allowed even for these variables, and crashed under the pressure of growth just the same.

I took part in a debate last week with Michael Jacobs who was an environmental adviser to Gordon Brown's Treasury. My job was to respond to a lecture he gave at University College London called The Green Moment? The Crises of Capitalism and the Response of Progressive Politics. Jacobs's critique, which several on the left share, is that pointing out the non-viability of economic growth (at least at the global aggregate level and where rich countries are concerned) is a mistaken article of faith in the green movement.

His argument is that, firstly, opposing growth is bad politics, it's bad spin for the green movement that "puts people off". Secondly he argues that low growth is compatible, even in rich countries, with environmental constraints. The first point is immaterial if the limits are scientifically real. It is an inconvenient reality that cannot be spun away. The second point is a claim that must be backed with evidence, it cannot simply be asserted.

And while I have yet to see any figures to illustrate how growth in rich countries can, in perpetuity, be compatible with environmental limits, several assessments point to the opposite conclusion. The Tyndall Centre for Climate Change Research at Manchester University found that to prevent dangerous global warming, economic growth in rich countries would not be possible. With colleagues at nef, I came to a similar conclusion.

Jacobs quotes, admiringly, the work of Tim Jackson on "prosperity without growth" with the former government advisory body the Sustainable Development Commission. Yet Jackson's work too, as the name suggests, foresees a future without growth.

Work by the Stockholm Resilience Centre on environmental "planetary boundaries" shows several have already been transgressed, requiring large absolute reductions of consumption in rich countries.

One thing is sure: advocates of growth need to be able to show not only that environmental impact can be cancelled out by efficiency and resource substitution, but that deep, absolute reductions in resource use can be achieved simultaneously, and that such gains can be made year, after year, after year, ad infinitum.

A key insight by the original MIT group was the problem of time lag. Environmental problems became obvious and were acted on too late. Damage became locked in. This is the moment we are now living through. Nasa climate scientist James Hansen recently pointed out that if the rich world had started reducing emissions as recently as 2007, the annual reductions necessary would have been 3%. Wait until next year and the figure rises to 6%, wait further until 2020 and the annual target leaps to a staggering 15% reduction per year.

Bear in mind that the Stern Review on the economics of climate changefound that annual emissions reductions greater than 1% have "been associated only with economic recession or upheaval".

There are many problematic issues to do with growth that can't be covered here. Clinging to growth, however, suffocates the imagination needed to devise more convivial ways to share a finite planet. At the very least, and with so much evidence to the contrary, the burden of proof now lies heavily on those who reject the original message of the Limits report, for them to demonstrate how, and under what circumstances, we could possibly enjoy "growth forever" in a finite world. Kenneth Boulding, the founder of general systems theory, thought this to be a view held only by "madmen and economists".