“The only function of economic forecasting is to make astrology look respectable,” one of the many wise and witty sayings of John Kenneth Galbraith whose centenary we celebrate this month. I still have my dog eared penguins of his classic texts - for the first time I had found a readable economist! When probably the greatest Canadian died in April 2006 the Chancellor of the Exchequer was quick to pay tribute, he "was a brilliant economist and writer and a great friend of the United Kingdom, and his books will be widely read in generations to come."
Gordon Brown is now discovering as Galbraith put it that, “politics is not the art of the possible. It consists in choosing between the disastrous and the unpalatable”. In retrospect it’s a pity Brown did not read Galbraith’s work more assiduously. At least it would have enriched his economic vocabulary with phrases like "the conventional wisdom", “countervailing power”, the "technostructure" and the "affluent society" instead of just stating it’s the right thing to do he would have been able to explain why.
He was born on October 15th 1908 on the north shore of Lake Erie, in Iona Station, Ontario, the only place where to be a ‘scotch’ is not to be a drink. His 1964 book, the Scotch, explains that the southern Ontario farmland was occupied by Scots driven from the Highlands by the clearances and therefore sworn enemies of the Tories. A trait he carried throughout his life as he said, “the modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness”.
Galbraith is remarkably ‘quotable’ when asked if Galbraith’s work would last. Amartya Sen, economist and Nobel laureate, said read The Affluent Society it showed a “great insight,” which “has become so much a part of our understanding of contemporary capitalism that we forget where it began. It’s like reading Hamlet and deciding it’s full of quotations. You realize where they came from”.
As he wrote in the Affluent Society, "People are the common denominator of progress. So... no improvement is possible with unimproved people, and advance is certain when people are liberated and educated. It would be wrong to dismiss the importance of roads, railroads, power plants, mills, and the other familiar furniture of economic development.... But we are coming to realize... that there is a certain sterility in economic monuments that stand alone in a sea of illiteracy. Conquest of illiteracy comes first".
Of course “conventional wisdom” has kept him out of fashion for twenty years but now as he said “the enemy of the conventional wisdom is not ideas but the march of events” and his book the Great Crash 1929 is a best seller again. It is not too late for us to learn from him, “the salary of the chief executive of a large corporation is not a market award for achievement. It is frequently in the nature of a warm personal gesture by the individual to himself” or “the process by which banks create money is so simple that the mind is repelled”.
His great works like American Capitalism, the Affluent Society and the New Industrial State; show a far from dismal science. He criticised economic theory for ignoring and obscuring the economic power of large corporations. He criticised politicians who aligned themselves with the objectives of the large corporation instead of acting in the public interest. He also censured his fellow economists as ‘idiot savants’ who perform sophisticated mathematical analysis but make no attempt to understand the real world.
"The emancipation of belief," he wrote, "is the most formidable of the tasks of reform, the one on which all else depends." His weapons in leading that struggle did not always please his fellow economists; they included irony, satire, and laughter as he said “the conventional view serves to protect us from the painful job of thinking”.
Galbraith stood out from his profession like much of academic thinking economics has spent decades insulating itself behind impenetrable language, building abstraction upon abstraction using equations and models to build worlds of perfect competition and rational actors.
“It is my guiding confession that I believe the greatest error in economics is in seeing the economy as a stable, immutable structure”, he said and “it is a far, far better thing to have a firm anchor in nonsense than to put out on the troubled sea of thought.”
Galbraith made it his life long quest to expose business's capacity for self-deception; “When you see reference to a new paradigm you should always, under all circumstances, take cover. Because ever since the great tulipmania in 1637, speculation has always been covered by a new paradigm. There was never a paradigm so new and so wonderful as the one that covered John Law and the South Sea Bubble — until the day of disaster”. As he said, “faced with the choice between changing one's mind and proving that there is no need to do so, almost everyone gets busy on the proof”.
When interviewed about his last short monograph, the Economics of Innocent Fraud (1999) he said, “It deals with all of the things we do, in an innocent way, to cover up the truth. I begin with the renaming of the system. It used to be capitalism. But that evokes Marx and Rockefeller. So now we speak of the market system. That is a nice bland expression, which forgets those off-color references. Then I write about work. We talk of the enormous virtues of work, but it turns out that that is mostly for the poor. If you're rich enough or if you're a college professor, the virtue lies in leisure and the use you make of your leisure time. Next, I go on to the stock market, where I show, I think without a doubt, that what is called "financial genius" is merely a rising market. That whole effort has given me a good deal of pleasure”.
The vindication of the final uncovering of that fraud would undoubtedly bring Galbraith pleasure just as surely as it brings misery to millions. Although I still remember how he bought me pleasure when he was cavorting with Bette Midler on the Michael Parkinson show.
As he pointed out, "In all life one should comfort the afflicted, but verily, also, one should afflict the comfortable, and especially when they are comfortably, contentedly, even happily wrong".
Tuesday, 28 October 2008
Friday, 24 October 2008
Our Mutual Friends in the North
Events have turned the world upside down in the provision of financial services. It is crystal clear that the demutualisation, the conversion of Building Societies into banks has been a total disaster. Building Societies have not been immune to the global banking crisis but their record compared to those that took the route of transition into banks is stark. There are the high profile collapses like Northern Rock, HBOS and Bradford and Bingley. But not one of the converted building societies has survived as a viable independent business.
Many of us argued this was a mistake from the start. Some time ago the All Party Parliamentary Group for Building Societies and Financial Mutual’s under took an enquiry into the true costs of demutualisation. In evidence the Building Societies Association said it would not be surprised if the full costs of all the demutualisation’s amounted to well over £1billion. Well we now know that was just the first billion!
That cost did not include the loss of over a quarter of their branch networks. There are technical arguments about the merits or demerits of mutuals over plcs but current events have more than demonstrated the merits of mutuality.
Greed and privatisation did not just take out those ex-building societies we also lost the Trustee Savings Bank and The National Giro Bank. Almost every City had a Trustee Savings bank; my own personal favourite was the Birmingham Municipal Bank which at its peak had three quarters of a million account holders. Following amalgamation in the 1970’s to form the national TSB it in turn disappeared into the private sector when it merged with Lloyds in 1995. The National Giro bank started out in 1968 as the “people’s bank” an innovative post office bank that was the first to pay interest on current accounts. It too succumbed to privatisation being swallowed by the Alliance and Leicester now part of Spanish banking giant Santander.
Now we have the chance to turn the tide against privatisation. The demand was made loud and clear at the Co-op Party conference that we must start a massive campaign for the remutualisation of Northern Rock.
Northern Rock will be slimmed down in public ownership but will still have all the flaws of a mortgage bank and will be no more sustainable in the private sector than it was before the government bail out. The Government will then look to sell the remnants off to a major bank and it will disappear as an independent institution.
When “greed was good” demutualisation was relatively simple – first bribe the management and then the members and get them to vote for a flotation. Remutualisation is more complex but not impossible.
Last year Britannia Building Society successfully remutualised 850,000 customers of the old Bristol and West Building Society which had been taken over by the Bank of Ireland. In buying the 65 strong Bristol & West branch network and £4.5bn savings book from the Bank of Ireland for £150m the customers became members once again.
Interestingly the Britannia is now in talks with Co-op Financial Services which includes The Co-op Bank, Smile and CIS about a possible merger. The Co-op Bank owned by the Co-op Group is not in itself a Co-op itself and this potential merger depends on changes to the Building Societies (Funding) & Mutual Societies (Transfers) Act, which is currently at the House of Commons committee stage. Legislation is expected to be in place by the end of the year.
So it will be possible for mutual’s to take on and remutualise failed mortgage banks - we have to begin to make this the preferred option for the Government. We have to turn the tide in favour of social ownership.
“Now is the time, in the wake of the collapse of Northern Rock and the wider economic downturn to reinvigorate the debate about social ownership in the 21st century”, says John McDonnell in the new Left Economics Advisory Panel pamphlet, Building the New Common Sense, Social Ownership for the 21st Century. He adds, “We need to be creative, imaginative and bold in our demands and our actions – and that means tackling the fundamental question of ownership.” I could not agree more and let us start by giving Northern Rock back to the people of the North East!
Many of us argued this was a mistake from the start. Some time ago the All Party Parliamentary Group for Building Societies and Financial Mutual’s under took an enquiry into the true costs of demutualisation. In evidence the Building Societies Association said it would not be surprised if the full costs of all the demutualisation’s amounted to well over £1billion. Well we now know that was just the first billion!
That cost did not include the loss of over a quarter of their branch networks. There are technical arguments about the merits or demerits of mutuals over plcs but current events have more than demonstrated the merits of mutuality.
Greed and privatisation did not just take out those ex-building societies we also lost the Trustee Savings Bank and The National Giro Bank. Almost every City had a Trustee Savings bank; my own personal favourite was the Birmingham Municipal Bank which at its peak had three quarters of a million account holders. Following amalgamation in the 1970’s to form the national TSB it in turn disappeared into the private sector when it merged with Lloyds in 1995. The National Giro bank started out in 1968 as the “people’s bank” an innovative post office bank that was the first to pay interest on current accounts. It too succumbed to privatisation being swallowed by the Alliance and Leicester now part of Spanish banking giant Santander.
Now we have the chance to turn the tide against privatisation. The demand was made loud and clear at the Co-op Party conference that we must start a massive campaign for the remutualisation of Northern Rock.
Northern Rock will be slimmed down in public ownership but will still have all the flaws of a mortgage bank and will be no more sustainable in the private sector than it was before the government bail out. The Government will then look to sell the remnants off to a major bank and it will disappear as an independent institution.
When “greed was good” demutualisation was relatively simple – first bribe the management and then the members and get them to vote for a flotation. Remutualisation is more complex but not impossible.
Last year Britannia Building Society successfully remutualised 850,000 customers of the old Bristol and West Building Society which had been taken over by the Bank of Ireland. In buying the 65 strong Bristol & West branch network and £4.5bn savings book from the Bank of Ireland for £150m the customers became members once again.
Interestingly the Britannia is now in talks with Co-op Financial Services which includes The Co-op Bank, Smile and CIS about a possible merger. The Co-op Bank owned by the Co-op Group is not in itself a Co-op itself and this potential merger depends on changes to the Building Societies (Funding) & Mutual Societies (Transfers) Act, which is currently at the House of Commons committee stage. Legislation is expected to be in place by the end of the year.
So it will be possible for mutual’s to take on and remutualise failed mortgage banks - we have to begin to make this the preferred option for the Government. We have to turn the tide in favour of social ownership.
“Now is the time, in the wake of the collapse of Northern Rock and the wider economic downturn to reinvigorate the debate about social ownership in the 21st century”, says John McDonnell in the new Left Economics Advisory Panel pamphlet, Building the New Common Sense, Social Ownership for the 21st Century. He adds, “We need to be creative, imaginative and bold in our demands and our actions – and that means tackling the fundamental question of ownership.” I could not agree more and let us start by giving Northern Rock back to the people of the North East!
Friday, 17 October 2008
Good as Gould
It was good to hear from Bryan Gould in the Guardian recently. He began his excellent book, ‘A Future for Socialism’, back in 1989 with, “The Thatcherite experiment is now approaching its end”.
Sadly it has taken almost a further twenty years for that statement to be confirmed. And what a tragedy that now millions of people will lose their jobs and thousands more will lose homes, savings and pensions to show Gould’s analysis and prescription to be spot on.
The economic crisis has lead some to look back to see where it all went wrong. Gordon Browns bank nationalisation has reminded people of the 2003 Manifesto. On rereading it is far less suicidal than Peter Mandelson’s 1998 proclamation that new Labour was ‘intensely relaxed about people getting filthy rich’.
It is worth remembering that Michael Foot lost that election not on economic policy but because of the Falklands War. Many will be surprised to hear that his successor Neil Kinnock wrote quite a good book on economics. ‘Making Our Way’ was published in 1986 and it’s not bad. He wrote, “The Labour Party’s economic priority is to expand investment – in industry, in ideas and in people – and to form a partnership for production between, government managers and workers committed to the modernisation of economy and society”.
It was Gould however, the face of the 1987 election, who was the most articulate in presenting the case for modern socialism. He argued in ‘A Future for Socialism’ that;
“The concession that full employment could no longer be the central objective of economic policy was of profound significance. It fundamentally undermined the post- war accommodation of capital and labour. Labour – even- organised labour – was dealt at severe blow. The balance of advantage in the labour market swung decisively to the employer.
The implications are wider still. If the government was now powerless to intervene in the workings of the labour market, and if economic policy as a whole was now to be defined in terms of what is acceptable to the money markets – if in other words markets alone were to determine outcome in these central parts of the economy – why should not markets not also prevail in other spheres of policy? If markets were to be trusted to produce the right results in economic policy, why not in education, or housing, or health care? So it was the Left sold the pass and lost the argument”.
How right he was he was also dead right that Britain had fallen in to habit of, “giving absolute priority to those who held assets and dealt in money, as opposed to those who made and provided goods and services and tried to sell them in international markets”.
Unfortunately when he ran for Labour leader there where few Gouldites and his anti-EU stance was against the grain of the time. So instead of following his prescription we followed a different one from the Cannon and Ball of contemporary economic thinking,
“For a time, it appeared as though Thatcherism’s harsh medicine and ‘enterprise culture’ had produced the great economic leap forward that Britain needed. In the 1990’s Britain can boast of some notable economic strengths – for example the resilience and internationalisation of our top companies; our strong industries like pharmaceuticals, aerospace, retailing and media; the pre-eminence of the City of London”.
Yes that’s Mandelson and Liddel, in ‘The Blair Revolution’, in 1996. Of course we may have had more such companies if we had not had Thatcher’s ‘enterprise culture’!
As recently as 1995 in the introduction to ‘The City in Europe and the World’ he argued that the City was the ‘economic powerhouse of Europe’ and urged Germany to become more like Britain. God forbid. Mandelson once gave the Churchill lecture in Berlin he could have done with Churchill’s comment, “I would rather see finance less proud and industry more content”.
Now the crisis is turning conventional wisdom on its head its time to state some facts firstly a deregulated city has had a license to print money yet now we need it can’t be found, secondly a healthy retail sector is a result of wealth not is cause, and a house is a place to live not a cash point.
Now the money lenders are being thrown out of the temple its time to look again at Gould’s ideas. This crisis is a turning point. The country is crying out for change lets not repeat our mistakes lets follow Gould’s advice;
“A Labour Government that wished to meet the twin objectives of managing the economy efficiently and putting socialist principles into practice would have to be clear that this bias in favour of financial orthodoxy must be reversed. Giving priority to the wealth creators is not in itself socialism, and it would require a radical departure from past practice and attitudes. It would take a Labour chancellor to be clear that it was the real economy, rather than the money economy that mattered, and it was our task to serve the interests of those who created real wealth”.
Sadly it has taken almost a further twenty years for that statement to be confirmed. And what a tragedy that now millions of people will lose their jobs and thousands more will lose homes, savings and pensions to show Gould’s analysis and prescription to be spot on.
The economic crisis has lead some to look back to see where it all went wrong. Gordon Browns bank nationalisation has reminded people of the 2003 Manifesto. On rereading it is far less suicidal than Peter Mandelson’s 1998 proclamation that new Labour was ‘intensely relaxed about people getting filthy rich’.
It is worth remembering that Michael Foot lost that election not on economic policy but because of the Falklands War. Many will be surprised to hear that his successor Neil Kinnock wrote quite a good book on economics. ‘Making Our Way’ was published in 1986 and it’s not bad. He wrote, “The Labour Party’s economic priority is to expand investment – in industry, in ideas and in people – and to form a partnership for production between, government managers and workers committed to the modernisation of economy and society”.
It was Gould however, the face of the 1987 election, who was the most articulate in presenting the case for modern socialism. He argued in ‘A Future for Socialism’ that;
“The concession that full employment could no longer be the central objective of economic policy was of profound significance. It fundamentally undermined the post- war accommodation of capital and labour. Labour – even- organised labour – was dealt at severe blow. The balance of advantage in the labour market swung decisively to the employer.
The implications are wider still. If the government was now powerless to intervene in the workings of the labour market, and if economic policy as a whole was now to be defined in terms of what is acceptable to the money markets – if in other words markets alone were to determine outcome in these central parts of the economy – why should not markets not also prevail in other spheres of policy? If markets were to be trusted to produce the right results in economic policy, why not in education, or housing, or health care? So it was the Left sold the pass and lost the argument”.
How right he was he was also dead right that Britain had fallen in to habit of, “giving absolute priority to those who held assets and dealt in money, as opposed to those who made and provided goods and services and tried to sell them in international markets”.
Unfortunately when he ran for Labour leader there where few Gouldites and his anti-EU stance was against the grain of the time. So instead of following his prescription we followed a different one from the Cannon and Ball of contemporary economic thinking,
“For a time, it appeared as though Thatcherism’s harsh medicine and ‘enterprise culture’ had produced the great economic leap forward that Britain needed. In the 1990’s Britain can boast of some notable economic strengths – for example the resilience and internationalisation of our top companies; our strong industries like pharmaceuticals, aerospace, retailing and media; the pre-eminence of the City of London”.
Yes that’s Mandelson and Liddel, in ‘The Blair Revolution’, in 1996. Of course we may have had more such companies if we had not had Thatcher’s ‘enterprise culture’!
As recently as 1995 in the introduction to ‘The City in Europe and the World’ he argued that the City was the ‘economic powerhouse of Europe’ and urged Germany to become more like Britain. God forbid. Mandelson once gave the Churchill lecture in Berlin he could have done with Churchill’s comment, “I would rather see finance less proud and industry more content”.
Now the crisis is turning conventional wisdom on its head its time to state some facts firstly a deregulated city has had a license to print money yet now we need it can’t be found, secondly a healthy retail sector is a result of wealth not is cause, and a house is a place to live not a cash point.
Now the money lenders are being thrown out of the temple its time to look again at Gould’s ideas. This crisis is a turning point. The country is crying out for change lets not repeat our mistakes lets follow Gould’s advice;
“A Labour Government that wished to meet the twin objectives of managing the economy efficiently and putting socialist principles into practice would have to be clear that this bias in favour of financial orthodoxy must be reversed. Giving priority to the wealth creators is not in itself socialism, and it would require a radical departure from past practice and attitudes. It would take a Labour chancellor to be clear that it was the real economy, rather than the money economy that mattered, and it was our task to serve the interests of those who created real wealth”.
Tuesday, 7 October 2008
Once, Twice, Three Times a Mandy
Dear Editor, Oh despair! Is Gordon Brown mad? Peter Mandelson represents all that is wrong with the Labour Party and as a consequence the British economy today. He is the architect of the hubris that lead Labour to swallow the Thatcherite mantra of deregulation and liberalisation regardless of its consequences. Slavish support for the so called "wealth creators" who have turned out to be no more that spivs and hucksters. We are not choosing to shut down financial globalisation as he puts it (Guardian 3/10/08). It is closing down because it was built on sand. When I worked to bring business and Labour together for a better understanding of one another before the 1997 election I said that Labour had gone from being anti-business to pro-business without an intervening period of understanding. How true that has turned out to be. Now Brown is creating new mega banks from the collapse of the unregulated secondary banking system. We are moving from a
position in which we had Banks that we could not afford to let fail to Banks we will not be able to afford to save. This crisis has only just begun and the last thing we need are new Labour cliches about globalisation is good for you when all that has happened is that with the conivance of governments like the one here in Britain international businesses have been allowed to escape any effective regulation.
Letter to the Guardian Published October 4th 2008
position in which we had Banks that we could not afford to let fail to Banks we will not be able to afford to save. This crisis has only just begun and the last thing we need are new Labour cliches about globalisation is good for you when all that has happened is that with the conivance of governments like the one here in Britain international businesses have been allowed to escape any effective regulation.
Letter to the Guardian Published October 4th 2008
Co-operators go back to School
A big issue at the Co-op Party conference was the role the movement should play in education. Co-operators have always had a commitment to education, an original Rochdale principle, was to the education of “their members, officers and employees and of the general public in the principles and techniques of Co-operation, both economic and democratic.”
In April the first co-operative trust school, Reddish Vale Technology College in Stockport, opened, and the second Andrew Marvel College in Hull is set to open soon. Schools Minister, Ed Balls, speaking at Co-op conference said the Government will make £500,000 available to pilot up to a 100 Trusts with the co-operative governance model.
One of the architects of the model, Mervyn Wilson, Co-op College CEO, hopes for a national chain of co-op trust schools and believes that “using co-operative values to raise achievement”, will help meet the governments’ aim of increasing diversity in the education system. Co-op Group CEO, Peter Marks, is also enthusiastic about the potential for co-op structures to allow stakeholders greater participation in school management “and a sense of ownership and engagement”.
In the August issue of the Journal of Co-op studies Professor Johston Birchall makes an important contribution to the debate about mutuality in the public services. He argues that ideas about a ‘new mutualism’ in the public services have three potential weaknesses, firstly that genuine mutuality, which implies solidarity and collective provision, is in competition with ideas favouring a more individualistic approach – like the personalisation of services, secondly that it is seen as an attempt to restore some of the benefits of mutual forms of welfare lost when the welfare state was founded without explaining what those benefits are - after all the performance of the old friendly societies was patchy to say the least and thirdly the reforms to public services hailed as mutual are not really all that mutual.
If we define mutuals as membership based organisations then in the public services who are the members and how much power do they have? Foundation hospitals, for example, have three categories of member each with their own representatives, patients, the public and the employees and their control over the nature and provision of services is strictly limited. These are substantial criticisms that require serious answers if mutual solutions are to play any part in the public services.
There was considerable disquiet at Co-op Party conference about aspects of the governments’ education policies including faith schools and the drive for trust schools and academies. Indeed Co-op MP Ken Purchase has tabled a Commons motion attacking the expansion of city academies, expressing disappointment that "Ed Balls should have been taken in by this nonsense spouted about the improvements in academies when there is no real evidence to show they can do anything at all, unless they have huge tranches of money that should be available in the education system generally".
Co-operators will come together to discus and learn more about what the co-op role in education should be at a day conference hosted by the Midlands Co-op Society at the Birmingham and Midland Institute on November 8th.
Personally working in a University before we try to mutualise the state sector there is plenty of work to be done. There is little teaching of the values and operation of non-plc structures in our business schools with widespread ignorance of co-ops and mutuals, and also of trusts and partnerships. This is a gap that the movement needs to fill if mutual business solutions are to become more widespread.
Meanwhile this years Co-op Party conference was a great success, don’t take my word for it, that was the view of Socialist Campaign Group News, its worth quoting ‘Tel’s Tale’ in full.
“The recent Co-op Party annual conference was a refreshing change from the mind-numbing world of new Labour. Delegates debated a wide range of resolutions, adopted a swath of progressive policies, including withdrawal from Iraq and Afghanistan, no war against Iran, an early solution to the illegal armed Israeli occupation of Palestine. UK Co-ops were encouraged to build links with Co-ops in Palestine. Conference called for the strengthening of the UN and advocated that Britain starts a drive for global nuclear disarmament under its obligations under the Non-Proliferation Treaty, together with withdrawal from NATO. Delegates agreed that the Co-op Party should celebrate the 50th anniversary and achievements of the Cuban revolution, and intensify the campaign against the US blockade. Local Party councils were encouraged to affiliate to the Cuba Solidarity Campaign. The conference called on the party’s parliamentary group to oppose the building of any more nuclear power stations.
Among other good policies, delegates supported Northern Rock being turned into a mutual, instructed the party’s NEC to conduct an enquiry into NHS foundation trusts, to see whether they are sufficiently democratic and cooperative, and calls for the phasing out of faith schools. The coop party has getting on for 10,000 members, and every SCGN reader should join up.”
Sound advice!
In April the first co-operative trust school, Reddish Vale Technology College in Stockport, opened, and the second Andrew Marvel College in Hull is set to open soon. Schools Minister, Ed Balls, speaking at Co-op conference said the Government will make £500,000 available to pilot up to a 100 Trusts with the co-operative governance model.
One of the architects of the model, Mervyn Wilson, Co-op College CEO, hopes for a national chain of co-op trust schools and believes that “using co-operative values to raise achievement”, will help meet the governments’ aim of increasing diversity in the education system. Co-op Group CEO, Peter Marks, is also enthusiastic about the potential for co-op structures to allow stakeholders greater participation in school management “and a sense of ownership and engagement”.
In the August issue of the Journal of Co-op studies Professor Johston Birchall makes an important contribution to the debate about mutuality in the public services. He argues that ideas about a ‘new mutualism’ in the public services have three potential weaknesses, firstly that genuine mutuality, which implies solidarity and collective provision, is in competition with ideas favouring a more individualistic approach – like the personalisation of services, secondly that it is seen as an attempt to restore some of the benefits of mutual forms of welfare lost when the welfare state was founded without explaining what those benefits are - after all the performance of the old friendly societies was patchy to say the least and thirdly the reforms to public services hailed as mutual are not really all that mutual.
If we define mutuals as membership based organisations then in the public services who are the members and how much power do they have? Foundation hospitals, for example, have three categories of member each with their own representatives, patients, the public and the employees and their control over the nature and provision of services is strictly limited. These are substantial criticisms that require serious answers if mutual solutions are to play any part in the public services.
There was considerable disquiet at Co-op Party conference about aspects of the governments’ education policies including faith schools and the drive for trust schools and academies. Indeed Co-op MP Ken Purchase has tabled a Commons motion attacking the expansion of city academies, expressing disappointment that "Ed Balls should have been taken in by this nonsense spouted about the improvements in academies when there is no real evidence to show they can do anything at all, unless they have huge tranches of money that should be available in the education system generally".
Co-operators will come together to discus and learn more about what the co-op role in education should be at a day conference hosted by the Midlands Co-op Society at the Birmingham and Midland Institute on November 8th.
Personally working in a University before we try to mutualise the state sector there is plenty of work to be done. There is little teaching of the values and operation of non-plc structures in our business schools with widespread ignorance of co-ops and mutuals, and also of trusts and partnerships. This is a gap that the movement needs to fill if mutual business solutions are to become more widespread.
Meanwhile this years Co-op Party conference was a great success, don’t take my word for it, that was the view of Socialist Campaign Group News, its worth quoting ‘Tel’s Tale’ in full.
“The recent Co-op Party annual conference was a refreshing change from the mind-numbing world of new Labour. Delegates debated a wide range of resolutions, adopted a swath of progressive policies, including withdrawal from Iraq and Afghanistan, no war against Iran, an early solution to the illegal armed Israeli occupation of Palestine. UK Co-ops were encouraged to build links with Co-ops in Palestine. Conference called for the strengthening of the UN and advocated that Britain starts a drive for global nuclear disarmament under its obligations under the Non-Proliferation Treaty, together with withdrawal from NATO. Delegates agreed that the Co-op Party should celebrate the 50th anniversary and achievements of the Cuban revolution, and intensify the campaign against the US blockade. Local Party councils were encouraged to affiliate to the Cuba Solidarity Campaign. The conference called on the party’s parliamentary group to oppose the building of any more nuclear power stations.
Among other good policies, delegates supported Northern Rock being turned into a mutual, instructed the party’s NEC to conduct an enquiry into NHS foundation trusts, to see whether they are sufficiently democratic and cooperative, and calls for the phasing out of faith schools. The coop party has getting on for 10,000 members, and every SCGN reader should join up.”
Sound advice!
Thursday, 25 September 2008
Energy and the Question of Ownership
In just one day - the most right wing US administration in living memory calls on Congress for billions of dollars to bail out the US financial system, the Portuguese launch the world’s first wave power plant and British Energy becomes French.
So we no longer have any ownership of our energy infrastructure. There are a lot of clichés we hear everyday from politicians these days. Three of my favourites are, “we will learn the lessons”, “the family have been informed” and “ownership does not matter”.
The last one we is a catchphrase of Business Secretary John Hutton. We never heard it when they were talking about housing of course. Forcing people to buy houses they could not afford is the main source of the current mess.
Mind it’s not a phrase you hear from people who actually own things like Warren Buffet or Lakshi Mittel or from the French for that matter. They will now have a constant stream of profits from their UK energy business. Every time we turn on the lights cash will stream across the channel.
The business secretary says this is good for Britain. I suppose from where we are it is. He has persuaded a foreign firm with some intellectual property to take over and run yet another dead British industry. So now we will get four new French nuclear power stations.
Today the UK economy is a bit like Wimbledon. We never win, but we put on a good show. All the prize money goes overseas but if we are lucky we get to stand on the hill watching it go on the big screen.
In this Alice in Wonderland world we are the winners. The stupid French have cheaper energy than us because they foolishly failed to embrace the market and invested in their energy industry for the long term. Now they have a product they can export across the world and reap the reward. Just how silly is that!
Meanwhile the global energy giants we have put our faith in are refusing to invest in UK renewables because as private firms they see more lucrative investments in existing energy sources elsewhere. To most observers the UK is facing a looming energy gap. But because of our obsession with not bucking the market we stand a good chance of being bucked by it.
Portugal has no indigenous carbon energy sources and yet has managed to obtain over half its energy from renewables. Locked into free-market dogma progress in the UK has been pitiful. We can begin to turn this around in October when the Energy Bill comes back to the commons. MP’s can give renewables the support they need with some preferential feed in tariffs to give them the certainty they need to invest.
But we need to go much further. The current global crisis in the banking sector shows the limits of regulation. When oil was discovered in the North Sea, we soon realised that it was going to be a long term and risky business bringing it to shore, we established a public sector business to undertake this challenge -The British National Oil Corporation. If we are to take on the challenge of developing a serious renewables industry particularly in the capital intensive wave and tide power arena we will need a similar public sector champion.
We need a British National Renewables Corporation.
Unlike the wind you can set your watch by the tides around Britain’s coast and if the Portuguese can harness wave power so can we. With a global shortage of credit we cannot wait for the private sector to come to the rescue.
The banks are being saved by ‘nationalisation’ in the USA and now our nuclear industry is being ‘nationalised’ by the French. If we want a significant renewables sector its early stage of development will require a large scale public sector solution believe me it will be a better long term investment than Northern Rock.
And this time we will have to do it ourselves.
So we no longer have any ownership of our energy infrastructure. There are a lot of clichés we hear everyday from politicians these days. Three of my favourites are, “we will learn the lessons”, “the family have been informed” and “ownership does not matter”.
The last one we is a catchphrase of Business Secretary John Hutton. We never heard it when they were talking about housing of course. Forcing people to buy houses they could not afford is the main source of the current mess.
Mind it’s not a phrase you hear from people who actually own things like Warren Buffet or Lakshi Mittel or from the French for that matter. They will now have a constant stream of profits from their UK energy business. Every time we turn on the lights cash will stream across the channel.
The business secretary says this is good for Britain. I suppose from where we are it is. He has persuaded a foreign firm with some intellectual property to take over and run yet another dead British industry. So now we will get four new French nuclear power stations.
Today the UK economy is a bit like Wimbledon. We never win, but we put on a good show. All the prize money goes overseas but if we are lucky we get to stand on the hill watching it go on the big screen.
In this Alice in Wonderland world we are the winners. The stupid French have cheaper energy than us because they foolishly failed to embrace the market and invested in their energy industry for the long term. Now they have a product they can export across the world and reap the reward. Just how silly is that!
Meanwhile the global energy giants we have put our faith in are refusing to invest in UK renewables because as private firms they see more lucrative investments in existing energy sources elsewhere. To most observers the UK is facing a looming energy gap. But because of our obsession with not bucking the market we stand a good chance of being bucked by it.
Portugal has no indigenous carbon energy sources and yet has managed to obtain over half its energy from renewables. Locked into free-market dogma progress in the UK has been pitiful. We can begin to turn this around in October when the Energy Bill comes back to the commons. MP’s can give renewables the support they need with some preferential feed in tariffs to give them the certainty they need to invest.
But we need to go much further. The current global crisis in the banking sector shows the limits of regulation. When oil was discovered in the North Sea, we soon realised that it was going to be a long term and risky business bringing it to shore, we established a public sector business to undertake this challenge -The British National Oil Corporation. If we are to take on the challenge of developing a serious renewables industry particularly in the capital intensive wave and tide power arena we will need a similar public sector champion.
We need a British National Renewables Corporation.
Unlike the wind you can set your watch by the tides around Britain’s coast and if the Portuguese can harness wave power so can we. With a global shortage of credit we cannot wait for the private sector to come to the rescue.
The banks are being saved by ‘nationalisation’ in the USA and now our nuclear industry is being ‘nationalised’ by the French. If we want a significant renewables sector its early stage of development will require a large scale public sector solution believe me it will be a better long term investment than Northern Rock.
And this time we will have to do it ourselves.
Wednesday, 17 September 2008
Cuba, Co-op's and Hurricanes
Each day I enjoy a co-operative and fair-trade breakfast of coffee, muesli and banana and raise a glass to Cuba. Not because new Labour has driven me to drink - my toast is not with rum but with Cuban orange juice.
In the 1980’s Cuba was the world’s largest citrus fruit exporter. The end of the USSR took away their main market and put them in direct competition with two of the big citrus fruit exporters the USA and Israel.
Today Cuba is the world’s laboratory for sustainable farming and food sovereignty – the World Bank has described it as “almost the anti-model”- pursuing an approach that links ecology with the decentralisation of the control of farms. Co-operatives are playing a key part in these developments.
The US blockade makes market access crucial. In 2000, Traidcraft, the Christian based fair trade organisation stepped in to help seven co-operatives in and around Ciego de Avila find new markets and help them to win Fair-trade status. Working alongside Gerber foods they are bringing first class Cuban fruit juices to European consumers and in developing the Fruit Passion brand aim to do for fruit juice what Café Direct has done for fair-trade coffee.
Modern consumers are increasingly concerned about the provenance of what they buy from the developing world and thanks to the Fairtrade Foundation there has been a huge increase in quality making the fair trade an easier choice to make. Fair-trade is not socialism but the Fair-trade mark does guarantee farmers a minimum price and an additional 'premium' payment. In Cuba the premium is used for projects that benefit the co-operatives - better machinery, vehicles, irrigation systems etc. or to finance other activities including cultural and recreational facilities.
The Association of Small Farmers (ANAP) representing the interests of co-operatives and individual farmers are also working to increase the involvement of women in the farms and their decision making processes.
Last year I visited the region of Cuba where these co-ops are based and the extra income fair trade brings can make a real difference. One of the dreadful things about capitalism is the way the abstraction of the market separates consumers from producers.
Now Traidcraft are running meet the people tours to Cuba in November, February or March visiting the CPA and CCS Jose Marti Co-operatives in Ciego de Avila that produce the juice that is so welcome on our breakfast tables.
Writing in Granma, Fidel Castro, points out that the recent hurricanes have done between $3 and $4 billion dollars worth of damage to Cuba. Farmers have not escaped unscathed and to help their recovery the least we can do is buy some of their output. So why wait? You can find Fruit Passion in Co-op shops as well as in Sainsbury’s and Waitrose, also the Co-op’s own brand fair-trade orange juice includes Cuban product in the blend.
Of course the concept of fair trade is not new. Back in 1906 the first Labour MP’s cited John Ruskin as the author who had most shaped their thinking. Ruskin makes a plea for fair trade in ‘Unto This Last’ published in 1862.
“In all buying, consider first, what condition of existence you cause in the production of what you buy; secondly whether the sum you have paid is just to the producer and in due proportion, lodged in his hands.”
Given the present shenanigans in the PLP it would seem that today the minds of some Labour MP’s seem to be shaped by an older writer than Ruskin – evidenced from their detachment of political expediency from morality – one Niccoli Machiavelli.
For details of Traidcraft trips to Cuba see: Meet the People Tours at www.Traidcraft.co.uk
In the 1980’s Cuba was the world’s largest citrus fruit exporter. The end of the USSR took away their main market and put them in direct competition with two of the big citrus fruit exporters the USA and Israel.
Today Cuba is the world’s laboratory for sustainable farming and food sovereignty – the World Bank has described it as “almost the anti-model”- pursuing an approach that links ecology with the decentralisation of the control of farms. Co-operatives are playing a key part in these developments.
The US blockade makes market access crucial. In 2000, Traidcraft, the Christian based fair trade organisation stepped in to help seven co-operatives in and around Ciego de Avila find new markets and help them to win Fair-trade status. Working alongside Gerber foods they are bringing first class Cuban fruit juices to European consumers and in developing the Fruit Passion brand aim to do for fruit juice what Café Direct has done for fair-trade coffee.
Modern consumers are increasingly concerned about the provenance of what they buy from the developing world and thanks to the Fairtrade Foundation there has been a huge increase in quality making the fair trade an easier choice to make. Fair-trade is not socialism but the Fair-trade mark does guarantee farmers a minimum price and an additional 'premium' payment. In Cuba the premium is used for projects that benefit the co-operatives - better machinery, vehicles, irrigation systems etc. or to finance other activities including cultural and recreational facilities.
The Association of Small Farmers (ANAP) representing the interests of co-operatives and individual farmers are also working to increase the involvement of women in the farms and their decision making processes.
Last year I visited the region of Cuba where these co-ops are based and the extra income fair trade brings can make a real difference. One of the dreadful things about capitalism is the way the abstraction of the market separates consumers from producers.
Now Traidcraft are running meet the people tours to Cuba in November, February or March visiting the CPA and CCS Jose Marti Co-operatives in Ciego de Avila that produce the juice that is so welcome on our breakfast tables.
Writing in Granma, Fidel Castro, points out that the recent hurricanes have done between $3 and $4 billion dollars worth of damage to Cuba. Farmers have not escaped unscathed and to help their recovery the least we can do is buy some of their output. So why wait? You can find Fruit Passion in Co-op shops as well as in Sainsbury’s and Waitrose, also the Co-op’s own brand fair-trade orange juice includes Cuban product in the blend.
Of course the concept of fair trade is not new. Back in 1906 the first Labour MP’s cited John Ruskin as the author who had most shaped their thinking. Ruskin makes a plea for fair trade in ‘Unto This Last’ published in 1862.
“In all buying, consider first, what condition of existence you cause in the production of what you buy; secondly whether the sum you have paid is just to the producer and in due proportion, lodged in his hands.”
Given the present shenanigans in the PLP it would seem that today the minds of some Labour MP’s seem to be shaped by an older writer than Ruskin – evidenced from their detachment of political expediency from morality – one Niccoli Machiavelli.
For details of Traidcraft trips to Cuba see: Meet the People Tours at www.Traidcraft.co.uk
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