30 June 2011

Resist Divide-and-Conquer Tactics

The Tory rhetoric over today's strike is a clear attempt to divide and conquer. We are told that the poor downtrodden taxpayer is subsidising the fat cats of the public sector, and that private-sector pension schemes are poor and the public-sector schemes should be as poor. No attempt is made to argue that private companies should provide properly for their employees' retirement. We are to be set against each other, workers in private or public sector, taxpayers and public sectors workers, when it is quite apparent that most of us fall into more than one of these categories at once.

I am proud to be striking today. I am proud to be defending the right of myself and my colleagues to contribute a reasonable amount to dignity in old age, should we be lucky enough to get there. I was pleased to receive the instruction to strike from my rep., together with the helpful information that 'UCU believes the proposals are not only unfair, but totally unnecessary. The TPS was renegotiated in 2007 to make it affordable and sustainable over time. There is no crisis or deficit in the scheme. This is nothing more than an ideologically motivated attack by a government that wants us to pay for an economic crisis we did not create.'

The changes to pension contributions, which represents an increase of some 50% or about £150 per month, are actually a tax specifically on the public sector, the government's target of choice, to extract money to pay for the deficit caused by the banking crisis. Since our future pensions will be politically controlled there is no limit on the number of times the government can come back to us for more money, or how many times they can reduce our consitions, our pay, or our future pensions. No limit, that is, except our unified political resistance.

In The Great Transformation Karl Polanyi gives an interesting new perspective on the strike. If labour is to be distributed in a market, he argues, then the seller, i.e. the worker, has a perfect right not to sell until his price is reached. It is the absurdity of considering labour a commodity like any other that causes the strike to appear anomalous. Here is his lucid prose from p. 239:

'Actually, strikes in vital services and public utilities held the citizens to ransom while involving them in the libyrinthine problem of the true functions of a labor market. Labor is supposed to find its price on the market, and other price than that so established being uneconomical. As long as labor lives up to this responsibility, it will behave as an element in the supply of that which it is, the commodity "labor", and will refuse to sell below the price which the buyer can still afford to pay.

Consistently followed up, this means that the chief obligation of labor is to be almost continually on strike. . . The source of the incongruity of the theory and practice is, of course, that labor is not really a commodity, and that if labor was withheld merely in order to ascertain its exact price society would very soon dissolve for lack of sustenance. It is remarkable that this consideration is very rarely, if ever, mentioned in the discussion of the strike issue on the part of liberal economists.'

28 June 2011

Wales: A Co-operative Nation?

Since I'm a bit short of time I thought I would share a short speech I gave earlier today at a meeting in Cardiff Bay for the Assembly Cross-Party Co-operative Group.

Last week we had the Chief Executive of the co-operative development organisation in British Columbia giving a lecture called 'Co-operation and the Wealth of Nations' here in Cardiff, in fact in the building where I work at UWIC in Llandaff as part of a nationwide speaking tour. He made an interesting and important point about the failure of our economy in recent years and how this is linked to the failure of our political system.

Restakis looked back to the first half of the 19th century, when the franchise was extended beyond the wealthy elite and when the co-operative movement was founded. This parallel is not a coincidence, since both were a response to the development of capitalism and the way it concentrated power and resources in a small number of hands.

Restakis's conclusion was that, while we did gained the right to elect our government we did not see the extension of a similar level of democratic involvement in the economic sphere. And more importantly, he argued that so long as economic power is concentrated and unresponsive, it can feed back into our democratic system and poison it. Whether we think of the ownership of media outlets by the super-rich or the ability of politicians to use their influence to buy themselves well-paid directorships we see evidence of his argument all around us.

While I'm in the business of mentioning our impressive new teaching building I should tell you that the Co-operative Group will also be using it for their conference called Wales: A Co-operative Nation this coming weekend. I'd like to link this title to that of an inaugural lecture by one of our Professors, which he called 'Entrepreneurship: Do we have a word for it in Welsh?' This title had a question mark at the end of it, and I'd like to answer what may have been a rhetorical question with the word 'co-operation'.

When I wrote my thesis some ten years ago now I concluded that the reason successive entrepreneurship action plans had not been successful in Wales was that they focused on individual self-advancement, whereas the culture of Welsh people is that we should all advance together. I found during my research that the Branson model of enterprise was viewed as getting on at the expense of others and was widely despised. I coined the term 'associative entrepreneurship' to describe the creative energy that could be released through shared enterprise for the good of the community, and I used Tower Colliery as a practical example of this associative entrepreneurship.

The destructive impact of the globalised, autocratic economy has become clear in the past few years. Both the financial crisis and the economic crisis it has produced are consequences of economic power being in too few hands. They are also products of the 'myth of the market' which states, in the face of all historical evidence, that we no longer need politicians and that the market will solve all problems, that individual self-interested behaviour will lead us all to the promised land.

We are living in an important historical moment. The last time we saw an economic collapse on this scale it took the dislocation and suffering of the 1930s and the Second World War to put the uncontrolled market back into its box and the tensions in the Eurozone are indications of the sorts of passions that result from economic failure provoked by selfishness and greed.

I understand that I am not the only person who has been re-reading Karl Polanyi's account of this period, The Great Transformation. It is said that this book is also favoured reading for Ed Miliband's economic advisors and I sincerely hope that this is the case. Polanyi's favourite economist was Robert Owen. He argued that Owen was the only commentator of the time who recognised that we are primarily social rather than economic beings and to try to understand what this means in the era of an industrialised and complex society. His very practical answer was the co-operative movement.

So in closing I would like to emphasise another important point that was made by John Restakis and that is that what we need most as co-operators is to have the confidence that our model is what the world needs right now. And we need to use that confidence to argue for our model as the alternative that people are seeking. Whether as academics, through our political parties or in the media the time is right and we should have the confidence to propose co-operation as the expression of a revitalised democracy in the economic sphere.

24 June 2011

Market Myths: Perfect Information

The superiority of the market as a system of allocation for goods and services relies on a number of assumptions. It was the central theme of my 2006 book Market Schmarket that these assumptions no longer held in the highly developed globalised economy of the 21st century. This post is offers more evidence that this is so.

One area where this assumption is clearly being broken is in the purchase of train tickets. The hugely complex details about when many types of ticket are valid defeats understanding. Not only is it complex, but it also changes frequently and is not easily available. When you buy a ticket at the station machine you are simply required to consult the website for information about the validity of the ticket you are buying. How can this possibly fulfil the market requirement for perfect information?

The answer, of course, is that it is not intended to. You are expected to buy a ticket with greater validity than you need, at higher cost, rather than risk being caught without a ticket and obliged to pay a penalty fare. This also contravenes another assumption of the market system in being entirely abitrary. Whether or not you pay the penalty fare relies on the mood of the inspector you encounter. If he is hungover you are likely to suffer. If he takes pity on you for a foolish young woman you may be spared.

Most people who travel regularly by train are aware that splitting your journey works out cheaper than buying a through ticket. This is easily done by visiting website such as Split Your Ticket. However, a new rule has gone out to ticket salespeople: they are no longer allowed to give you the information you need to compare prices at the station. This makes a lie of the poster of an attractive young woman at our station who promises you the cheapest ticket, and advice on how to find it.

This left me playing a bizarre guessing game at the ticket office in Cheltenham the other day. I enquired about the relative prices of a ticket to Manchester, and two tickets, one to Birmingham and the other for the second leg. The downtrodden salesman was trying to stick to his rules: he was not allowed to tell me which way was cheaper; he was allowed to tell me prices if I asked for specific routes.

This refusal to inform the customer about the best value way of buying a ticket to their destination clearly contravenes the market assumption of perfect information. But it also illustrates how the market system really works: by setting us against one another and undermining the basic human motivations towards honesty and mutual aid that enable us to live a good and happy life.

23 June 2011

Interest, Money, but No Employment for Keynesian Scholars

Keynes was an example of that rare thing: a sociable and entertaining economist. Not only was he married to a Russian ballerina, he was a member of the Bloomsbury set and a friend of Virginia Woolf. According to a biopic of Wittgenstein by Derek Jarman that I watched recently, he also wore rather natty and colourful clothes. The film, with a script by Terry Eagleton, is well worth watching.

How glamorous this all seems compared to the life of an academic economist today. The poor quality of work is surely related to the absence of creativity and joy. Now Keynes has even been excluded from the conference celebrating the 75th annivesary of his own major work, The General Theory of Employment, Interest and Money. The work cannot be ignored, but its relevance in this time of crisis is so threatening that only those who oppose it were invited, according to a scathing critique by Ann Pettifor.

21 June 2011

Co-operation and the Wealth of Nations

John Restakis, Executive Director of the British Columbia Co-operative Association, is on a lecture tour of the UK as part of the events to celebrate Co-operatives Fortnight. His recent book, Humanizing the Economy, raises a number of useful questions in terms of how the co-operative form can offer solutions to the disastrous failure of the market. He is lecturing at the House of Commons tonight, Edinburgh on Wednesday and Rochdale on Thursday. His lecture is powerful and inspiring and well worth a trip.

For me, his most powerful question was why the democratisation which took hold of political systems in the 19th century did not also take hold of economic systems. The co-operative movement, of course, was one example of successful economic democratisation, but John's view that we need to focus on 'taking the democratic revolution beyond politics and into economics' demands attention from politicians of all colours who espouse the democratic vision.

The failure of economic democracy has led to the atrophy of political democracy, as corporations buy politicians: we are 'citizens in politics but subjects in the marketplace'. (This reveals John's North American outlook, since I fear that in Britain we are still formally subjects in both realms.) While we enjoy voting rights in our political systems, 'our economic systems are still stuck in the 18th century'. Challenging the ideology of free markets, he asks how can we claim to have free markets when firms are still stuck in the ideology of command and control?

So much for John Restakis's theory. In terms of practice he shared the powerful example of the co-operative economy of the Italian region of Emilia-Romagna, Italy's most productive region. The regional capital of Bologna has a dynamic economy, with one enterprise for every 10 inhabitants. Across the region as a whole, 40% of GDP is generated by co-operative enterprises, mainly of small and medium size. The construction, agriculture, food processing, transport and social care sectors are all dominated by co-operatives.

There is no attempt to enforce a co-operative monoculture, however, with a variety of different types of owner-managed and worker-managed firms thriving in a vibrant and diverse local economy. John draws an analogy between this and a healthy ecosystem, where a variety of different species co-exist without any dominating the others.

The success of the co-operative businesses in Emilia-Romagna has spilled over into the wider economy bringing about what John referred to as 'the socialisation of capital'. There are high average pay rates, low levels of inequality, high levels of female employment. Co-operation has led to economic dynamism, with Bologna figuring 10th in the list of Europe's economic regions in terms of its productivity.

In conclusion, John Restakis offered a challenge to the movement as a whole to have more self-confidence in celebrating its successes. But beyond this there needs to be a development of co-operative theory and a willingness to argue politically and theoretically for co-operation as a more successful and more innovative form of economic life, as well as having the social and community advantages that it has long been known for.

20 June 2011

I Sat Down and Wept

The parallel being drawn between the failure of Lehman Brothers and the potential default of a sovereign nation makes clear the blurred nature of democratic and corporate accountability in the world of 21st century capitalism. Rating agencies are at liberty to value national and corporate debt by the same measures. This is not only irrational but also a deeply political play, since the democratic right of the people of any nation to reject the debt that the banks have loaded onto them has been marginalised.

Fortunately, in the country whose language the word democracy arises from, the people have not given up their democratic rights so easily. Their continued and increasingly violent presence in the streets is the visible exercise of the political reality that makes a nation an entirely different beast from a corporation. Shareholders and board members hold power through the exercise of property laws; politicians only hold power by the will of the people.

Our refusal to allow Lehman and Greece to be compared as though they were equivalent should remain our own commitment to a democratic future in which our rights to have power remain intact. But we need to match this with a demand for our politicians to exercise the power that we have delegated to them as our representatives.

The most infuriating aspect of the Lehman-Greece link is that in the nearly three years between the first default and the second, our politicians have apparently done nothing to restructure the global financial system or to gain a political handle over the banking system. By some combination of corruption, co-optation and lack of courage, the breathing space that was bought by the bailout of banks has not been used to ensure the future stability of the system, never mind its equity.

It was a long time from 1929 to 2008 – several generations in which memories of the previous disasters of capitalist finance faded - but there was really no excuse for policy-makers to remain ignorant of, to literally ignore, the obvious weakness and injustice of the liberal finance system their political retreat had allowed to flourish. Acting in our interests it was their duty to return to a form of global settlement like that reached at Bretton Woods, but with equity and sustainability as two additional guiding principles. Their failure to do so, their pusillanimous determination to allow the market mayhem to continue ruining human lives and planetary systems is a shocking abnegation of responsibility.

As viewed daily in Greece, as in Iceland, as soon to be seen in Ireland, Portugal and Spain, when politicians fail their people so disastrously economic instability rapidly becomes political instability. Few of those alive and voting today remember serious political instability, although it is less than 40 years since the three Mediterranean countries mentioned were all ruled by military dictators. There is so much more at stake here than the investments of finance companies and it is politicians with the vision to grasp that who are so seriously, and tragically, lacking.

16 June 2011

Chancellor Fails to Separate Retail and Commercial Banking

The loudest call for reform following the failure of the banking system in 2008 was that the risky activities undertaken by investment banks should not, in future, be able to threaten the deposits of ordinary working people. Osborne's speech at the Mansion House last night indicated that he is not going to separate these two very different aspects of UK banking activity.

The newspapers this morning draw attention to the proposal, adopted by the far-from-independent banking commission, to 'ring-fence' the savings and deposit side of banking from the global casino. Like the stock-market itself, this tired metaphor is drawn from the agricultural sector. But the beasts of the City are far more powerful than the politician's fence. Admissions that negotiations are still ongoing makes it clear who will decide the outcome. Needless to say, the citizens who have paid for the banking fiasco are not represented in these discussions.

If retail banking remains within the same company structure as its more glamorous, more profitable and more powerful investment-banking sibling, the efforts of all the most creative and Machiavellian minds within each global conglomerate will surely be bent towards finding ways through the barrier. Only a clear separation into separate companies, with separate boards pursuing different agendas can remove the threat of another crisis in future. The banks will refuse to settle until they have made this clear separation impossible, until they are sure that the ring fence is full of holes.

But this whole discussion addresses only half of the problem. Even if your own savings are safe, if the massive investment banks run into problems as a result of their absurd and irresponsible activity then, while they are large enough to provoke a systemic crisis, the risk that we will all have to carry the costs and take over their debts onto the public balance-sheet will remain. Another policy proposals is, if anything, even more important than the separation of retail and venture banking: to limit the overall share of the market held by any individual institution.

I would anticipate that most readers of this blog keep their own money far away from the commercial banking system, in a mutual organisation such as a building society or with the Co-operative Bank. However, we are still vulnerable to the threat that the uberbanks make to the credit system on which our national economy depends. Never was there a clearer example of when finding your own small-scale solution is not enough: we must rather find a way of turning public anger into a significant political challenge to the banking sector.

15 June 2011

Want Not Waste

The cries for a weekly waste collection as a human right give us a fine opportunity to introduce a classic green economy discussion into our bus-stop conversations. Waste is an obsolete concept: the future is one without waste where materials will circulate through our economy rather than entering as raw materials at one end and being dumped into landfill at the other.

This conception of the economy as circular is due to Kenneth Boulding, a leading figure in the development of a green approach to economics (and has now been picked up by the Ellen Macarthur Foundation, where much detail can be found). Kenneth Boulding was born in Liverpool, UK in 1910 and studied at Oxford, Harvard and Chicago; he taught economics at Michigan and Boulder, Colorado. He began his career in fairly conventional economic vein, and achieved an impressive academic reputation for publishing and teaching. However, after the war he changed tack, attempting to fuse biology and economics in the book Evolutionary Economics published in 1944. This was the first attempt to synthesise the scientific aspects of economics and ecology and thus an important precursor to green economics.

As an early proponent of the need to move towards a non-growth or ‘steady state’ economy, Boulding used the contrasted images of the cowboy and the spaceman to explore our attitude to our environment. The cowboy, who finds his apotheosis in American capitalism, is always pushing outwards, expanding his available resources, finding ever new frontiers to exploit. The spaceman, by contrast, is forced to recognize the limits of what he has brought on his small ship:

‘Earth has become a single spaceship, without unlimited reservoirs of anything, either for extraction or for pollution, and in which, therefore, man must find his place in a cyclical ecological system which is capable of continuous reproduction of materials even though it cannot escape having inputs of energy.’

This image provides a stark illustration of two of the key principles of green economics: the importance of the circular flow of materials around the planet and the need to handle wastes positively. It is an interesting ironic development of this contrast that, with the NASA project to put a human being on the surface of Mars now itself using up a large quantity of earth’s resources, the cowboy will meet the astronaut at the final frontier: space.

Boulding was also critical of the straight-line thinking inherent in mainstream economics; this he described as ‘a linear economy . . . which extracts fossil fuels and ores at one end and transforms them into commodities and ultimately into waste products which are spewed out the other end into pollutable reservoirs’. This way of organising an economy was, he declared, ‘inherently suicidal’. His alternative was a prototype for the spaceship earth which he thought he had identified in the traditional village economy of Asia. Rather than a linear form this had a circularity built in—‘a high-level cyclical economy’. This was written nearly forty years ago and laid the groundwork for the closed-loop economy and the principles of permaculture that are now being translated into practical policy in calls for a zero-waste economy.

9 June 2011

Open Source Planning

In a comment on an earlier post to this blog, a reader asked where George Orwell is when we need him. I believe I may have found the answer: he has been employed as a Discourse Adjustment Analyst in the Department for Communities and Local Government, where doublethink is thriving. How else could we have a planning document that draws its title from the free software movement and yet is deliberately designed to commodify nature and sell it to the richest developer? His work can also be seen in the title of PPS4, called Planning for Sustainable Economic Growth, published under the Labour administration. It is rumoured that he will shortly be setting us his own consultancy, Oxymoron Inc.

During a training session organised by two members of the Planning Officers Society earlier this week I was told that my definition of Localism was entirely wrong. In spite of any lingering hopes about the Localism Bill, the trainers made it clear that it is hierarchy dressed up as subsidiarity: ‘The localism agenda is there to promote growth’ was the message. The National Planning Policy Framework has a presumption in favour of development where no core strategy exists, as in Stroud, and now that the Regional Spatial Strategies have been swept away this leaves us extremely vulnerable.

Unsurprisingly, the voice of the developer, the British Property Federation, has welcomed the new Framework. The changes are all, apparently, about efficiency and the removal of red tape: 'The planning system has become unwieldy and needs to be pared back'.

While regional planning has been all but swept away, there is a new level altogether: that of the neighbourhood. This is as yet undefined for urban areas, but in rural areas must be defined by parish boundaries. Neighbourhoods will be able to organise themselves to develop their own plans and, so long as they stick to the council's plan, the council must provide them with expertise and fund a referendum on the plan. If the neighbourhood votes in favour the plan must be followed.

This is not quite as exciting as it sounds, since the system is still hierarchical so that the neighbourhood can only make minor changes. For example, if it has been decided by the higher-tier authority that nuclear waste will be desposited in your neighbourhood, you are only at liberty to decide its precise siting. As the recent decision by Eric Pickles to permit the dumping of radioactive waste in a community near Peterborough that had clearly voted against this course indicates that the real motivation is profit and the real power still the national government.

7 June 2011

A Land Theory of Value

It must be something to do with the way that George Osborne is channelling David Ricardo, but I do keep coming back again and again to his liberal economic theories. Ricardo's Labour Theory of Value was particularly influential on economists of the succeeding generation, including Robert Owen and Karl Marx. Both derived from it the idea that there was an inherent unfairness in those who created value through their work losing a share of it to those whose only contribution had been capital.

Marx argued that the only way to wrest the power to extort economic value from the rentier class was via violent revolution. Owen, meanwhile, sired the co-operative movement and enabled generations of working people to establish their own non-exploitative businesses and to gain access to their necessities without becoming involved in exploitative consumption systems. But what about if the labour theory of value was itself a mistaken route? Throughout the 19th century the focus of economic theorising and political debate was on labour, but as the opposing forces of labour and capital struggled over the share of production, the real source of value, the planet itself, was sacrificed.

The labour theory of value replaced an earlier system of economic thought developed by the physiocrats, whose foremost thinker, the Irish economist Richard Cantillon, worked according to a land theory of value. It was these theories that were overturned by the classical economists and their neoclassical inheritors, who lost sight of the real value of land. The environmental consequences of this theoretical error are clear to see.

So how might we construct an economic system that paid due heed to the contribution of land as well as labour to the production of economic value? Could we imagine enterprises where the sorts of negotiations between producer and consumer that take place in co-operatives could be extended to include the planet? In a co-operative economy neither side should take too much, or be expected to give too much. In a green economy perhaps the planet should also be included as a negotiating partner, whose contribution is recognised and not exploited.

6 June 2011

A Politics for the Earth

Today is the day that Vince Cable launches the next salvo in the battle between capital and labour. This is the battle that has been central to our politics for the past 200 years or so, since the industrial revolution finally broke people's ability to create a livelihood by use of their own labour and on their own land. Interestingly, this is the word, a very green word, used by the TUC in their assessment of how the labour side is doing in this battle.

The TUC report shows that labour has been losing for several decades with headlines such as: 'The wages of middle income Britain grew by an average of just 56 per cent between 1978 and 2008, despite GDP increasing by 108 per cent over the same period, and for workers in some skilled trades incomes actually fell in real terms.' This is clear evidence that the consequence of globalisation and the neoliberal revolution in economic organisation has been the extraction of an increasing share of value by the interests of capital, and at the direct expense of labour.

The report frames the discussion against the background of a dichtomy between a welfare model of the economy and a model of finance capitalism. It argues that the consequence of a move towards a reliance on finance resulted in no extra jobs to replace those lost due to the movement of manufacturing overseas: 'Finance and banking created almost no net jobs in the 15 years to 2007, despite the industry’s greatly expanded share of the nation’s output and profits.'

In its proposals the report offers the beginnings of a revival of vision on the left, a vision which includes demanding that politicians pay more attention to equality and investment in manufacturing, reopen the question of the selfish and destructive design of the corporate business model, and of course the inevitable demand for more union involvement in economic policy-making. The report also provides the sort of information about who is gaining from the neoliberal model - the wealthy and the professionals - that has been so lacking in the debate about economic policy in recent years.

The most killing statistics of all are those that show that the economy has not thrived under this neoliberal model. Growth has been slower and recessions deeper. Even on its own terms the capitalist economy has utterly failed, and the most extreme version of it, with all the social costs attached, has failed most extremely.

The weakness of the report is that, in spite of using the word livelihood, the word is used in the predictable narrow sense that a 'labour' movement seems incapable of transcending. Hence the emphasis is still on the fight between owners and earners, while the object of that fight, the source of all true value which is the earth itself, is still left outside the debate.

5 June 2011

Pricing the Priceless

In the era of ecosystem assessment it is essential that we all understand how limited are the techniques for pricing nature. This post is rather dull and technical but shares what I hope is useful information about what the ecosystem assessors are up to. There are a number of actual techniques that can be used to create pseudo-prices for aspects of the environment. According to David Pearce all have two stages: first the economic value must be demonstrated and measured; second, it must be captured or ‘appropriated’.

Conventional Market Approaches

This is the most straightforward method, since it begins with the existing market cost that needs to be paid to restore the environment to its pre-existing state. If the environmental problem we are considering is pollution from a factory, for example, the price is whatever it would cost to clean up that pollution. If this price is not enough to protect the intrinsic value of the watershed which absorbs the pollution, then a technique of ‘shadow pricing’ might be used as well—adding to the cost of the clean-up an additional value which reflects what people would be prepared to pay to have their watercourse restored. Sometimes these market approaches aim to restore the value of something that has been destroyed by pollution, for example paying a farmer the value of a crop that could not be sold because it had been contaminated.

Household Production Functions

This name appears to bear little relation to the technique it describes, which involves costing the substitute that can be offered to the consumer who has lost out because something they value in the environment has been destroyed. Examples might be the cost of installing insulation to prevent noise from aircraft destroying the peaceful enjoyment of the home or the cost of travelling to a park that is far from a person’s home because the nearby park has been used as development land by a supermarket.

Hedonic Price Methods

Hedonic pricing involves using markets that do exist that approximate to the goods or services that are destroyed and using the prices that are paid in that market to impute a price to the non-tradable commodity. The price that exists in the real market is considered as an implicit price for the missing market. A popular example is the ‘hedonic housing market’, which relates the price premium for homes in a certain area to the value people place on the peace, proximity of green space for leisure, low levels of noise pollution and so on in the local environment.

Experimental Methods

The previous methods are all conducted by environmental economists working from existing data and in the quietude of their offices. In experimental methods they venture into the world and discover how much people value aspects of the environment by asking them directly what they would be prepared to protect it. In a method known as ‘contingent valuation’ people are asked what they would be willing to pay to protect their local park or to avoid having a nuclear power-station built in their community, for example. The method known as ‘continent ranking’ or ‘stated preference’ involves how much they value an environmental good relative to other goods which are actually bought and sold in a market, enabling the researcher to fix the relative price of the environmental good that they are interested in.

It is clear from these various techniques that they are hugely complicated (and expensive) to calculate and that the prices that are arrived at can never be considered to have a definite relationship with the value people place on the environmental good or resource that is under threat or has been lost. An environmental economist would argue that, in a society where markets dominate, pricing the environment, no matter how inadequately, affords the environment the best protection. Critics might suggest that a more pragmatic conclusion would be that there are areas of life too precious to be included in the sphere of the market.

4 June 2011

What the Fukushima is Going on?

Well how could we possibly know? The major consequence of the Fukushima disaster in this household is that we now have a dish aerial so that we are no longer reliant on the BBC's coverage which, in this case, I can only designate as propaganda. The truth is beginning to emerge from Tepco, who are now admitting that three of the Fukushima plant's reactors melted down within days of the tusnami. Those presumably were the days during which the BBC was engaging a range of pro-nuclear stooges to reassure us that there was no problem.

While the internet appears to be ephemeral it can in reality provide a trace, and we can use this trace to assess exactly what we were being told by the BBC. On 14 March BBC churnalists were reporting the view of 'international nuclear watchdogs' (presumably the IAEA) that there was no sign of a meltdown, balanced by the comment of an unnamed minister that the 'melting of rods' was 'highly likely'. On 27 March the BBC reported that workers were 'trying to cool the reactor core to avoid a meltdown' at a time when we now know that three meltdowns had already occurred. Perhaps strangest of all was the constant repetition of the bizarre phrase 'partial meltdown', as though nuclear fuel could somehow resemble a chocolate fondant pudding.

We were, throughout the early days of the disaster, when people were still listening to the stories, being reassured that this was an old plant whose design is no longer used. This is, as made clear in a film made for the BBC by Adam Curtis back in 1992, when it still had a degree of independence, to entirely miss the point. The real question is why these plants were still running if they were not safe: and that is a question about politics not science.

The BBC's inability to provide clear information about the nuclear threat is no doubt a consequence of the increasing political pressure it has been under in recent years, making the inference that we no longer have an independent national broadcasting channel a sad but inevitable one. No wonder, then, that there has not been a reaction against nuclear power in Britain, compared to Germany, where the tide of revulsion from a better informed public has led to the closure of the entire nuclear industry by 2022 and the election of green governments in a number of the country's regions.

3 June 2011

What the Frack is Going on?

I must confess that my disappointment at learning of the advance of the shale frackers into my backyard rapidly morphed into the miserable realisation that I am going to have to learn about a whole new energy technology. Unwanted technical knowledge is the inevitable lot of the environmental activist. The shale oil drilling has reached public consciousness because of the suggestion that the operations of the Cuadrilla company near Blackpool has caused two minor earthquakes. In my backyard there are threats of similar developments by a previously unknown company called Coastal Oil and Gas which has already submitted plans to begin drilling at Llandow industrial estate in the Vale of Glamorgan.

There is limited information available about the Bridgend-based company Coastal Oil and Gas, although local campaigners claim that it is a husband-and-wife team which is fronting up a major investment from a larger Australian company. Certainly, whatever the past activities of the company they appear to have left no internet trace. The difficult question for me is precisely how this company came to own the rights to what is a natural resource. My best information so far is that, in our bizarrely feudal system, all land in the UK, and the resources in it, belong to the Crown. So can we assume that Gerwyn Williams, MD of Coastal Oil and Gas, has taken a trip to the palace with an envelope of greasy tenners? Answers to this question would be very welcome.

Although the quantities of gas available appear to be fairly limited, the race is on to profit from this latest energy boom. In South Wales this boon for a tiny number of people while the majority bear the cost has haunting echoes of the history of coal. It was a small number of English coal barons who grew fat, while the working people of Wales suffered and died in the pits. This time around there should be no permission given to exploit natural resources unless the value of those resources is shared fairly amongst the local community.

You can post your opposition to fracking and support the call for a moratorium until a participatory democratic process guaranteeing environmental safety and fair sharing of the proceeds here.

2 June 2011

There is No Wealth But Life

Finally, in a move that became inevitable once bogus methods of valuing nature were invented by economists with the very same mental framework that produced sub-prime lending and credit-default swaps, a price has been put on the natural beauty of our land. Our country has been degraded into an accounting unit; our beautiful land has been marketised.

This, in my view, is the only possible interpretation of the UK National Ecosystem Assessment, an attempt to put a monetary value on everything that we, the human species, gain from our fellow species and earth's sacred existence. It styles itself as 'the first analysis of the UK’s natural environment in terms of the benefits it provides to society and continuing economic prosperity' and is 'part of the Living With Environmental Change (LWEC) initiative'. That is what we have to do of course: learn to live with environmental change, rather than learning to cherish and respect nature's way. The ideology here is very much about nature learning to live with us, in contrast to the opposing lessons of permaculture.

The naivety of the respectable, well-meaning but misguided scientists, like Bob Watson, Chief Scientific Adviser to Defra, who have become embroiled in this exercise is baffling. The majority appear to be natural scientists, and this, alongside the large-scale funding that was presumably available to support this research, appears to explain their mistaken decision to become involved. Perhaps they genuinely do not understand how economists can, once given something 'scientific' to work with, warp and distort values until they arrive at the answer that suits their profit-driven objectives. The process of discounting is just one such technique.

Knowing exactly how much people would pay not to lose a bit of woodland is a real step forward for a developer. He only has to find this much money and give it to the local authority and he has solved the problem of the devastating loss of the trees. A little bit of carbon mitigation, a few bus fares to travel to the next closest park, and the problem of local resistance to concrete is solved. Profits expand and the irritating impediment to economic growth from nature and those who love nature has been eliminated.

The impossibility of substituting money for nature is a central tenent of a green approach to economics; to imply that we can somehow find a price for nature, a price for life, only proves that those who come up with such calculations need to be removed from positions of authority. If they are allowed to continue to dominate our national life it is clear that our future and that of many of the species we share the planet with is doomed.