Your clearest explanation of the New Economy yet - plus how it connects to wellbeing and Extinction Rebellion
Confused about what exactly Community Wealth Building is? Like the sound of the latest Green New Deal but unsure what it means? Let Miles Thompson be your guide as he reflects on a rousing first Stir to Action festival
In July, I rather surprised my tent which had only just been taken down from Glastonbury, by putting it up again just outside of Frome. The occasion was the inaugural Stir to Action festival. Its title: “Playground for the New Economy”.
Stir to Action, founded by Jonny Gordon-Farleigh, produces both STIR, a quarterly magazine, and a nationwide series of workshops informing the public about aspects of the “New Economy”. But what is the New Economy? Hopefully this blog, summarising some of the content presented at the festival, will give you an overview if the term is new to you. It is also hoped the blog will map out a terrain where we can build more links between those interested in New Economies and those interested in Psychologists for Social Change (PSC). Both seem passionate about reforming the structures that create and maintain inequality, advancing alternatives to austerity and tackling the social determinants of distress.
The first session, led by Dan Stanley posed some very sensible and fundamental questions about the “New Economy”. For example, is it new? (Answer: no). And is it just about the economy? (Answer: also no). It became clear that the New Economy is focused on having a society that works for everyone, and later sessions at the festival started to explain how this might happen.
Sarah McKinley from the Democracy Collaborative led a panel on “Community Wealth Building” (CWB). Like the New Economy, CWB is about democratising local economies. It promotes different ways of working and ownership that realign institutions and their assets for the good of the community, rather than for distant shareholders or unaccountable investors. That other model was often referred to as the “extractive economy”.
Under the CWB heading you have models of ownership that include co-operatives - businesses owned and run by their members, and municipal enterprises - businesses owned by local governments that both provide services for and generate revenue for local communities. Inclusive ownership funds are another idea of how companies could be made more accountable. Here, firms above a certain size could transfer ownership gradually to employees at a rate of 1% a year, providing employees with both dividends and voting rights. In short, gradual transitions towards a more John Lewis model of ownership.
Spreading awareness of different ownership models is important now as many businesses owned by baby boomers could be about to be sold in a so called “silver tsunami” of retirement. Owners face choices which include trying to sell their companies to private equity groups solely for profit or transferring them to employee ownership.
Scroll down to find out about how PSC’s “Community ‘Health’ Building” network will help explore how these models of working are better for psychological health
People doing things for themselves
The classic UK example of CWB is the “Preston model”. The leader of the city council, Matthew Brown, spoke at the festival. Until about 2011, Preston was banking on a massive shopping mall, built by multinationals, to help turn around its fortunes. But the financial crash put the brakes on that. So the council made a deliberate turn towards localism. First, the council paid their employees a living wage - one of the first in the UK to do so. But what it did next with its “anchor institutions" (the city and county councils, colleges, the university, the police force) really sets it apart. It deliberately tried to keep the jobs and money tied up in those public services circulating locally by tweaking its “procurement processes” to favour local providers. Between 2012/13 and 2016/17 spending with Preston-based organisations increased from 5% to 18.2%, and with wider Lancashire-based organisations from 39% to 79.2%, an increase of nearly £200 million.
It would be wrong to think that CWB is just about ensuring social value in procurement. At its strongest, CWB is working towards an intentional reorganisation of the economy. The Scottish and Welsh governments are actively exploring CWB. As for the current UK government… well… not just yet.
Next steps for Preston include the creation of a regional cooperative bank and incentivising new co-ops to fill gaps that are not already occupied by local and regional firms. Importantly, CWB is not just for post-industrial towns. Islington in London, hardly post-industrial, has very high land and residential prices. So, council owned land and buildings are now being opened up and turned into affordable workspaces. Another CWB success story at the festival was the Bevy, the first community-owned pub, hub, café and community space on a council estate in the UK. International examples of CWB include Cleveland, Ohio; Barcelona’s En Comu coalition, and the Basque region's Mondragon.
The issue of climate change and wider environmental destruction was also front and centre at the festival. Rob Hopkins of the Transition Network spoke, as did Julian Thompson of Extinction Rebellion (XR). XR reminded us that in the last few months, the UK Government has declared a climate emergency and six parliamentary select committees have announced plans to hold citizens assemblies on combating climate change. Progress. But of course, there is much, much more to do. International XR action starts again on October 7th 2019.
CLIMATE CRISIS IN 4 NUMBERS
Professor Paul Chatterton of Leeds University reminded festival goers of the challenge of climate change basing his interactive talk around four numbers.
1500 (and then 9 more zeros): the number of gigatons (billion tonnes) of carbon that have been released into the atmosphere since the 1860s. One third of this has been released in the last 15 years.
1000: the number of gigatons of carbon left in the ground.
420: the number of gigatonnes we can still release globally and keep within the 1.5 degrees threshold. We think. Researchers estimate that if we release this much more carbon there is, at best, a 66% chance of keeping within 1.5 degrees.
1.1: the average number of degrees we have already raised the temperature above pre-industrial levels.
In summary: we have used 1500 gigatons. There are a 1000 gigatons left in the ground. If we use more than 420 gigatons we are likely to pass 1.5 degrees… having already raised temperature by 1.1 degrees!
It may, to some, seem that CWB and climate change are slightly odd bed-fellows. But they are not. CWB is built around the interconnected importance of social and environmental relationships. And mundane as it may sound – shorter supply chains equal smaller environmental footprints. This is integral to the CWB model.
The connections between new economies and the environment come together more powerfully when thinking about proposals like the Green New Deal. Andrew Sims spoke at the festival about the bold, rapid green transition that is required now, much like Roosevelt’s “New Deal” for the US in the 1930s. The Green New Deal was first published in 2008 by the New Economics Foundation, and written with people like Sims, Tony Juniper and Caroline Lucas. It proposed investment in energy efficiency, green power generation, creating green jobs to improve low-carbon infrastructure, taxing the profits of oil and gas companies and tackling big banks, big finance and tax evasion. Sims reported that at the time it gained little traction but this changed when it was picked up by Bernie Sanders and his team during the 2016 US presidential election. The idea is now being championed by Congresswoman Alexandria Ocasio-Cortez and others in the US. In the UK, things are moving forwards too - a Green New Deal was passed as policy at the recent Labour party conference.
Land for common good
Another session which brought together power, economics and the environment was a panel on housing. What really struck me was the issue of land. It reminded me how a lot of the problems with house prices and the wider housing crisis stem from a land crisis. Among others, Mark Walton from the not-for-profit Shared Assets spoke about how land should become a common good, part of the 21st century commons. Not just land for housing but also for recreation, education and both physical and mental health needs.
In a recent book, Guy Shrubsole points out that half of UK land is owned by just 25,000 people or 1% of the population. This commoditisation of land has come to be the status quo - the land around us and the houses built on it are seen primarily as commodities to be traded and wealth stores to hold onto as they increase in value. What can be done about this? We can encourage people who are doing nothing to the land they own as it quietly increases in value to sell it through tax changes. We can create community land trusts which own land on behalf of the community, not extractive owners. We can selectively favour building companies who have long-term commitments to a local area and use local labour and local resources. We can promote community-led housing initiatives, seeking out house building alternatives like Massbespoke and Wikihouse, who build local prefabricated homes. We can also ensure that when houses are built, they have play areas and community spaces but without sky-high ground rents and ongoing service charges that keep needing to be paid by the residents.
As one further example, Paul Chatterton, who I mentioned earlier, lives in Lilac Leeds co-housing and together the residents are trying to “decommodify” housing. Their houses are built out of straw, timber and lime. But even more impressively, the cost of the houses is tied to wage growth not growth in house prices to ensure they remain permanently affordable.
Wellbeing in a post-crash world
Psychologists reading this blog may be wondering – “Yes, I can see how these things link to wellbeing, but was anything more overtly ‘psychological’ presented?” It was. Sally Zlotowitz, a member of London PSC, spoke eloquently on the topic of “Beyond the Individual in Mental Health and Wellbeing”, based on her recent article in STIR magazine. Sally highlighted the risks of individualising mental health and the potential problematic double-step of both ignoring the wider social and economic factors that can impact mental health, and inadvertently blaming the individual for the uncontrollable difficulties that they face. She introduced the festival audience to the Psychological Impact of Austerity briefing paper, published by PSC in 2016. Sally also highlighted the potential of CWB to help improve the five indicators of a psychologically healthy society discussed in the paper: Agency, Security, Connection, Meaning and Trust.
In a similar vein, Annie Quick reminded festival goers that without keeping track of who is holding the power, wellbeing economics can risk missing the mark. Annie is a New Economics Foundation (NEF) fellow who used to lead the wellbeing and inequality work at NEF. She raised concerns about measuring wellbeing with a single rating scale and again highlighted the risk of individual solutions to collective problems. More than 10 years ago NEF published its “Five Ways to Wellbeing” document. The five ways - connect, be active, take notice, keep learning and give - were more successful that NEF ever imagined. But in her talk (and recent blog), Annie wondered whether such frameworks are perhaps more suited to a pre-crash world: when GDP was on the rise, there was more security of work and numerous things were more progressive. Today, advocating for individualistic solutions, such as the Five Ways, without also advancing the important structural changes we need, seems, at best, a missed opportunity.
Rounding up and moving forward
There are now numerous mature pilots and viable demonstrations of how Community Wealth Building can help make a difference. Of course, none of this is necessarily quick or easy. I was struck by the honesty of Kay who runs a social enterprise in Preston promoting food fairness for all. When asked how it was setting up “The Larder” she simply answered: “It’s really f**king hard”.
I left Frome informed and energised enough that when I dropped Sally off at the train station, I forgot my overloaded to-do list and agreed to write a blog about the festival for PSC. So now with the blog done, on to the next step. Let’s be stirred to action.
If you want to read more about what the speakers above and others like them have to say, click on the links in the blog or pick up some of the recent issues of STIR.
PSC is setting up a “Community ‘Health’ Building” network to help focus the efforts of PSC-ers interested in these ideas. If you want to join, please contact Miles or Sally on email@example.com. Come and get involved! Those working towards the New Economy are already talking to us about how we might help:
PSC is a network of people interested in applying psychology to generate social and political action. You don't have to be a member of PSC to contribute to the blog