Participatory Capitalism

Remember the days when everyone knew their bank manger and the Man from the Pru would visit to collect his premium? It's not that long ago since people still seemed to have an important place in financial transactions. Now, though, everything seems to be automated or online — even applying for a loan or larger overdraft. Having unquestioningly accepted the flexibility and convenience that technology has offered our individualistic age, it might seem strange to hear anyone calling for a people-centred economy in which morality replaces mathematics in tackling problems caused by global capital. Yet, in criticising the global economic system for creating "material and spiritual poverty," that is precisely what the World Council of Churches programme executive for Economic Justice, Poverty and Ecology has done.

The Tanzanian Rogate Mshana suggests that one solution to the globalisation of capital could be the introduction of "participatory capitalism, which provides a way to connect people to their economy, their community, to their work place, and to each other," for instance through employee ownership schemes. He also called for the promotion of fair trade to respect the needs of small-scale farmers in poor countries and the support of economic initiatives that focus on social rather than economic performance.

I am reminded of an observation made in the ground-breaking Jubilee Manifesto (by Michael Schluter & John Ashcroft), it its discussion of the consequences of the debt-based financial system that has predominated in the West in recent centuries: "It is ironic that anti-globalisation campaigners decry the activities of multinational companies because of their scale, their dissociation from local communities and the frequent excesses of executive pay. These are all the inexorable results of the principle of limited liability, but rarely does one hear the correct diagnosis of the underlying problem."

If the Conservatives are serious about tilting the domestic and international balance back from "economy-friendly families to family-friendly economies" — or even, if I might be so bold as to suggest, community-friendly economies — then they would do well to listen to the likes of the WCC's Mshana.

Source: Ecumenical News International

Blueprint for a Green Economy

"If we are to create a way of living that we can sustain, then water, waste, transport and energy, as well as farming, food, fishing and the built environment, have to be thought of as a whole."

Launching the Conservatives' Quality of Life Policy Group report, a day after the price of crude oil reached a record $80, former Environment Secretary John Gummer is surely right to place the emphasis on sustainability.

At the end of the day, for all the uncertain predictions about an imminent big freeze or, conversely, a global heatwave and for all the questions about the extent to which man has exacerbated the planet's natural cycles of climate change, one thing is certain: the world's reserves of fossil fuels will one day run out. Whether we make them last 50 years or 100 years, or even 200 years, won't ultimately affect mankind's carbon footprint. What our rate of fossil fuel use will affect is the timeframe available in which we can invest in the research and development of renewable sources of energy — during which we can answer the really big question: How can we sustain life and civilisation as we know it? Or, as the report puts it, given that there are plenty of other symptoms of the damage wrought by humans' modern lifestyles — such as desertification, soil erosion, and the destruction of forests — can we continue to be an economically successful nation and, at the same time, an environmentally and socially healthy one?

Does the report provide a satisfactory answer that is "entirely consistent with long-standing Conservative principles"? The introduction notes that "Instead of wanting the State to intervene and control, Conservatives seek only to ensure that the market framework is capable of delivering the nation’s requirements and that people, communities, and organisations, whether for profit or not, are empowered and trusted to play their proper and fullest role." Yet, about aviation, it complains:

"Growth in demand is heavily concentrated in short-haul leisure flights taken by UK residents. Between 1994 and 2004, 70% of the additional international trips that occurred were UK residents going abroad for leisure. From the perspective of the UK economy, this is arguably the wrong sort of growth. Shorthaul leisure flights exacerbate the country’s tourism deficit – the difference between what overseas visitors spend in the UK and what British citizens spend abroad – which already stands at around £15 billion. Today, over half of all air trips arriving or departing UK airports are UK residents travelling for leisure, and this proportion is set to increase." (p.355)

Thus, some of what are already its most criticised recommendations, such as no further airport expansions, rethinking Heathrow's proposed runway, and no new runways at Gatwick or Stansted, seem to burst with big state interventionism. The authors argue that "Scaling back airport expansion plans would lead to more efficient use of existing capacity, and accelerate the allocation of flight slots to parts of the market that value them most" and that this "does not mean that there would be a diminution in the cheap flights already available," but it is hard to see how such an approach could not but damage Britain's economy and international competitiveness.

I am happy to accept the premise that no government can be neutral in matters of wellbeing and we should therefore shift taxation policy towards the taxation of pollution — from 'pay as you earn' to 'pay as you burn.' However, if the shift is to be managed in an orderly manner, the Government will need to ensure that the alternatives that it wishes us to embrace are adequate. There is no point trying to tax us from flying if the rail network doesn't have the capacity to cope with the additional passenger loads. I would probably even be willing to accept that the best way of retuning growth to take account of environmental health is "by pricing carbon into the equation as the most effective surrogate for environmental cost" — so long as this genuinely is not used as a means to increase the total tax burden.

I agree that "It is time to debunk the myth that we must choose between the environment and the economy. In truth there is no either/or between environmental protection, social stability and sustainable economic growth." So, its discussions about energy efficiency — for instance in the context of the household sector discussed earlier in the week by Zac Goldsmith, which include the rejection of the Home Information Packs (HIPs) regime — are to be welcomed. In the related context of planning and also of rural life and Defra, its recommendation that "the localism agenda be used to empower the very lowest of levels of government, nearest to the people whose lives they affect" is also strongly welcome. This also applies to the subsequent discussions about reform of Europe's infamous Common Agricultural Policy and Common Fisheries Policy, "to shift the CAP across Europe from production-related subsidies (Pillar 1) to a system of paying farmers for the public goods and services they provide (Pillar 2)." As it says, "The more complex the world gets, the more globalisation seems to remove power from people, politicians, and even nations, and the more it is important that individuals feel they have a real say about the future of their own community." It is high time that this process should be reversed.

Given that I also believe we should "tilt the balance back from ‘economy-friendly families to family-friendly economies,’" I would also not oppose the suggestion for the planning system to "prioritise the protection and enhancement of ‘town centres’ and ‘local neighbourhood shopping centres’ over and above out of town/edge of town retail development." If we wish to strengthen our local communities, then it seems vital that we maintain the economic and social viability of our towns. I expect that some of you might disagree, but I think this is an area where Margaret Thatcher's "Never call me laissez-faire" quote is probably relevant: "Government must be strong to do those things which only government can do."

Lastly, back on transport, I was pleased to see the call for increased carriage of freight by inland waterways and, in relation to proposed national road user charging, the willingness to "seek simple and transparent ways to achieve our ends and avoid grandiose schemes that rely on unproven technology and huge investment."

In conclusion, does the report tell us how we can continue to be an economically successful nation and, at the same time, an environmentally and socially healthy one in a way "entirely consistent with long-standing Conservative principles"? Given that these are merely proposals that will all go into the melting pot containing the many recommendations from each of the other policy group reports, then I believe we have to conclude that it does as least help illuminate the way forwards. The next challenge will be for the Party to compile a coherent manifesto around a single Conservative vision for the twenty-first century...

An Unquiet World

Almost before any of us have had a chance to digest Tuesday's report from the Globalisation and Global Poverty Policy Group, the Conservative Party's National and International Security Policy Group has today published its own final report, An Unquiet World. Unlike the ground-breaking first report from the Social Justice Policy Group, it is not always obvious why we had to wait eighteen months. For instance, take the first four conclusions:

• The UK has not made enough of its natural advantages in developing a close relationship with India.
• Our civil liberties at home and our human rights record abroad matter and must be upheld in a consistent manner.
• The broader Middle East is a region in turmoil. ... Iraq has made some aspects worse.
• The risk and danger of the proliferation of weapons of mass destruction have been increased by the situation in the broader Middle East.

... Or its verdict on the key relationships and institutions:

• The continuing importance of the transatlantic Alliance.
• The vital need for functioning US European relations.
• UK security involves close partnership in Europe.
• Functioning international law and invigorated international institutions protect and promote our interests. ... The UK should put effort into UN reform generally and Security Council enlargement in particular.

None of this sounds particularly fresh or insightful. Even once it reaches the sections on security, its criticisms of Government and European policy are nothing new:

• The identity of the British people needs to be rebuilt to include minority communities on the basis of shared values and active equal citizenship.
• The UK is without arrangements in place for guaranteed energy supply or a strategic reserve available for emergencies.
• Policies being pursued by European governments towards Russia and the countries on the EU’s borders in the Mediterranean and Eastern Europe do not serve the political and security interest of member states as well as they could and should.
• It is urgent for EU leaders to agree with Turkey a way forward on the accession negotiations.
• Our armed forces which serve the nation with great professionalism round the world are overstretched and there is no reserve available for emergency. ... Their mission no longer corresponds to the real security requirements of the nation.

The real interest, therefore, doesn't come until we reach its recommendations. It suggests that an incoming Conservative government should:

• Conduct a Defence review not with the aim of inflicting further cuts, but of ensuring that our armed forces have been asked to do the right job, are properly equipped and trained and are employed on the right terms and conditions.
• Establish a dedicated force with a permanent command headquarters for homeland defence and security, to provide assistance as and when requested to the civil authorities in the event of a major terrorist incident or other national emergency.
• Maximise the influence of its considerable range of soft power assets (such as the British Council, the BBC World Service, and British university system). British diplomacy, an asset neglected by the Labour Government, should be revitalised.
• Create a National Security Council in the Cabinet Office. The FCO should be brought back from the sidelines. The FCO and DfID should develop a dedicated civil expeditionary capability.
• Adapt the method of budgeting for spending on the external aspects of national security by relevant departments (FCO, MOD, DfID) to support a national security approach and alter spending patterns to fund more adequately reform and nation building programmes relevant to the establishment of open societies.

Perhaps it should come as little surprise that "Much of the existing policy base is valid and should be built on." However, particularly coming so soon after the Prime Minister adopted Conservative calls for a unified border force (even though Brown's version turns out not be to quite as radical a reform as initially appeared), we could have hoped for a greater emphasis on those elements that would demonstrate to the public that there is in fact a difference between the major political parties — and that the Conservatives are the Party that can best meet the nation's domestic and international security challenges. ... Let's hope the next policy groups establish a little more "clear blue water" in their reports.

In It Together

Poverty is a denial of human potential. The stifling of dynamism, creativity and intelligence that attend poverty affects us all. Unleash that potential and we will all benefit through an explosion of thought, culture and trade.

In the twenty-first century extreme poverty is not only a preventable economic absurdity but a moral disgrace. That is what has motivated this group in its work.

But even if we were driven purely on the basis of self interest then act we must. Poverty undermines our security and prosperity as well as our humanity. It is necessary for our own well-being that we work together to remove the scourge of poverty that so blights our time.

The bald fact is that extreme poverty does not affect only the few, it harms the many. We are all in this, like it or not, together. And that is the only way that poverty will finally be eradicated: together.

So begins Peter Lilley in his introduction to the second of the Conservative Party's policy group reports, published today. Unlike the Social Justice Policy Group's recent report, media coverage of In it together: the attack on global poverty, from the Globalisation and Global Poverty Policy Group, has so far been very poor.

Overall, with its emphasis on trade and training instead of aid and tariffs, it looks good, although expecting the World Bank and other multilateral organisations to track corruption seems rather naive. In all, the group makes 76 recommendations, all of which could be funded within the current commitment to spend 0.7% of national income on international aid. Here are a few of the highlights, listed under the report's six headings:

Aid

• DFID’s process for allocating bilateral aid should be adjusted from a cliff edge to a slide. So when low income countries pass the middle income threshold they should no longer risk losing all their aid.
• DFID should continue to develop funding mechanisms which provide longer term, more stable and more flexible aid funding. This principle should apply both to bilateral aid and that provided through NGOs and local partners.
• We recommend that DFID should allocate its aid budget so as to encourage NGOs to develop specialist competences and focus on them, and should be more willing to use smaller NGOs which have already specialised in a particular function or country and proven their ability and integrity.
• DFID should create a Human Rights Review Panel to advise whether aid should continue to flow to governments after human rights abuses occur and DFID should respond speedily but proportionately to any deterioration in standards, thereby obviating the need for a more drastic response later on.
• The UK must make a long-term commitment to training medical staff in countries with the greatest need for them.

Economic development

• Increased UK support for skills and enterprise training for young people is necessary.
• The UK should endeavour to extend its support for secondary education, to assist low income countries in moving towards universal secondary education.
• We support the provision of development funding directly to private sector enterprises and entrepreneurs, if this offers the best way to tackle poverty.

Trade

• There is a strong case for allowing low income countries, in particular, i) open access to EU and other developed country markets; and ii) flexibility as to how rapidly they liberalise their domestic markets. Real Trade involves both.
• The UK should aim to spend a larger proportion of its existing aid budget to 2013 on aid for trade.
• The UK should press the EU to take up the US offer of an end to all market distorting support as part of the Doha Round. At the very least the UK should press for the EU to meet the G20’s request for deeper reductions. The UK should also seek to hold the EC to its earlier offer to abolish all subsidies on exports from the EU ... The UK should push for an immediate end to certain CAP programmes such as tobacco and cotton subsidies.

Corruption and governance

• DFID should live up to its promises and respond more vocally, robustly and proportionately to evidence of corruption affecting UK aid.
• Aid to promote good governance should be used to help both stimulate and satisfy demand for greater accountability, by strengthening the capacity of civil society to challenge governments over issues of corruption, human rights, and transparency and accountability.

Conflict, fragile states and humanitarian aid

• The UK should support an International Arms Trade Treaty to curb the flow of weapons to conflicts.
• Pledges for quick-onset emergencies should either be made from existing contingency funds or from new money, and should not involve the re-allocation of previously allocated funds.
• What is needed is greater coordination, not centralisation. If donors duplicate, this is a waste, but if the UN were to attempt to centralise all donors and then assign tasks this could take up valuable time – putting lives at risk. Attempts to centralise responsibility under a single agency should be resisted by the UK Government.
• The UK should welcome and undertake to uphold the commitment of the international community at the UN Millennium Review Summit in 2005 to ‘take collective action [to protect vulnerable populations] in a timely and decisive manner . . . should peaceful means be inadequate and national authorities [be] manifestly failing to protect their populations from genocide, war crimes, ethnic cleansing, and crimes against humanity’.

DFID - the aid effectiveness challenge

• DFID should, as a leading bilateral donor, take a much more robust line with multilaterals, demand evidence of effectiveness and performance, be ready to withhold discretionary funding where necessary and through this more assertive stance create real impetus for change.
• DFID must focus on results, rather than processes, and must develop methodologies and techniques that will enable a results-focused comparison of different projects and programmes.
• Our proposed option for the evaluation of DFID’s effectiveness is the creation of an Independent Evaluation Group which would report to Parliament via the International Development Select Committee.

Revitalising Silk Road Trade

While negotiations over a global trade deal sponsored by the World Trade Organisation have stalled, South Korea has opened talks with the European Union, already their second largest trading partner after China, on a free trade deal that could boost their present £40 billion bilateral trade by as much as a quarter.

Forging ahead with bilateral deals of its own, the world's tenth largest economy and Asia's third largest economy, South Korea just last month completed a bilateral trade pact with America, their third largest partner. This comes on top of other recent deals with Chile, Singapore, and the ten-member Association of Southeast Asian Nations.

South Korea is seeking to increase exports to the EU of automobiles, textiles, electronics, movies, music, and access for South Korean professionals such as architects and nurses. However, whereas the United States and Chile put pressure on Seoul to open up its tightly defended agriculture sector, Brussels is expected to be more lenient in this area and will focus on the auto sector, which is also heavily protected by South Korea.

While it is right that we should remove global barriers to trade, such bilateral agreements should not be at the expense of the world's weaker economies and the Doha development round of negotiations. As I wrote some years ago in The Times, if the benefits of globalisation are to be extended to the citizens of the developing as well as the developed world, what we need is not a new set of regional trading blocs vying against each other, but a Global Free Trade Association.

All You Need Is Love

Writing on the theme of "Charity and Justice in the Relations among Peoples and Nations" in a message to the Pontifical Academy of Social Sciences, the Pope has said the world faces three specific challenges that "can only be met through a firm commitment to that greater justice which is inspired by charity."

1. The environment and sustainable development

Benedict XVI maintained that "If development were limited to the technical-economic aspect, obscuring the moral-religious dimension, it would not be an integral human development, but a one-sided distortion which would end up by unleashing man's destructive capacities."

2. Our conception of the human person and consequently our relationships with one other

The Pope lamented the fact that "Despite the recognition of the rights of the person in international declarations and legal instruments, much progress needs to be made in bringing this recognition to bear upon such global problems as the growing gap between rich and poor countries."

3. The values of the spirit, such as knowledge and education

Speaking about the increased interdependence of peoples arising from globalisation, he called for "a just equality of opportunity, especially in the field of education and the transmission of knowledge, is urgently needed. Regrettably, education, especially at the primary level, remains dramatically insufficient in many parts of the world."

He concluded:

"To meet these challenges, only love for neighbour can inspire within us justice at the service of life and the promotion of human dignity. Only love within the family, founded on a man and a woman, who are created in the image of God, can assure that inter-generational solidarity which transmits love and justice to future generations. Only charity can encourage us to place the human person once more at the center of life in society and at the centre of a globalized world governed by justice."

The observant among you may notice an uncanny resemblance between these and "the priorities of a 3G Europe" identified by David Cameron a couple of months ago: Global warming, Global poverty, and Globalisation. This surely represents an incredible consensus, to have both political and religious leaders singing from the same hymn sheet. Assuming they have identified the correct issues, I wonder to what extent the building of a just society is the responsibility of the political order and to what extent the Church and broader civil society need to get involved.

They used to say that "If Jesus Christ were on Earth today, he would be a Marxist revolutionary." Perhaps today he would be a Cameroonian Conservative, encouraging non-conformity in the Church of England?