Since the last post has had some interest, and has guided me to a number of others, I thought I would share some with you. First, thanks Anthony for the Tweet, and it is only right to point out his post on new models of ownership, which (I think) seems to draw on thinking related to “commons” in giving ownership a role:
Last week’s Labour movement column argued that the left should properly acknowledge the importance of ownership in distributing power more equitably. Here is an opportunity to develop new forms of ownership that can be engineered towards reducing our impact on the environment . . . Each community (based on local authority area) could establish an environmental cooperative. . . . The objective of the cooperative would be to reduce that community’s carbon emissions by say 10% within five years.
“Each community could establish an environmental cooperative”. I would just want to focus on that. ‘Could’ or ‘will be made to’? Do I have to join up with other Putney people? If so, Anthony has bravely argued that to deal with Global Warming we will need quite a lot of coercive behaviour. What are the penalties for not? But if it is not compulsory, then can it really deal with this very real emergency?
I think this is John Lewis again. Some – nice – people may adopt other forms of ownership/’reinvent the firm’. But if this is not widespread, the effects will be marginal – interesting to readers of Prospect, but not worth a massive Westminster policy launch. Or it will be coercive and illiberal – ‘you may want to form a shareholder company dedicated to profit but we will not let you’.
Michael White: always very shrewd about noticing purely political aspects.
Cameron needs a flourishing range of centre-right thinktanks from which to pluck handy ideas at will; all recovering oppositions do . . . Will ResPublica’s new brand of civic conservatism be the answer ‑ or just another intellectual bubble? Blond’s stint at the ex-Blairite, pro-localism thinktank Demos ended abruptly: he may not be a team player . . . Politicians need intellectuals on tap, but the Cameroons are prudently keeping a safe distance. The Tory leader will not stay long tomorrow.
Paul Bickerstaff gets to the point:
Agency workers won’t be too enthusiastic about Phillip Blond’s bland plans for them to become part of a classless, asset-owning society Nor, I suspect, will these exploited agency workers have too much time and energy left over to join Blond’s Time Banks (the things they still call LETS, another product of the 1980s, and another pleasing venture which failed to achieve critical mass impact).
No. They’d rather have the money.
How awfully individualistic of them.
I think this is Sunder at Fabians: I like the Blond on blond theme (Blond going against Thatcher).
In other news, I don’t think CentreForum research will ever get mentioned by Larry Elliott. His piece touches on stuff thoroughly covered by A Balancing Act and Slash and Grow. But instead it talks about Policy Exchange. Ho Hum. But this is the sort of context their history lesson (see yesterday post) needed fisking with:
The reason the UK grew after 1931 was that sterling was the first currency to come off the gold standard, and took advantage of a big devaluation to cut interest rates to 2% by early 1932, where they remained virtually unchanged for 19 years. Britain also threw tariff barriers around its colonial possessions; it was the combination of depreciation, cheap money and imperial preference that caused the recovery.
Finally, not all is rosy: Dubai, going down the tubes? A very interesting story I would love to cover in more depth, but I’m busy working out how much the Bank has overpaid for Gilts. I have gone there three times on holidays, and always wondered: who is going to actually live in all these buildings? So, anyone feel like buying the World?
Freethinking Economist 
Interesting point about takeup, twice. John Lewis mutuals are fine as long as thousands of them crop up – I’d guess you need a quorum to make the scheme worthwhile, which as you said may involve coercion. Or, it may involve strong local political leadership and a working demonstration that can convince people that it can be an effective model – now that’s wishful thinking 🙂
Paul Bickerstaff’s point is something that is sorely lacking from Tory thinking – a lot of centre-right thinking for that matter – i.e. that things which Kensington housewives and other folk with no financial obligations can’t always be rolled out across the country. Mutuals, co-operatives, third-sector, all of these are seen as luxuries by those on median income and below – timewise and moneywise.
Problem is co-operatives are attractive for liberals – question is how to make them an effective vehicle for delivering public good…
In the last post you wrote: “A market is not a Thing that Lays Claim to anything. It is a way of buying or selling . . .”
Now, I am not seeking to defend the argument that you were attacking there, so please don’t get me wrong, but as an insight into many other areas where economics fails to spread light …this is a good example.
A market is a set of social relationships. When a buyer and a seller meet to negotiate a transaction, they don’t just have ‘profit maximizing’ or ‘utility optimising in mind’. It is a social dance and it is more than likely that the seller has made herself believe that she is doing good in all kinds of ways to both the potential buyer, the rest of the marketplace, the wider town and indeed her society. She selling locally sourced and organically reared chops.
The potential buyer thinks his choice is a good one too, he likes the seller, her family, her way of doing business, her commitment to their (both buyer and seller’s) town/agriculture/shared values. What he is buying will not only be useful to him but to his family and friends and neighbours who will get to share it when he invites them round for a spot of Gloucestershire Old Spot, and he’s been very careful in selecting this seller’s product to make sure it fits his own moral values – he’s chosen one with a small carbon footprint, or a chop from a locally sourced pig from a organic farm down the valley. It makes a good conversation piece at table and says a lot about himself to his friends and neighbours.
Even those dealing electronically via screens and broadband connections are more than likely believers in the ‘good’ of the hidden hand, which their style of trading makes possible.
So those who interact in markets lay claim to a belief that they are doing good – even when on lookers across the street think they are villains.
When stripping the human and social out of economic relations, economists will always be wide of the mark.
Hi Bill
What you seem to have successfully done is describe about 1% of transactions, in which the likely carbon attitudes of the seller and or buyer have any relevance whatsoever to the matter. To use them as an archetype for all or indeed any of economics would be somewhat misguided.
It is not “more than likely” that such ethical fun and games will play any part the transaction, regardless of how strenuously Phillip Blond et al wish for it. I could download my year’s banking transactions into a spreadsheet; if I were to tick the ones where it was of the slightest relevance what I thought of the attitudes or behaviour of the seller, it would take about 5 minutes.
Nor do traders, department store purchasers, or any other set of people, embark upon trades or transactions with some theory about hidden hands. Those of us who have read Smith may do so, but we are a minority.
best
G
Nor do traders, department store purchasers, or any other set of people, embark upon trades or transactions with some theory about hidden hands. Those of us who have read Smith may do so, but we are a minority.
we are!
Bill, unfortunately many people would love to base their choices on what is ‘good’ or ‘best’ for them and their conterpart in a transaction – and yet are forced to make a choice best on what’s cheapest and most readily available. Take the example of Tesco vs independent grocer – many people would like to choose and pay their local indepenent grocer as it’s ‘better’ to do so – and yet wind up buying from Tesco as they dominate the market. (I’m sorry to say I have no stats to back this up so beware…)
Perhaps in a truly Smithian market, with no oligopolies and geniune connections between buyer and seller your hypothetical variables enter into the equation – but in real life, as Giles says, not so much.
Btw I’ve just read the chapter on markets and morals in Justice by Michael J. Sandel, well worth a read for what it has to say relating to asymmetric markets and choice…
Giles,
If only we had time to go through your purchases, I believe I could convince you that not a single one was made without a thought about what light it presented you in to others – our choice of a cd, for example, is as much to do with how we want to project ourselves as pure musical enjoyment. In making every choice we are looking over our shoulder, grooming our image, sending a message, making a statement about our values (for the benefit of others near and far), expressing solidarity with some or separation with others as we use consumption to position ourselves in our communty and relate to others. Why do I reject the BMW and select the Volvo?
My example of the Gloucestershire Old Spot was meant as an amusing example. Sorry it didn’t strike you as such. But peope do use many, many of their purchases to champion a way of life, their way of life. So too was the dealer/trader sleeping at night because he’d played his part in allowing the hidden hand to do its work!
I think most people in whatever job they do have convinced themselves that they are doing good even if it does involve selling old cars.
Mary Douglas and Baron Isherwood wrote an excellent book on this sort of thing: http://www.amazon.com/World-Goods-Towards-Anthropology-Consumption/dp/0415130476
Economics will fail as a ‘science’ until it abandons its solipsistic approach with its reliance on the rational man, isolated from society.
Teek,
Yes, but why Tesco and not ASDA?
There are those who shop at ASDA who ‘aspire’ to shop at Tesco. Why? Not because the product or the shopping experience is better but because it communicates to others in their neighbourhood that they are Tesco people, not ASDA people and not those snobs who shop at Waitrose.
Clearly the marketeers know and play on this and their understanding is cultural.
An amusing story (I hope). When Labour ran Liverpool CC after Hatton it was deeply split into sub-groups. One was called the Sainsbury Group by themselves and by the others further to the left and to the right, not just because that was where they shopped (not all of them did) but because it was their way of ‘positioning’ themselves and being positioned by others on the political spectrum. Here economics was political.
Thought for Today (R4) was interesting this morning with Jabbi Jonathan Sacks talking about a notion of Justice that has the element of charity within it, which he says is alien to our system of jurisprudence.
An anthropologist might explain that a society that felt over generations its borders threatened selects endogamous marriage norms and this is mirrored/reinforced with elaborate food taboo rituals and further reinforced with a notion of justice that includes charity for and between those within those borders.
In a Medieval Britain run by a hierarchical church could not conceive of justice without a notion of sin.
While in a ‘market economy’ our notion of justice shadows the market and cannot cope with containing a non-market element such as charity.
B
Bill, honestly, I do know about display-buying, and I’m a cautious fan of The Affluent Society, but I buy music because I love it. It happens on iTunes, and is listened to privately, on Tube platforms and when writing. And on the rowing machine. My post about pop music was perhaps a little showoff but the purchasing is for private utility reasons nevertheless.
Our grocery shopping at Ocado is pretty functional.
I am not discounting moral considerations absolutely. I quit my old job partly because I did not like the direction it was heading – further down the food chain – although hving made enough money was a pretty major consideration too.
All economic transactions are bounded by the insitutions designed to facilitate and restrict them. Economic historians have always know this: see Douglass North for the best example. But where we differ, perhaps, is in how far this insight can be applied as a conscious lever of policy making. It’s like the question I was asked in Bournemouth: why not be like the French? To which I made some sarky but correct answer: what Act of Parliament could do that? It would have several pages about Boulangeries alone . . .
G
Ok, I wasn’t talking about display, believe me; so you switch on the radio at 4.00 pm to hear that Pietersen is not out 26 and trhe total is 320 with 5 overs to go. What do you know? Well it’s either South Africa versus South Africa and Trott has made 100 … or … It’s just South Africa.
Off to Birmingham on the M6.
As an oxon, you should try Sophie Solomon – who is not without campaigning experience, I can tell you. http://www.myspace.com/thisissophiesolomon
B