Globalisation, France, USA, Brexit and Trump

At the heart of Guilluy’s inquiry is globalization. Internationalizing the division of labor has brought significant economic efficiencies. But it has also brought inequalities unseen for a century, demographic upheaval, and cultural disruption. Now we face the question of what—if anything—we should do about it.

A process that Guilluy calls métropolisation has cut French society in two. In 16 dynamic urban areas (Paris, Lyon, Marseille, Aix-en-Provence, Toulouse, Lille, Bordeaux, Nice, Nantes, Strasbourg, Grenoble, Rennes, Rouen, Toulon, Douai-Lens, and Montpellier), the world’s resources have proved a profitable complement to those found in France. These urban areas are home to all the country’s educational and financial institutions, as well as almost all its corporations and the many well-paying jobs that go with them. Here, too, are the individuals—the entrepreneurs and engineers and CEOs, the fashion designers and models, the film directors and chefs and other “symbolic analysts,” as Robert Reich once called them—who shape the country’s tastes, form its opinions, and renew its prestige. Cheap labor, tariff-free consumer goods, and new markets of billions of people have made globalization a windfall for such prosperous places. But globalization has had no such galvanizing effect on the rest of France. Cities that were lively for hundreds of years—Tarbes, Agen, Albi, Béziers—are now, to use Guilluy’s word, “desertified,” haunted by the empty storefronts and blighted downtowns that Rust Belt Americans know well. Continue reading

UBI for India

The Finance Ministry’s economic survey estimated that a modest sum of $4 per person per month could reduce India’s poverty level from 22 percent at present to seven percent. The cost would be a mere two percent of GDP, or $42 billion, which is approximately the same amount the government spends in total on food, fuel, and fertilizer subsidies.
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British Medical Journal calls for a study of universal basic income

Recently, there have been increasing calls for dialogue on a universal basic income (UBI) from political parties, think tanks (including the Royal Society for the Encouragement of Arts, Manufactures, and Commerce (RSA)), civic activists, trade unions, and leading entrepreneurs such as Tesla chief executive Elon Musk. These calls are a response to growing income insecurity, some sense that welfare systems may be failing, and as a preparation for the potential effects of automation and artificial intelligence on employment prospects in industries that might be better served by machines.3 UBI-style pilots are planned in Finland, the Netherlands, and Canada as a potential answer to these questions and concerns.4

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The Deep Place approach to sustainable placemaking

Deep Place is a holistic approach to sustainable place-making. It is grounded in an empirical concern with how to achieve more economically, socially, environmentally and culturally sustainable places and communities. It seeks to overcome what it identifies as the harmful consequences of the current dominant Neoliberal economic paradigm. Although it is not anti-capitalist, it recognises the weaknesses and failings of Neoliberalism, which is exploitative of human and natural resources as factors of production. There has been a significant drive toward Neoliberalism since the 1980s, and the costs in terms of increased inequality are all too clear (Ostry et. al., 2016). The UK is now one of the least equitable countries in the world. Income inequality has been well above the OECD average for the last 30 years. The average income of the richest 10% is 10 times that of the poorest 10%. Between 2005 and 2011 the average income of the poorest 10% in the UK fell by a further 2%, and the share of the top 1% of income earners has grown from 6.1% in 1981 to 12.9% in 2011. (OECD, 2015)

Deep Place is based on the premise that the economy is socially constructed, and it therefore argues that it can be socially reconstructed. Even some of those who have been so closely linked to Neoliberalism, such as the IMF, are now appearing to accept the significant economic and social damage that arises from the inequality it causes. Key people within the IMF have now argued that policy makers should be more open to redistribution (Ostry et. al., 2016). At the same time, the Capital Institute has argued for a form of ‘regenerative capitalism’. They suggest that ‘…today’s greatest challenge is to address the root cause of our systemic crises – today’s dominant (Neoliberal) economic paradigm and the financial system that fuels it and rules it – by transitioning to a more effective form of capitalism that is regenerative and therefore sustainable over the long term’ (Fullerton, 2015, p. 12). Deep Place does not deny the complexity of global economic interrelationships; indeed, it fully recognises the difficulties and implications of managing and controlling these hugely complex circumstances. The impact of the 2007/8 Global Financial Crisis and the as yet not fully understood consequences of the decision of the UK in a referendum to leave the European Union, clearly illustrate the limitations of national governments to control such forces. That is why Deep Place is place-based. It argues that more localised action can often have a significant impact on strengthening community resilience against these external forces. In order to be most effective however, it contends that local action needs to be coordinated and fully integrated: it needs to be whole-place. Continue reading

Goodbye, American neoliberalism.

What is to be done? First we must try to tell the truth and a condition of truth is to allow suffering to speak. For 40 years, neoliberals lived in a world of denial and indifference to the suffering of poor and working people and obsessed with the spectacle of success. Second we must bear witness to justice. We must ground our truth-telling in a willingness to suffer and sacrifice as we resist domination. Third we must remember courageous exemplars like Martin Luther King Jr, who provide moral and spiritual inspiration as we build multiracial alliances to combat poverty and xenophobia, Wall Street crimes and war crimes, global warming and police abuse – and to protect precious rights and liberties. Continue reading

Basic Income trial at Ontario

A Canadian province is to run a pilot project aimed at providing every citizen a minimum basic income of $1,320 (£773) a month.

The provincial government of Ontario confirmed it is holding public consultations on the $25m (£15m) project over the next two months, which could replace social assistance payments administered by the province for people aged 18 to 65.

People with disabilities will receive $500 (£292) more under the scheme, and individuals who earn less than $22,000 (£13,000) a year after tax will have their incomes topped up to reach that threshold.
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How the destruction of industrial Britain casts a shadow over present-day public finances

A new report by Christina Beatty and Steve Fothergill, Centre for Regional Economic and Social Research, Sheffield Hallam University

  • UK manufacturing employment has fallen from 8.9 million to just 2.9 million overthe last fifty years, and 500,000 jobs have disappeared from the coal industry. This has destroyed the economic base of many communities, especially in the North,Scotland and Wales.
  • The main effect ofthis job loss has been to divert vast numbers of men and women out ofthe labour market onto incapacity related benefits, these days Employment and Support Allowance (ESA) which accounts for almost 2.5 million adults of workingage. The highest claimant rates – 10per cent or more of all 16-64 year olds – are nearly all in older industrial areas.
  • ESA and the additional benefits received by ESAclaimants – Housing Benefit and Disability LivingAllowance for example – are a £30bn-plus annual claim on the Exchequer.
  • Low pay in former industrial areas depresses tax revenue and inflates spending on in-work benefits. Spending on Tax Credits, for example, exceeds £850 a year per adult of working age in much of older industrial Britain – double the level in parts of southernEngland.
  • The Treasury has misdiagnosed high welfare spending as the result of inadequate work incentives and has too often blamed individuals for their own predicament, whereas in fact a large part ofthe bill is rooted in job destruction extending back decades.
  • The welfare reforms implemented since 2010, and strengthened since the 2015 general election, hitthe poorest places hardest. In effect, communities in older industrial Britain are being meted out punishmentin the form of welfare cuts forthe destruction wrought to their industrial base.
  • Across most of older industrial Britain the loss arising from welfare reform is expected to exceed £750 a year per working age adult by 2020-21.
  • There is an alternative – a genuine rebalancing ofthe economy in favour of industrial production and a revival of regional economic policy.
  • Policy makers need to take a long-term perspective, look at the differences between places, and stop thinking in silos.

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