Friday, 22 November 2013

"Local Protectionism" - the New Weather Institute and the promotion of poverty


David Boyle from the New Weather Institute (a sort of nef on steroids) asks us to name the 'local economics' his organisation and others are promoting:

The prevailing economics of regeneration is based on the idea of comparative advantage.  Places need to specialise, otherwise – heaven forfend – everywhere will have to build their own radios or cars or anything else.

Or so the old-world economists mutter when you suggest that ‘comparative advantage’ might be taken too far.

Because when it is, what you get is too few winners and far too many losers, places that are simply swept aside in the narrowly efficient new world, where only one place builds radios.  Or grows carrots.

Now, as we know, comparative advantage - while not being the be all and end all of trade economics - is a pretty fundamental concept. And the idea that there will be only one place building radios because of 'comparative' advantage is, to put it mildly, nonsense. And here's a rabid right-wing economist to explain the nonsense - his name is Paul Krugman:

At the deepest level, opposition to comparative advantage -- like opposition to the theory of evolution -- reflects the aversion of many intellectuals to an essentially mathematical way of understanding the world. Both comparative advantage and natural selection are ideas grounded, at base, in mathematical models -- simple models that can be stated without actually writing down any equations, but mathematical models all the same. The hostility that both evolutionary theorists and economists encounter from humanists arises from the fact that both fields lie on the front line of the war between C.P. Snow's two cultures: territory that humanists feel is rightfully theirs, but which has been invaded by aliens armed with equations and computers.

Put simply the losers in David Boyle's 'local economics' are - as with protectionism everywhere - the consumers. This supposed 'resiliance', this much vaunted 'susatainability' and this self-important 'social responsibility' all comes at a cost. And that is higher prices, less choice and more poverty.

Getting people to scrat about in fields doing "sustainable local growing" is not an economic policy - it's a good idea, good for health, good for community but if it's your economic policy then it's a step back towards living in mud huts and relying on subsistence agriculture, the sort of policy Oxfam promotes in Africa rather than giving Africans access to trade, investment and economic growth.

What poor communities don't need is another bunch of middle-class sociology graduates arriving on their doorstep with another big hug. What they need are better schools, good homes and an idea that there's something beyond the horizon, a route out from poverty. What The New Weather Institute are offering is a future of gentile poverty with vegetable growing not a genuine economic future for poor communities.

The name for David Boyle's 'local economics' is an old one and a bad one: protectionism.



Anonymous said...

Here is a little missive what I wrote a while back; as there is a limit, I will have to divide it over several posts (however, I very much doubt that David Boyle with read it, anyway):

Progress, simplified. For the hard of thinking. Or, why wind power may be so much hot air.

I will type this very slowly, for those who cannot read very fast.

The wind blows everywhere, usually at varying rates, often in varying directions. Hanging an electric plug outside in the wind will not give you electricity; the wind has to be harnessed. To use the wind for travel, this is done by rigging sails (which is what those big sheets on the posts – called masts – sticking up on boats are called). The wind blows on these sails and the boat moves. On land, sailing becomes more difficult, and most people do not even try. However, the wind can be used. In the olden days, before even your parents were born, the wind was used in windmills to grind grain, and to pump water.

Then came the Industrial Revolution. This started with engines driven by steam. This steam was generated by burning wood and coal. Wood is easily found; just go outside, and you can find it lying around on the ground below trees and bushes; it is what sticks are made of. If you want more, you can cut down the trees and bushes. Coal is more difficult to find and to get, as most of it is underground, so you can only get it by digging for it – by mining. Mining helped to fuel the Industrial Revolution, which helped to make mining easier, which gave more power to the Industrial Revolution, and so on.

(Are you with me so far? If you are having difficulty, look up those words I have highlighted. If necessary, get your teacher to help.)

With the more reliable source of power that engines gave, the fickle nature of the wind was abandoned. Engines became more reliable, more varied, using different fuels. The most commonly-used engine today is the internal combustion engine, where the fuel is actually burned inside the engine! Isn’t that amazing? Even the car that your Daddy drives has an internal combustion engine, using petrol (short for “petroleum”; it is also known as “gasoline”) or diesel for fuel. Some engines use petroleum gasses for fuel; this is mainly methane (CH4), which is in natural gasses found deep underground. This is most usually compressed so much, or chilled so cold that it condenses into a liquid; in other words, it is liquefied, giving us the phrase, “liquefied natural gas”, commonly shortened to “LNG”. Never, never try to touch LNG. At -160°C, it is so cold it will freeze your hand immediately, killing the flesh!

Petrol and diesel, yes, and even LNG, are obtained from crude oil. Like coal, crude oil is most often found underground; like coal, crude oil is usually black; like coal, crude oil is usually very dirty. However, unlike coal, crude oil gives us more than just fuel for our engines; it gives us plastics. In fact, it has given us everything that we have in the modern world. Look around you; there is nothing that you will see that is not there, either directly or indirectly, because of crude oil; its use seems to be limited only by the limits of our imagination.

Radical Rodent

Anonymous said...

Our discovery and application of the potential of crude oil is what has helped to raise the human race out of drab servitude on the land to the freedoms that we all take for granted today. Less than 150 years ago, children younger than you – some as young as 4 or 5 – had to work, and work in the most appalling conditions; dirty, dusty, dank, dark, and very, very dangerous. Many children were killed or died, or were maimed in most horrible ways, working up to 15 hours a day, often for every day of the week. Those who survived into adulthood found life no better, and continued working 12, 15 or more hours a day, 7 days a week. Most of the money earned was spent on food, clothes, or shelter; there would have been very little left over for luxuries, like a holiday, or even meat.

It might seem odd, but a lot of this pain and suffering was because of the Industrial Revolution. Being revolutionary, no-one was too sure how it should be operated; all they knew was that the engines provided the power for the mills, which could then process more raw materials, producing more goods (or commodities). At first, the dangers were unknown, and it took a lot of time, and a lot of very brave people, to identify the dangers, to see how to reduce them, then to reduce them to the levels we now enjoy.

The cost of anything is an indication of the time taken, and energy spent, to make it; when clothes are made entirely by hand, you have to allow the time to collect the raw material (let’s say wool, for this example). This has then to be processed (removing knots, seeds, and so on); then spun into a thread. The thread has then to be woven into cloth. From this cloth, clothes can be made. This takes a lot of time, and a lot of personal energy, and the quality of the cloth is very much dependent upon the skills and patience of the person processing, spinning and weaving the cloth. In an industrial mill, all the processing, spinning and weaving is done by a machine. A person may have to operate the machine, but the skills and patience required for this are different and not as important as for manual production to get a larger quantity and a more constant quality.

As a square metre of cloth is produced in considerably less time, using far less energy than by manual production, so, with the growth in production came a reduction of cost of production, as well as an increase in the quality of the products (or goods), so the higher quality products became cheaper. This meant that dressmakers paid less for better quality material, and could pass that saving on to the customer, so the cost of clothes reduced, and people could buy better clothes, and more clothes. The same is true for other products, too.

So, why did people choose to leave working on farms, where the dangers were known, to work in the mills of industry? Because, on the farm, the work was hard, and the rewards were few; and there were still a lot of dangers. Cloth for clothing was rough, and comparatively very expensive. Food may have been cheaper, but that was because you grew it and harvested it yourself. The house you lived in may have been very basic, and poorly constructed, and you often had to sleep in the same building as the animals. There certainly would not have been running water, or even lavatories.


Anonymous said...

With the growth in industry came a growth of jobs in industry. Work in the mills of industry was often inside, away from the chill of the wind and rain, so more comfortable. It was often quite simple work, and did not need heavy lifting, so was usually a lot easier than work on the farm. As people could now develop a smaller range of skills, so they became better at those skills, and specialisation developed, which helped to advance progress even faster. Also, industry created machines to help the farmers, so that, now, one worker can produce more food than 100 – or even 1,000 – workers once did.

The owners of the industries had to provide homes for the workers, and towns grew. The houses in these towns were often of better quality than many on the farms, and with better services. Eventually, the houses had water piped directly to them, and the waste piped away. With running water came better cleanliness; with better cleanliness came better health. Gas and electricity followed, so the houses came to be as we know them, and people started living longer, healthier, happier lives. This all happened within the space of less than 100 years.

However, industry suffered the usual problems that new ideas have – it made lots and lots of mistakes. Many of the mistakes, and many think that the worst mistakes, were in the treatment of the people employed in industry – the workers. Brave and forward-thinking people worked hard and helped to correct these mistakes, and now the workers are a lot, lot safer, a lot wealthier, healthier, and generally happier than 160 years ago.

There are still many people who think that the very idea of having someone employ another person to do jobs that he cannot do, or does not want to do, is wrong; it is demeaning for the person doing the work. Consider this: whatever you buy, whether a jet plane or a pencil, you will have made a lot of people work for you. When you buy a pencil, you will have employed a sales assistant, making them work for you. You will also have employed the shelf-stacker; the stock-controller; the delivery driver; the packer; the machinery operator; the production controller; the yard operator, all the way back to the lumberjack cutting the tree down to give the wood for the pencil. In buying that pencil, you will have employed at least a dozen people, making them work for you; many will be doing jobs you cannot do, or do not want to do. Do you think you are wrong?

Without people to dream up new ideas for new products, without people to arrange and organise all the people and the equipment required to realise that dream, there would be no-one working for someone else. This is the fantasy of a lot of people. However, like many fantasies, it has no connection with reality, as there would still be workers, but there would be no progress. There would be no houses, there would be no cars, there would be no roads. We would all be workers, and of the lowliest kind, still living in caves and working outside, dressed in animal skins and coarse cloth and working hard, using stone tools to scrape a bare living from the ground for all of our short lives, because it is not possible for just one person to make a pencil.

bruce said...

Thomas Hardy. Were England's rural masses happier in the 19th century fields, or now in front of their Playstations in their council houses? Who cares for 'freedom' a mere word with vague meaning, mostly destructive.

Caves? Skins? It's labour-intensive agriculture versus industrial and post-industrial England: which has millenia of history, or hadn't you heard?