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How experiments can be visionary. Karel Williams Centre for Research in Socio-Cultural Change (CRESC) University of Manchester. Small experiments... big vision . So what? about small econ. experiments which can’t change the world (local procurement, housing retrofit, food and fuel)

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How experiments

can be visionary

Karel Williams Centre for Research in Socio-Cultural Change (CRESC)University of Manchester

small experiments big vision
Small experiments... big vision
  • So what? about small econ. experiments which can’t change the world (local procurement, housing retrofit, food and fuel)
  • Answer: vionarey local experiments can change the way we think about the economy
  • define the problem: distribution not growth
  • focus on what’s left: the foundational economy
  • add new policy principles:using the social franchise
  • Warm up for Alan S where Enfield is doing this
1 problem of distribution not growth

(1) Problem of distribution (not growth)

regions, localities + groups

falling behind

trickle down isn t working inequalities increase
Trickle down isn’t working:inequalities increase
  • Regions + localities + groups falling behind:
  • 30 years of relative decline ( eg Welsh/London GVA 1989-2009 = 54 – 43%) dependence on publicly funded jobs + SS for 20% of wing age
  • “ Recovery” is more of the same:
  • nearly 50% of GVA growth 2007-11 went to (parts of) London and the South East take;
  • nearly 40% of income growth goes to top 20% of households take;
  • Its getting worse with SS cuts taking £700 per wing age person out of N and W
2 focusing on what s left

(2) Focusing on what’sleft

the foundational economy

can t get over lost manufacturing
Can’t get over : lost manufacturing

What’s lost = manufacturing: employment 1970-2010 7mill-2.25 mill by 2010 , no real output increase; so manufing now is 11% of GDP with disemployed male, working class, broken supply chains, failed manufacturing PLCs

Dreams of come back: BIS industrial policy offavoured sectors ie high value manufacturing, life sciences etc; regional policy of competing for inward investment (via better training + infrastructure .

No leverage: sector sizewhen motor vehicles employ 125k, pharma. manufing. <50k; favoured sectors regionally concentrated in the M11 corridor and the Thames Valley

needs to focus on the foundational economy
Needs to focus on the foundational economy
  • What ‘s left = the foundational economy of mundane activities: everyday goods and services, sheltered + distributed according to population.
  • Employs 8 million in privatized utilities and transport infrastructure+ branch private activities like supermarket and retail banking+ state funded health and education (largest group = state funded)
  • Messed up by point value: public and private business models for least cost/ most profit at one node in a chain; egs’markets capture margins of food processors and producers; utilities pass investment cost and risk to the state, local authorities spread low wages and dependence thro lower price for adult care.
3 add new principles

(3) Add new principles

against fragmentation and value extraction

using the social franchise

what we want 1 less fragmentation
What we want (1) less fragmentation

Build coordinated provision: point value produce a fragmented economy of profit centres with underinvestment in network ( eg TOCs in trains, BT in telecomms) .

  • Think regional as space of coordinationwhenprivate sector utility brings in the product and take out the money: What has British Gas done for you lately
  • Think chain and pressure retailer or final assemblers with long supply chains e.g. regionalise in food processing and distribution, i
  • Think non-profit for eg retail banking/supermarkets/trains deliver shareholder value but not social good; state contracting out which creates vested interests and transaction costs (PFI)
  • Think pro-state revenue sources; need new sources of tax on land and property ; and why can’t state run revenue earning enterprises on the model of Jo Chamberlain’s gas and water socialism
experiment 2 less value extraction
Experiment(2) less value extraction

Build regional financial circuits; point value creates local toll booths from PFI schools to train line train tickets; financialized capitalism routes e.g. L.A. pension funds via London

Giant sucking sound ex utilities, supermarkets taking nearly £100 per week per household, pension funds, insurance contributions;

Social investment as useful things for low and steady returns

  • Back regional infrastructure: as inEnfield the best initial projects would probably be social housing (preferably council run); but not other kinds of property development (capturing planning gains)
  • Mobilise pension funds: don’tsend your pension fund to London managers but retain in the region and local community for a social purpose
  • Think 5% return maximum: your pension fund isn’t currently getting any moreand infrastructure is inherently low return, high investment secure return;

Our social franchise + local actors

  • Social franchise justification: the state franchises foundational activities + our household spend and tax revenue sustains foundational activities.
  • Central state in Westminster and Whitehall can’t and won’t challenge business models because it has bought into privatisation/outsourcing + public sector economy =
  • City regions + LEPs a poor substitute for English regional government; cities caught up in property development, ¾ of local revenue will still comes from the centre
  • Guerrilla economic regeneration at local level... What Enfield has started