Think in Kingston round-up, November 2012
Think in Kingston October 2012 began with free chocolate from the co-operative Divine at an event to markthe International Year of Co-operatives, and ended on 30th with a discussion of the film "Inside Job" and the lessons learnt during this year's festival of ideas on money. In between, participants discussed banking, global and climate debt, alternatives to conventional banking and money exchanges, religious and ethical perspectives on finance, the "People's Budget", capitalism and the links between population and poverty and human rights. There was practical advice on ethical investment and money-saving websites and talks on Kingston's collection of Saxon coins at Kingston's libraries, and from two distinguished economists. Out in the town centre, Kingston Peace Council (pictured left in Kingston Market Place, with "David Cameron", with another photo in our 2012 Photo Album) invited shoppers to tell the "Chancellor of the Exchequer" where they thought government cuts should be made - and found a majority favouring cuts in defence.
Organisers were pleased with the good audiences, lively discussions and the range of views expressed - anyone who attended one or more of the events (some hardy people attended almost all of them) will have learnt a lot. If there was a common thread to this varied and diverse series of discussions it was that conventional economic theorists have yet to come to terms with the world as it is: people's real needs, the finite nature of the planet's resources, and the alternatives to business as usual and economic growth necessary if we are to deal with poverty and inequality, local and global.
You can see the full programme by scrolling back in the Events Calendar and many of the participating organisations and charities can be reached via our Useful Links. Brief reports of some of the discussions follow:
- The first TiK event had an international flavour and marked the 2012 UN International Year of Co-operatives. The first speaker, Sion Whellans of Calverts, a 35 year old East London design/printing co-operative, is also Vice Chair of Co-operatives London, and an elected member of Co-operatives UK’s Worker Co-operative Council. He was a mine of information about co-ops in general. The second, Charlotte Borger of Divine Chocolate (Fairtrade), described Kuapa Kokoo, a co-operative of 65,000 cocoa farmers in Ghana, who have representatives on Divine’s board and get dividends as well as fair prices and other Fairtrade benefits. This company has a unique structure but almost all Fairtrade products are grown in co-operatives.
- "Money, Metaphysics and Morality" the Kingston Philosophy Cafe discussion led by Roger Jennings, focused on the fragile, "metaphysical", nature of money and economic theory (and other ideas too) when faced with "the massive onslaught of circumstances". His very comprehensive and readable paper, full of quotable quotes and accessible examples, including some local ones can be read in full at http://e-voice.org.uk/kingstonphilosophycafe/files/view/philosophy-cafe-briefings/Money,_Metaphysics_and_Morality.pdf. Discussions on money and work continue at Kingston Philosophy Cafe during November 2012.
- Students from Coombe Girl's School debated whether Amnesty should include poverty in its human rights work. Amnesty Kingston chair Pascal Egan commented: "We were incredibly impressed by the level of research and arguments. Considering this topic has perplexed our members for more than four years, the Coombe Girls' pupils really tackled this head-on."
- Although there was no event aiming to explain the basics of economics, e.g. what is GDP and why is it important?, two professional economists spoke, the first being TiK’s keynote speaker, Diane Coyle, author of "The Economics of Enough" and head of economic consulting firm, Enlightenment Economics. As indicated by her title, Coyle is concerned about the way our economy is run, which shows a reckless disregard for the future. She does not completely reject growth, arguing that we need to create a sustainable economy, using GDP alongside a greater range of economic indicators looking at national wealth in its broadest sense, including natural and human resources. Government needs to take a long term view and engage citizens in a process of debate about the difficult choices we face in order to rebuild a shared commitment to the future of our society.
Coyle’s argument for some growth seems to hinge on the greater wellbeing that growth (financial wealth) leads to. In this her views conflict with evidence from last year’s Think-in-Kingston on Happiness where it was apparent that, beyond a certain point (which developing countries are far from) growth does not create greater wellbeing, and we were shown is data demonstrating that welllbeing had not increased in the UK since the 1970s (and in the USA since the 1950s). By comparing present day UK statistics with those from the 1950s, Coyle showed that happiness is greater now (though the 1950s were not long after World War 2, and rationing did not end until 1953). Similarly, the distress of women in a BBC2 series where people lived an Edwardian lifestyle was used to argue that life is definitely better now. Whilst this may be so, it is scarcely surprising that it is hard to adjust to a totally different lifestyle, and Edwardians might well find our lives distressing (noisy, hectic, etc). The example used was the lack of shampoo in the Edwardian era when, presumably, ordinary soap was used to wash hair. Since, even in the 1950s, it was almost normal to wash hair in collected rainwater (soap is then easier to use), it seems likely that the Edwardian Farm people had not yet experimented with rainwater!
- The second economist, Tim Leunig, had just been appointed policy advisor in the Department for Education, and so was unable to speak on anything pertaining to current government policy. Despite this restriction he gave an interesting talk on the 1930s depression, placing it in historical context (e.g. minor in comparison with the depressions following both world wars), and arguing that what brought us out of depression was large scale house-building by the private sector, made easier by low interest rates. One of Leunig’s graphs illustrated the fact that interest rates are often negative (when inflation is higher than interest rates).
- This point relates to the criticism of usury made in the Kingston Inter Faith Forum (KIFF) event, where there was no direct mention of inflation despite the fact that, in recent history, inflation has been much higher than most interest rates, meaning that the borrower is gaining far more financially than the lender, e.g. during part of the 1970s inflation was well over 20% and mortgage interest rates ‘only’ about 15%. The use of local tokens instead of money was also raised at the KIFF meeting leading to a question from the audience: ‘how is it different from the black market?’ It does avoid paying tax on transactions but is usually used by people on low incomes unlikely to be tax payers anyway.
Over 20 people attended a lively and interactive event on participatory budgeting, "The People's Budget: putting our mouth where our money is", presented by The People's Budget and Localism Club, about local communities making direct decisions on how public money is spent. Alan Thornton from The People's Budget presented the idea of participatory budgeting, considered some international and UK examples and led a discussion on how it could work in Kingston. Cllr Vicki Harris from Tolworth and Hook Rise ward, where a form of basic participatory budgeting involving the community voting on grants to community groups from a £10,000 pot, had recently been tried, filled attendees in on the Tolworth experience and answered a barrage of questions from an audience ambitious to do even more.
The discussion revealed a lot of underlying issues about the way that public finance works in this country, not least the centralised nature of the system, both in terms of the hoarding of financial decision-making powers by central government and in the relatively limited budgets devolved to ward level. However, a key lesson was that the most important thing is to make a start and set up a process that is repeated regularly, getting people used to the idea of making collective decisions on how to spend public money in their local area and creating a basis to build on. Soon after the event it was announced that the Tolworth pilot was being run for a second year and was being extended to all three wards in the south of the borough, a commitment to be applauded in these tight financial times.
For more information on participatory budgeting visit www.peoplesbudget.org.uk or www.participatorybudgeting.org.uk. For comment and opinion on local public finance and democracy issues visit http://localismclub.wordpress.com
- Our local Kingston LETS scheme was addressed in an event on alternatives to conventional money and banking, also covering credit unions, including the new Kingston Savers credit union, and the gift economy.
- Concern over debt of all kinds (rather than interest specifically) was an underlying theme of several meetings, this being the major source of present financial woes, whether the borrower be an individual, a company or a country. In the Positive Money event Ben Dyson explained how private banks now create 97% of all money in the UK via their lending, i.e. as debt. (cf Martin Wolf, Financial Times: “the essence of the contemporary monetary system is the creation of money, out of nothing, by private banks’ often foolish lending”.) Positive Money argues for reforms of the banking system, including full reserve banking.
- The important global context was returned to in "How debt rules the world" which covered both financial and "climate debt". Debt owed by a country is called sovereign debt. There is no way out, no bankruptcy procedure, for countries, meaning that lenders think they will always get the money back at some point. Eventually lenders may give up and sell the debt on at below its nominal value to "vulture funds" that pursue countries through the courts trying to get some money. This is happening to Greece at the moment but is more usually heard about in relation to developing countries, whose debts were often incurred under autocratic regimes whose rulers used the money for their own purposes. A formula worked out for the G8 calculates "unpayable debt" for highly indebted poor countries (countries pay only a certain percentage of GDP, a precedent set for Germany when heavy World War 1 reparations proved unpayable). Under a lengthy procedure, where a highly indebted poor country meets certain stiff IMF conditions, some debt has been written off, greatly benefitting the countries concerned. The concern is now that these debts are not allowed to build up again - see www.jubileedebtcampaign.org.uk/.
Climate debt refers to the debt the industrialised world owes to the rest of the world since the former have created the climate change we are undergoing, and this is already causing significant difficulties for the poor who are always impacted earliest and hardest. Many industrialised countries, including the UK, recognise this and are setting money aside to help the poorest countries adapt to inevitable climate change. In their manifestoes most UK parties promised to give this aid as grants, not loans, but the present government has given it to the World Bank to use as loans. Some recipient countries are already very indebted, e.g. Bangladesh, where the Ganges delta floods every year anyway, so they are unlikely to be able to repay the loan. Although the government has recognised the unfairness of this and shifted some money into a World Bank grant scheme, money is still being given for use as loans. After the meeting, some people stayed to make a paper chain of green links with people’s comments and or names on. At a meeting with Edward Davey, local MP and Secretary of State for Energy and Climate Change, the chain will be presented to help him argue this case in government. In late November he represents the UK at the Doha Climate Summit where there may be pressure to change this policy (as well as to lower other goals).
- Three events addressed the hot topic of what the UK government should spend on or cut. Kingston Peace Council engaged with the public in Kingston town centre on 3 different occasions whilst another event, ‘Money can’t buy me love’ took place at the URC church. ‘The People’s Budget’ at Kingston library explained a procedure enabling local people to have a say in how a proportion of local government money is spent. Something similar was trialled recently in a Chessington ward and will be repeated in all three Chessington wards shortly.
Kingston library held a talk by local author Tim Everson on the Saxon Coins and 17th Century Trading Tokens held in the Museum next door, and all month there were “Follow the Money Trail” guides for visitors, highlighting the money-related objects in the museum. There was even an event for children, organised with Family Learning (pictured right, with more photos in our 2012 Photo Album), with about 30 children coming along to Kingston Library to hear money-related stories, make money boxes, and play money games.
- Roger Martin, Chair of the charity Population Matters gave an excellent, thugh disturbing, talk about “Population & Poverty” at the meeting organised by SW London Humanists. He used some striking figures and images to convey the fact that, on our finite planet, the world’s population is continuing to increase rapidly, while even the current level of consumption of resources is unsustainable. In 1750, human beings and their livestock accounted for an estimated 12% of the world’s biomass; now it’s 98%. The population grew by 85,000 just in the time between the speaker leaving his home in Somerset at 11am and the beginning of the meeting at 7.30pm.
At the same time, population growth remains a taboo subject, largely thanks to a combination of hardline feminists (who mistakenly consider it an attempt to control women), the Catholic Church (which remains firmly opposed to any form of birth control), and baseless concerns that it means coercive policies (along the lines of China’s one-child policy). The result is that aid going into addressing it is only around 10% of the Goldman Sachs annual bonus pot. This is not simply an issue for the developing world: the UN projection for the UK’s population is a range from 64 to 82 million by 2050, when England is already the most crowded country in Europe.
The growth in population will certainly not continue. The question is whether it will be stopped by the implementation of sensible policies, such as improving education for women in sexual and reproductive health, and for both men and women on the benefits of limiting family size (see one good news story in the Economist). The alternative is nature’s way: war, famine, social breakdown and disease.
- "Inside Job", a documentary film guaranteed to make audiences angry, may not have been the most cheerful finale to Think in Kingston. Although set mainly in the USA, much of the film resonates here: huge and unjustifiable wealth inequalities, the impacts of recession on the poor and the young, the discredited (yet still credited) work of ratings agencies and economics academics, and the shameless impunity with which the financial services seem to operate and their vociferous opposition to regulation. But watching an extract and then discussing what ordinary members of the community, as consumers, savers, investors, voters, could do about the cronyism and abuses of power we had just seen turned thoughts in slightly more positive directions. Why should we, the 99%, put up with the greed, arrogance and corruption of the 1%? Had the rest of the festival taught us anything? What could we do in Kingston?
Suggestions included: create or find a petition to sign (useful websites mentioned included Avaaz, 38 degrees, which currently has a petition about the banks, the Government petition site which has dozens of petitions about the financial sector); write to your MP with specific questions and proposals (about the need to limit economic growth, to invest in sustainable industries, to regulate the financial industry, to separate retail banking from investment banking and let the latter fail if need be; become an ethical and active investor and saver; lend small amounts of money to those who need it most by bypassing conventional banks via micro-lending organisations such as Kiva or, closer to home, credit unions; look at the website and ideas on full reserve banking of Positive Money... And if you get the opportunity, do watch the entire film, including the fascinating interview with director Charles Ferguson.
You can find more links to some of the issues, organisations and charities involved in this year's Think in Kingston events in our Useful Links section.
Some more ideas on money:
“I finally know what distinguishes man from the other beasts: financial worries.” Jules Renard (1887-1910) Journal
"Too often our reflex is to discover a problem and then throw money at it, hoping it will somehow go away.” Kenneth B Keating, New York Times, 24 December, 1961
“Men do not realize how great an income thrift is.” Cicero, Paradoxa Stoicorum, 46 BC
“The only people who believe in infinite growth in a finite world are madmen and economists.” Economist Kenneth Boulding (1910 –1993)
"Money is like muck, not good except it be spread" Francis Bacon
"Let me issue and control a nation's money and I care not who writes the laws." Mayer Amschel Rothschild (1744-1812), founder of the House of Rothschild
"Banking was conceived in iniquity and was born in sin. The Bankers own the Earth. Take it away from them, but leave them the power to create deposits, and with the flick of a pen they will create enough deposits to buy it back again. However, take it away from them, and all the fortunes like mine will disappear, and they ought to disappear, for this world would be a happier and better world to live in. But if you wish to remain slaves of the Bankers and pay for the cost of your own slavery, let them continue to create deposits." Sir Josiah Stamp, President of the Bank of England in the 1920s and the second richest man in Britain
Money is "...the oil which renders the motion of the wheels smooth and easy" (Philosopher David Hume, 1752)