Circling around the centrality of economic system change
“Policy comes around and goes round, but things are getting worse”: so said a wise colleague at a recent event in Britain. With the Labour government now having been in power for a full year, I attended two recent events in England which each in different ways offered useful perspectives on the state of play with Community Wealth Building globally and in the contexts of the particular challenges in Britain and America.
The first event was the Power to Prosper summer meet up event in London, a gathering focused on the work of grassroots activists and organizations tackling economic and racial injustices in Britain. This was organized by the New Economics Foundation and the Runnymede Trust. The second was the Centre for Local Economic Strategies (CLES) Community Wealth Building Summit in Manchester – an organization where until 2021 I had the privilege of being the Chief Executive of 20 years, and where we pioneered some CWB work in the United Kingdom.
Both events were crammed with important discussions and debate, and showcased a great deal of good work, being done. I commend CLES, NEF and Runnymede Trust for their continued support of and involvement in such important work.
Overall, and in the context of the economic travails at home and abroad, both events had hope, positivity and energy. As I said in my speeches and in many conversations, hope and optimism are a good thing, but can only be realized if we dig deep and understand the system level problems, call out the inadequacies, and agitate for system level solutions with strategies and policies to match. And this is where the movement for a new economy in England is still coming up somewhat short.
A Plutocratic Political Economy
In 1934, the political historian R.H. Tawney said of the UK that it remained “the oldest and toughest plutocracy in the world,” with democracy always too ready to doff its hat to established privilege and wealth. In short, system change doesn’t happen in Britain, as all governments sit within a narrow Overton Window of reactionary establishment power and the institutions that support it.
Since the Second World War, there have been all-too-brief periods of some modest progressive change and advance, most notably with the postwar Labour government which took forward the work of Beveridge and founded the welfare state and the National Health Service. But such salad days are long gone, and the political forces that advanced them are now depleted or fully co-opted into maintenance of the status quo - a combination of the centuries’ long supremacy of wealth and power and the maturing of Thatcherism into the reigning ideology of the state in various forms. There is a deep neoliberal capture of the British state that rests upon the power of the City, and the omnipotent forces of financialization. These are the true engine of what passes for growth - the growth of extraction and the locus for inequality in the economy.
The current UK Labour Government is operating within this context, and is reluctant to challenge the status quo and take strategic action which would address the deep structural determinants of ongoing economic outcomes of regional inequality, disinvestment and stagnation. As such, current government policies don’t touch the sides of the growing economic, social, racial, environmental and democratic crises that plague the country. Injustices are firmly embedded and getting worse, and the prospects for genuine change grow ever more distant and unlikely. The very best that is on offer is that things will get worse at a slower rate – with every likelihood that external shocks will speed the rate of deterioration again in the near future.
In the field of local government, and of social and urban renewal, the UK Government has emitted some reasonable statements and adopted some decent (albeit limited) plans. However, those with a longer memory understand that what is on offer falls way short of what is required in these crisis-laden times. For example, if one compares what we have now, to what we had in the past – including the marginally successful economic and social renewal programs (i.e National Strategy for Neighbourhood Renewal) of the last Labour governments of 1997-2010, we see something far less powerful, sketchier, and with far less money and weaker national progressive economic drive.
A Crisis of Unrepresentative Democracy
As we have written before, in the few places in which the center or center left remains in power around the world there is a danger of a delusional moment – “a collective wish-fulfillment exercise in which we fool ourselves into believing that small change is making a real difference”.
At the core of our difficulties here is a democratic crisis. This is brutally evident in Trump’s America, but also the case in Britain- albeit skimpily masked by the prevailing system-compliant niceties, warm words and professed good intentions. This is all manifest in poor policy formation, continued and growing poverty and inequality.
Without a huge pivot, which genuinely calls out and addresses the democratic and policy crisis and system-level problems with system-level solutions, we will inevitably see hardship continue to grow. What is already nearly two lost decades could easily stretch into a third, with wealth concentrating ever more at the top and the majority languishing in despondency and despair amid economic stagnation and collapsing standards of living and public services.
With growing citizen disillusionment in these policies and outcomes, the UK may lurch still further to the right, as the copycat Trumpian Reform UK Party continue to grow, ready to wave the Union flag, blame migrants as the enemy within, and offer simplistic and counterproductive policies aimed at ‘Making Britain Great Again’.
Building Wealth in Our Communities
To avoid this hellish prospect, there is an alternate path we must take. We must have far less faith in soft centrist policies and the cursèd plucky English spirit of making the best of a bad lot. We must adopt strategies that are aimed at getting at the fundamental deep structural drivers of current economic outcomes, including the privatization of ownership, the concentration of wealth in a very few hands, persistent regional disparities and the increasing financialization of everyday life, where the big inward investment claims or growth claims stand in contrast to the actual lived experience for most people of continued injustices and squeeze on incomes.
At the CLES event it was acknowledged (partly) that Community Wealth Building is the answer. However, whilst there was some growth of CWB in England from 2014 until 2019 – notably with the Preston Model of CWB, where our TDC fellow Matthew Brown continues to spearhead change – CWB is not a specific or explicit part of the National or even Local government’s agenda. It has slipped from the English political radar and in policy terms is in danger of being folded into the morass of soft centrism – just another thing to talk about alongside measuring wellbeing, social value, public sector reform, or mere minor reform to singular elements within the CWB five pillars, and not full Community Wealth Building actions across all pillars. (This stands in contrast to Scotland, where Community Wealth Building actions plans are in place and continue to grow.)
Many English cities including Greater Manchester have embraced the wealth extracting development of land and property rentierism. In many Local English city economic strategies (backed by UK Treasury, City of London and its drive for growth – at all costs) there is an acceptance of this economic context as a given, leaving any progressive activity to skirt futilely around the edges of these big economic drivers and framework conditions.
As real material conditions get worse, poverty deepens and injustices grow, politicians and political administrations need to be bold and take risks. So in contrast, Community Wealth Building (CWB) does not accept the system as it is, and merely talk up community spirit, community activity and hope in isolation. Instead CWB grasps the economic system change moment and has the wherewithal, understanding of the crisis, and practice for real change. It works with the activism, policies and strategy that are already there, but makes them go deeper. In this way, CWB is not just a model and a practice, but also a movement for bigger, broader base change.
When myself and TDC devised and grew the five pillar model of CWB, the intention was for a full throated rewiring of wealth via the five pillars. Our theory of change – evolutionary reconstruction – was inspired by the founder of TDC, Gar Alperovitz. As previously blogged, evolutionary reconstruction is an “approach which responds directly to the crises by displacing the existing patterns of wealth extraction, inequality, poverty, and damaging resource use and replacing them with institutions and relationships capable of delivering different and better outcomes. CWB is not a reform which regulates for and redistributes wealth ‘after the fact’ of its creation, as in traditional economic planning, strategy, and policy, but rather looks to predistribute wealth before and during economic activity on the basis of the normal operations of the new systemic design.”
As those in the CWB movement know, and as so eloquently put by the progressive Economist Grace Blakeley in her speech at the CLES summit, individualism has undermined democracy and the collective power of CWB is the solution. Community Wealth Building sets us on a course towards economic democracy. This is done through a bottom-up process of broadening economic ownership, and unleashing wealth predistribution. This begins to build up a different pattern of ownership, with a different set of economic flows associated with it.
In speaking with colleagues at both events, I discussed how in English policy terms CWB is probably seen as outside of the national and local English policy comfort zone, as it is a threat to mainstream economic convention and thus risky. As such, the danger in England is that CWB is probably weakening, becoming a generalized good intention with a dilution of any system changing power.
The Power to Prosper event in London brought together grassroots activists and organizations at the frontline of longstanding economic and racial injustice. Many were overt about how the economic system has failed, is failing, and will continue to fail many Britons. Whilst there was optimism and great work being done, many delegates were under no illusions, understanding that system compliant policies would not solve economic and racial injustice and that there was a democratic and policy crisis. Community Wealth Building for them, was not just another policy, but central to their mission for economic power, community voice and system change. In this, there are strong echoes of how activists use CWB in the U.S. cities of St Louis and Atlanta.
For me the lessons for the CWB movement are that for those who seek to create an economy and society which delivers on wellbeing and addresses poverty, inequality and racial injustices there is a need to step out of a circling pattern. Where the tendency is to describe the pain, and view small incremental changes as a sign of system change and success. Real change, realizable hope and a genuine capturing of community power, energy and spirit comes when one understands that system level problems need a path to genuine system level solutions and not mere system compliant fixes.
What goes around may come around but that ain’t good enough.
We must stop circling the question of economic system change and recognize that we are circling the plughole. The only way to respond to a systemic crisis is to offer systemic change solutions. Community Wealth Building is that offer.