To QUB's Politics Department on Saturday for the well-attended inaugural seminar of the Centre for Progressive Economics: The Global Economic Crisis: analyses and responses.
The CPE is a new forum for progressive discussion on economics and social policy. As the web site says:
At this time of global economic crisis and the literal bankruptcy and socially negative impacts of ‘business as usual’ stimulus packages there is a pressing need for fresh thinking about our economic future. This is an alternative and the Centre for Progressive Economics will seek to provoke debate as to that future in the Northern Ireland regional economy and beyond.The seminar included three excellent speakers: Dr Andrew Baker from QUB, Andrew Fisher from the Left Economics Advisory Panel (LEAP) in England, and John Woods from the Green New Deal in Northern Ireland. Presentations will be available on the CPE web site.
Not being an economist, I learned a huge amount, which will contribute to the new lecture on the economic crisis which I’m preparing for my second semester property development class. I’m still coming to terms with the alternative approach, which was brilliantly covered by Dr Baker (although somewhat challenging for a Saturday morning after only one cup of coffee). He debunked the various statements that are becoming received wisdom (as is also done in this ICTU pamphlet and by LEAP). For example, contrary to popular belief, the UK is not on the verge of bankruptcy and debt has been much higher at times in the past, for example after World War II.
But for me, the most spurious claim is that it’s all Labour’s fault - and Labour is not contesting it nearly as strongly as they should. Yes, there was failure to regulate financial institutions, which contributed to the crisis, but its roots lay in excess ‘financialisation’, which is increasing the ratio of cash loaned against assets owned and therefore increasing the risk of a default on payments (according to this new book by David Harvey). Thanks to Dr Baker, I have now discovered the phrase ‘countercyclical fiscal policy’, along with the need to dig out my old textbooks on Keynes.
Andrew Fisher told us about the work of LEAP in England, which provided some ideas about how CPE might develop. LEAP have gone for the bigger picture and propose a number of ways to increase revenue without making cuts in public services, as well as a programme of ‘green’ investment and building more social housing as ways to provide public benefit and create jobs. However, I preferred the smaller scale, more pragmatic approach of John Woods and the Green New Deal for Northern Ireland. The presentation gave most detail about the planned Housing Fund to retrofit homes to high standards of energy efficiency. The funding model includes both government grant and private sector loans, the latter to be repaid by households as their bills reduce.
So it was a very worthwhile morning. I left feeling more convinced of the arguments against cuts, and for spending our way out of recession. But the aspect of this vision which I don’t think is well enough developed is the question of what to do next.
That question is about economic growth. The mainstream debate takes for granted that we need it, without questioning the associated excessive and unsustainable patterns of consumption. Continuing to buy more imported stuff which is produced in awful conditions won’t contribute to the quality of life of the people who made it, or ourselves. But on the other hand, no growth means lost jobs, a reduced standard of living, and less opportunity for redistributive policies.
Or does it? Does the concept of the steady state economy mean that a new approach to production be envisaged, including for example the green economy, and socially beneficial services which can’t be delivered from India or China, and the knowledge economy? Who is left out of this mix, and who will pay for it given that so many proposals seem to require public subsidy?
There may well be convincing answers to these questions, which I have yet to discover. But if not, only half the argument has been made.