Prashant in Hong Kong, an economist on tour

My friend and former colleague, Prashant Vaze, is in Hong Kong and sends me an update on food and produce that he finds there. It is the take of a veteran environmental economist, never off guard.

” The Cantonese are major foodies. I mean this in the sense they really care about the food they eat. They scour the globe for the choicest foods: live crabs from Cornwall, rock lobsters from New Zealand, sea cucumbers and abalone (sea snails) from South Africa and the infamous shark fins from whoever will sell them.

Frozen seafood retails at a fraction of the price of fresh food so where possible these items are flown in, chilled but alive, at a carbon and financial cost and then presented in restaurants, supermarkets and wet markets. Customers either select the fish at the restaurant or bring their own. The chef despatches it, then serve it a few minutes later gutted, and stuffed with rice and spices.
Its not just fish. The Cantonese are proud of their reputation of eating absolutely anything. My colleagues delight in taking me to restaurants and serving me some harmless looking piece of meat and proudly identifying it afterwards as chicken’s feet, pig’s cheek, or squirrel’s testicle (I didn’t in fact know squirrel’s had testicles).
But just because Hong Kong people are into their food – it doesn’t mean the food is necessarily all that good. Or even edible for that matter. At least thirty per cent of Cantonese food is off-bounds to me either because it uses gross parts of animals (feet, snouts, intestines), inedible species (crickets, sea cucumbers) or endangered species. 
A friend from the environmental charity WWF told me that a street close to where I lived is one of the top spots for buying illegally traded ivory artefacts, cunningly labelled as mammoth ivory. It seems CITES, the international conservation agency, is relaxed about using species that are already extinct. Its disapproval is reserved for species on the brink of extinction. 

As an economist though, I do worry about the sort of behavioural signal this sends poachers.”

Cleveland – community economic development success story

Applications are now open for communities in England to participate in the new partnership programme on community economic development. In my last post, I listed five exemplars from the UK. I have been pointed to many others pretty quickly, but also asked if I can tell the story of Cleveland from the USA. So here we go…

The Evergreen Initiative in Cleveland, USA was launched in 2007 and was inspired by the successful Mondragon Co-operative Corporation in Spain that has regenerated the Basque country’s entire economy over the past 50 years by devising an ingenious co-operative economic development approach funded by a local co-operative bank within a worker owned enterprise network. The local co-operative bank began life as a credit union for worker co-ops and it has operated with a focused mission to recycle and re-circulate low-cost capital within the local economy networks established by the worker owned firms in Basque cities.

In an adapted design for Cleveland, low-cost capital has been seeded by grant capital from the Cleveland Development Foundation and supported by different forms of tax credits as well as long-term, low-interest loans from the federal government.

Evergreen Co-operatives have so far set up three expanding worker co-operatives: Evergreen Co-operative Laundry Services that has been supported by procurement from anchor institution hospitals and universities; Evergreen Energy Solutions that has been set up both for installing, owning and maintaining solar power on anchor institutional buildings and for repairing and insulating older housing stock citywide; and Green City Growers a food growing co-operative to create jobs through the largest inner city farm in the USA and green house facilities (with 3.25 acres under glass) designed to harvest three million heads of lettuce a year and grow several hundred thousand pounds of fresh basil and other herbs – on a ten acre site in a low income neighbourhood right in the heart of the city.

The strategy of Evergreen Co-operatives links up three co-operative economic development tools. Firstly the worker co-operative model to create good jobs including equity development for worker owners and profit sharing, secondly a Community Development Finance Institution owned by the Evergreen co-op network to invest and recycle low-cost capital (as subordinated debt at a rate of 1% to create jobs) and thirdly a Community Land Trust to develop the space and sites for food growing and for developing affordable housing in the second phase of their plan. They have raised already £200 million of low-cost capital for Evergreen Co-operative Development Fund, their CDFI, and the annual procurement power of their anchor institutions is $3 billion.

Cleveland shows the power of community economic development to change the future for a city. As David Boyle says in his report for us with the New Weather Institute, Ultra-Micro Economics, “small plus small plus small plus small equals big”.

The approach has stimulated similar plans to copy the ‘Cleveland model’ in other US cities including Atlanta, Pittsburgh, Milwaukee and Washington DC. Here in the UK, there has been work in Preston, as I mentioned in my last post, and there is nascent interest among co-operative councils and with co-operative development agencies, such as Hackney Co-operative Enterprise in East London, which aims to put its own housing-related services out to locally-owned enterprises, rather than source these from outside its target neighbourhood.

The first Community Economic Development programme for a generation, open soon…

While the elephants of national political life trumpet and dance, there is a wonderful new programme starting at the grass-roots level, with cross-party support.

This is the first national ‘community economic development’ programme for a generation – reaching back to the pioneering work on community business of the Highlands and Islands Enterprise Board in Scotland and on local economies by the Greater London Enterprise Board.

The new programme, which focuses on community-led solutions for economic renewal, is backed by the Department for Communities and Local Government and will be delivered by an alliance of organisations, including Co-operatives UK, New Economics Foundation, Locality, Community Development Finance Association and the Community Development Foundation.

Anyone who works on neighbourhood development knows that local economy shapes and defines what you can achieve. No jobs, you are playing catch-up. If the bank closes, businesses close as night follows day. No business, you will have no life on the streets, but the siren hoardings of payday lenders. Some of the most inspiring examples of neighbourhood renewal are those that have turned the local economy from vicious spiral to virtuous circle.

Local authorities have a key role to play, as the longstanding work of the Centre for Local Economic Strategies shows, but there is also something different about where this is true community-led regeneration. Success tends to be where you can tap into the same spirit of self-help and mutual aid that characterises the best co-operatives. Perhaps it is no surprise that over half of co-ops (56%) are to be found in the least advantaged areas of the UK, while the enabling role of community agencies, such as settlements and development trusts in the poorest neighbourhoods is well recognised. As Pat Conaty argues, in his book on community economic development, The Resilience Imperative, co-written with Canadian community economic development specialist Mike Lewis, they create a voice for local people and a stake in their success.

The new programme will help 50 communities in England to develop their own community economic development plans. Anyone can apply from April 1st – you just need to be involved in an existing organisation – whether that’s a local community group, local business, parish council or any other local body. An experienced adviser will act as the main point of contact and will guide you throughout the process of developing a well-supported, dynamic and deliverable local economic plan – with the support of a grant of £5,000 for the further development of your plan and with access to specialist support.

What does success look like? There are some great examples set out in the report we published last year with the New Weather Institute by David Boyle, called Ultra-Micro Economics in partnership with groups like Localise West Midlands, Sustrans UK and the Transition Network REconomy Project. When I was asked to select some of the best examples I knew of, to act as illustrations, this was my suggested ‘top 5′ community economic development success stories.

1. In West Dorset, rural communities have created local food links and new food enterprises.
2. In Haringey, money and jobs are being saved through a co-operative programme on energy efficiency.
3. In Preston, the local authority, police and health services are seeing where they can place contracts with locally owned businesses.
4. In Bristol, growing numbers of people have joined the local credit union, for local savings and a currency that can be cashed with local enterprise.
5. In the Black Country, a loan fund supports local businesses turned down by high street banks to survive and thrive.

There is plenty of scope now to add more!

The Co-op Pope. Pope Francis calls for an economy of honesty

“The Church has always acknowledged, appreciated and encouraged the co-operative experience”, said Pope Francis a few days ago to seven thousand members of the Confederation of Italian Co-operatives.

Pope Francis referred to past teaching that chimed with co-ops, such as the encyclicals “Rerum Novarum”, with Leo XIII’s appeal for a society in which “All [are] owners, not all proletarians”. But he urged co-ops to look to the future: “It is a real mission that requires creative imagination to find forms, methods, attitudes and tools to combat the throwaway culture cultivated by the powers that support the economic and financial policies of the globalised world”.

He proposed five actions for co-operative action, to build an ‘economy of honesty’.

1. Co-operatives should “continue to be the motor for lifting up and developing the weakest part of our local communities and of civil society”. This involves “giving first place to the foundation of new co-operative enterprises, along with the further development of those already in existence, so as to create, above all, new work opportunities that currently do not exist … especially for the young, as we know that youth unemployment … destroys their hope”, but also for the “many women who need and wish to enter the world of work. We must not neglect the adults who often find themselves prematurely without work. Aside from new enterprises, let us look also to the companies in difficulty, those that the old owners leave to die, which could instead be revived through co-operative ‘workers’ buy out’ initiatives.

2. Look to become active agents of new welfare solutions, above all in the healthcare sector, “a delicate field where many poor people no longer find their needs to be adequately met”. The answer may be found in applying subsidiarity, “with strength and coherence”, creating an effective network of assistance and solidarity between co-operatives, parishes and hospitals.

3. Co-ops can be symbols of a different approach to the economy. “It is well known that a certain liberalism believes it is necessary first and foremost to produce wealth, and that it is not important how, before promoting any form of redistributive policy”, explained the Pope. “Others think that it is the same enterprise that must donate the crumbs of accumulated wealth, thus absolving it of its so-called ‘social responsibility’”. However, we know in achieving a new quality of the economy, it is possible to enable people to grow in all their potential. A member of a cooperative must not be merely … a worker … but must instead always be a protagonist, and must grow, through the co-operative, as a person, socially and professionally, in responsibility … an enterprise managed by a cooperative must grow in a truly co-operative way, involving all”.

4. Co-operation can strengthen the link between work and family – including “helping women to fully achieve their vocation and to put their talents to use” through initiatives that meet the needs of all, from nurseries to domestic care.

5. Use money wisely. Pope Francis says “you must invest, and you must invest well. In Italy certainly, but not only, it is difficult to obtain public funding to compensate for the scarcity of resources. The solution I propose to you is this: unite with determination the right means for carrying out good works. Collaborate more with cooperative banks and businesses, organise resources to allow families to live with dignity and serenity, and pay fair salaries to your workers. … Money, placed at the service of life, can be managed in the right way by the co-operative, if however it is an authentic and true co-operative, where capital does not rule over people, but people over capital”.

Co-ops must “promote an economy of honesty, a healing economy in the treacherous sea of the global economy. A real economy promoted by people who have at heart and in their minds only the common good”.

“It is necessary to have the courage and imagination to build the right road to integrate development, justice and peace throughout the world”, he concluded.

These are inspiring words, hopeful words. Pope Francis is, in the words of Dame Pauline Green of the International Co-operative Alliance who has spent time with him and talked of his upbringing in Argentina, ‘the Co-op Pope’.

A Manchester Health Service… MHS or NHS?

At what scale are things best organised? That is at the heart of so many of our big debates today – Scottish independence, UK independence, devolution. 

And yet the debate rarely takes place with a deep look at scale and what should be done at different levels. That is not to say that there is not informed debate, even if some of that is rooted in an emotional sense of the desire to regain control in a complex world, and the perennial promises and illusions of nationalism and regionalism. But scale is something, ever since Leopold Kohr argued for the breakup of nations in the last century, that is hard to pin down.

Herman Daly, the great ecological economist, for example argues that economics has focused on the twin goals of distribution and efficiency, when it should also have focused on scale. Fritz Schumacher, the doyen of “Small is Beautiful” agreed. His argument was never that we should do everything at the local level, but that “we need freedom and order: the freedom of lots and lots of small units and the order of large-scale, possibly global, organisation.” He pointed in the 1970s to the catholic tradition of subsidiarity, or devolution as a working principle – as small as possible.

The world has moved his way. Every national politician seems to profess localism. Devolution has spread and won its spurs, changing for good the national settlement at the UK level.

The latest variant is Devo Manc. This is the proposal (albeit without the legislative basis of the nations within the UK) to devolve spending to the Greater Manchester authorities. It is recognition, on the one hand, of the centrifugal dominance of London as close to a city state, and, on the other, of the widely praised governance and leadership of Manchester.

By chance, I met with two dozen leaders in the health and social care system in Manchester on Tuesday evening, just as the rumours hit the wires of Devo Manc taking on health spending across the region, devolved from NHS England. I was just one participant in a room full of passion and expertise. One of the reasons I was there though was to talk to the potential for genuinely participatory approaches to health and care – not least the social co-operative model now emerging in Wales, which offers an ownership model fit for the concept of co-production, of a partnership between service users, carers, community and the precious teams of professionals.

None of Devo Manc (health and care) is going to happen quickly and it is right to prepare the ground and to think through very carefully what needs to be done at different scales. There are still very good reasons to have an NHS, possibly even a European Health Service, for example around negotiating with Big Pharma on product and price or around aspects of food regulation. Public health ought to be easier in a national system than in the fragmented landscape of providers in the US – we need to be careful not to lose that in a devolved system.

But the consensus from the evening was that here was an opportunity to get things right. A statement prepared for the Manchester Evening News by Martin Rathfelder of the Socialist Health Association later that evening captured the mood:

“Under the right conditions this can be an opportunity to ensure that our Manchester Health Service – MHS  – brings much greater benefits to patients and communities. 

MHS patients must be equal partners in decisions about their own care and of their families.  The MHS should be much more democratically accountable than the NHS has been in the past.  Manchester still has huge inequalities in health.  The average age at death of people living in the most deprived parts of the conurbation is ten years less than among those living in the most prosperous areas.  The NHS has never been able to tackle inequality on its own but the MHS will be the biggest employer in the region and with local councils must use its muscle to reduce inequality.  At the same time we want to see an end to wasteful and damaging competition between hospitals. 

MHS should bring much closer working  between social services, citizens, patients, carers, families, communities, hospitals, family doctors, pharmacists and other clinicians, researchers and the voluntary sector. and to establish real parity of esteem between mental and physical health.”

The key to success in devolution seems to me to be one that many co-ops would recognise – you do things together only those things that are done better together, and if you prove that you can do that, you can build the mandate and collective will to do astonishing things for the common good.

Rebooting democracy? The case for a citizens constitutional convention.

I was part of a messy Moral Maze programme on Radio 4 this evening. The focus was whether there was a duty to vote.

My sense is yes, in the simple sense that if you vote, you are entitled to feel good about it. You are getting involved. If there was no sense that voting was right to do, then there might be no voting and if no voting, then we will have no democracy.

It is like giving blood. It is a good thing to do and we are better off as a society if enough people give blood. But no one is going to put you in the stocks if you don’t do it. It is a civic duty, not a new addition to the Ten Commandments.

But to say that it is a civic duty doesn’t mean to say that the way to tackle the evident woes of today’s representative democracy is by framing it in moral terms.

Firstly, you can be active and engaged in political issues and choose not to vote. As one person said to me in the run up to the programme, is it a moral duty to vote if you believe the people you are voting for are immoral?!

Second, we oversell voting. The focus on voting as the sole way people can express their democratic will is not useful. That’s not to dismiss it’s importance, but to say that we need a much more rounded view of what democratic participation does/can entail. We need to be looking at what can be done to provide meaningful opportunities for people to participate.

That’s where Involve’s work, a democracy charity that I chair, has been for over ten years – exploring the extraordinarily rich portfolio of techniques that are possible for what we can call participative democracy.

That’s not to assume that everybody gets involved in every decision, or that we don’t need experts to be experts, but it is a way of getting better decisions and better buy-in because people are given a voice, given a choice.

The BBC panel assumed that this was all about town hall meetings and flip charts – and perhaps that’s the caricature – but as the cooperative sector knows, there is plenty of everyday democracy at work across the UK beyond voting in politicians to parliaments and assemblies.

The examples are now fairly well known.

– Open government means that decisions are taken in the public eye rather
than behind closed doors.

– Citizens juries are examples of deliberative voting. Time and effort goes into getting the facts straight and understood and then you canvas peoples views.

– Participative budgeting gives the public the power to decide where money is spent. In the UK, so far, at a neighbourhood level we have only had small change ‘participatory pocket money’.

– New technology makes it easier than ever for people to get involved.

NHS England operates a programme called NHS Citizen that Involve has helped to design, which is all about bringing the voice of the patient into the culture and leadership of the NHS. It is work in progress, but it is a much richer conception of democracy than voting once every five years for a party of political representatives to decide everything for you.

I was present at one session in which Board members of NHS England listened to patients with mental health troubles. When you are a Board member, you are responsible for culture and values of the system, but it is the paperwork and finance that dominates formal meetings. Participatory projects like this bring in the voice of the patient and is starting to change how things are run.

When people in Merseyside were asked by the police what mattered to them, it wasn’t that police got there fast, which is what the managers had always thought, it was that the police came when they said they would.

The treatment of breast cancer, the availability of language services have been improved by citizen campaigns.

By using imaginative ways to get people involved, five wards in Birmingham have cut crime at twice the rate of other areas in the city – saving money for the taxpayer.

Some of the BBC panel were looking for the single shots to reboot democracy – compulsory voting, votes for over sixteen year olds, state funding. (The transcript of my evidence, by the way, is here). All these are options, reasonable options to be argued through but if they don’t carry sufficient consensus, they are tinkering with the democratic mandate rather than renewing it. We have other issues that are flaws to address as well and that won’t wait forever:

– the West Lothian question of who votes on English matters

– the postcode democracy of devolution beyond the nations to the regions and cities, which implies profound changes not just for people in those areas but also those just outside them

– the case for our representatives to reflect better the people they represent in terms of gender and class

– whether we need a written constitution or whether we continue with our tacit and evolving settlement.

What we need, to look at all of this, is a citizen-led constitutional convention. Scotland had one back in the 1990s. Ireland and Iceland have experience, including crowd sourcing a possible new constitution.

How will this work? One option is to build on the citizens jury model, keeping politicians at bay. If so, it would be randomly selected but a representative sample of the population – similar to a jury, but on a bigger scale. The number of people could range from 100 to 1,000, or perhaps even 2,000 at the most. Over something like eighteen months, say, you would go through a design phase, and then, gathering expertise and evidence, a deliberation phase and then a recommendation phase – all with satellite grassroots discussions and debates feeding in.

The recommendations can go to Government, or on to a referendum. The constitutional convention is there to present a programme, but the decision to change the framework of democracy is one that has to be decided in an exemplary way, if it is to last.

My sense is that, with all due respect to the political class represented on the panel I met tonight, we need to rescue politics from the political experts.

Democracy is more than voting, and why should we not in future expect more opportunities to have a say on the decisions that affect us, easier participatory opportunities in the neighbourhood and, radically, more economic democracy in our workplaces?

Engage people in these ways, the evidence shows, and they are anyway more likely to vote.

Farmer co-ops – a new programme starting soon

The first co-operatives formed around food and it is a source of new co-operation today. Later this year, Co-operatives UK will be starting a new programme of support for agricultural co-ops.
There are around 222,000 farm holdings in the UK. As a nation, we eat around half of what we produce, and if crisis hit, we could produce much, but not all of what we would need to get by.
While three quarters of agricultural land is farmed by the larger operations, the vast majority of farm holdings are small or relatively modest in scale. The south of Great Britain tends to have fertile soils, amenable climate and topography, while the north has something of the opposite. Scotland may be beautiful, but 85% of it is, according to European Union classifications, ‘less favoured area’. The south is therefore majority crops, while the north is majority livestock. Agriculture has always been devolved.
Agricultural co-operatives are farmer-controlled businesses, which offer the opportunity for members to benefit from economies of scale, to share the cost of overheads and to improve their ability to negotiate and compete along the value chain. Agricultural co-ops can play an important role in purchasing and marketing, providing their members with specialist services to get the most from relationships with suppliers and customers.
The business areas typically covered by agricultural co-operatives in the UK include: milk marketing and processing; crop marketing; potato co-operatives; horticultural produce; livestock marketing; crop storage and primary processing; input supply; and machinery rings.
A strength of the model is that agricultural co-operatives can benefit from mutual taxation status. Here the co-op acts as an agent on behalf of its members. The co-operative can accumulate reserves and hold them without incurring the corporation tax liability that would be payable if it was a private company, or if its members were holding the reserves as individual businesses.
As with co-ops more widely, the key to long-term success is business strategy and leadership allied to high quality governance and member engagement.
As a first step, we are recruiting someone to work with our farmer coop members to develop our work to back Britain’s farmers. If you know of anyone with a passion for food and co-operation, do pass the word!