An economics of localization

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A Bangalore conference in March was preceded by two screenings of a video describing a world moving simultaneously in two opposing directions:

“On the one hand, government and big business continue to promote globalization and the consolidation of corporate power.

“At the same time, people around the world are resisting those policies – and, far from the old institutions of power, they’re starting to forge a very different future. Communities are coming together to re-build more human scale, ecological economies based on a new paradigm – an economics of localization”.

By bringing together representatives from a broad range of grassroots initiatives from India and abroad, ISEC aimed to deepen the dialogue between North and South, and contribute to a broad people’s movement, in favor of developing localized sustainable alternatives to corporate globalization both in India and beyond.

Read more here.

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Regional government in the Midlands – a historical precedent

Fleetwood’s Ken Palmerton (co-founder of the Institute for Rational Economics) responds to the last post: “Why not the Midlands indeed! Mercia, under Earl Leofric and his tax cutting wife Godiva, was a viable entity, why not now?”

mercia mapA search revealed that the Midlands of England, Mercia, included much of south Derbyshire, Leicestershire, Nottinghamshire, Staffordshire and northern Warwickshire and Tamworth was the capital of Mercia.

The Electoral Commission could only dream of such a level of engagement

BBC political correspondent Justin Parkinson earlier wrote that this period is sometimes credited with a level of engagement in local politics that the Electoral Commission could only dream of; government originated in “moots” or meetings, where small communities thrashed out their differences. If this was not conclusive, disputes moved up to the shire court and, eventually, came up for discussion at “witans”, great councils involving the great and good, including the king.

 Coins and notes

mercian coinOffa was the king of prosperous Mercia from 757; coins bore his name and the name of the moneyer from whose mint the coins came. Some coins, issued under the authority of the Church, bore the names of the archbishop of Canterbury, Jaenberht, but after a dispute, Offa gave the coining rights to Eadberht, bishop of London.

jersey note2Ken remembers causing ‘a bit of a riot’ when he told people at a Green Party meeting in Plymouth that he was a Jerseyman and nonplussed at all their fuss. The island he hailed from had ALWAYS claimed its independence and the basis of that independence was their insistence upon creating and circulating their own currency – and, later, notes. What makes the islands different is that the States, the island’s Parliament, does not borrow, or rather has not done so historically – he adds that because the pressure the Islands have been under to “conform” to international practices has been intense.

Ken – and also Ben Dyson of Positive Money - points out that, nowadays, the creation and circulation of currency is ‘small change’; Ben adds that the governing entity should also issue electronic money and spend that directly into the economy.

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Dr Paul Salveson: directly-elected regional government

hannahmitchell foundation logoDr Paul Salveson, like LWM’s George Morran and Cllr. Phil Davis, campaigns for directly-elected regional government. He and others from the North met on November 11th in the station pub at Sowerby Bridge, near to the Lancashire/Yorkshire border, and agreed to form a Northern ‘think tank’ to develop the case for directly-elected regional government for the North of England – either as a whole or for the three regions which make up ‘the North’.

It has been named after Hannah Mitchell, an outstanding Northern socialist, feminist and co-operator. The Hannah Mitchell Foundation is not a ‘party’ organisation: members now include Labour, Greens, Lib Dems – and lots of non-aligned people, rooted in ethical socialist traditions of mutuality, co-operation, community and internationalism.

paul salveson

Dr Salveson, its General Secretary, is visiting professor at the University of Huddersfield, in the Department of Transport and Logistics. This involves some lecturing and developing projects such as the recent conference on HS2 The North on November 15th. He was awarded an MBE for services to the rail industry, originated and developed ‘community rail’ and was directly involved in the establishment of over twenty community-rail partnerships, leading to increased use of local and regional railways and additional investment.

The Hannah Mitchell Foundation campaigns for a devolved structure of governance for the North, based on the key principles of democracy and subsidiarity, social equity and justice, and sustainable development in its social, environmental and economic senses.

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Time to change: Professor Lang’s challenge: embrace local sourcing

tim langSusan Press in the Co-operative News reports a challenge issued by Professor Tim Lang, Head of City University London’s Centre for Food Policy, to the Co-operative Group. It is time to radically change the way food is delivered and distributed to the Group’s 4,800 retail outlets:

“At a time of growing interest in locally sourced food, he thinks there should be far more support for producers supplying direct to local stores. He says: “I think the co-op has lost its way a bit. Back in the 19th century, the first co-operators led the movement against the adulteration of our food and sourced local food which everyone could afford.

Unfortunately, the Co-operative Group has gone down the road of emulating the supply chain model of its major competitors with regional distribution centres and centralised supplies . . .

“But our food supply is being more and more standardised by very big and powerful companies. There are more local artisan and special interest foods, so we have come a long way, but small producers are held back by lack of access to land, ownership of which is dominated by large landowners.”

One of Professor Lang’s current concerns is the growing concern around food security – the availability of food and access to it

He points out that worldwide, figures show around two billion people are going hungry and for the first time in decades the number of food banks in the UK has tripled in the last 12 months.

Lang says: “For the first time since 1945 we are living at a time of rapidly rising inequality, with around five million people living in poverty according to the recent report from the Social Mobility and Child Poverty Commission”. He looked at the history of the co-operative movement:

“In 1994, the Group set up the Responsible Retailing Code, building fair and sustainable relationships with suppliers across its whole supply chain across the world, also leading the way on Fairtrade. It was pioneering stuff, but we need to be building upon that knowledge and working for more sustainable food thinking concerned with the future of biodiversity and our eco-systems . . .

“Like the other major retailers, the Co-operative Group goes for cheap meat reared on cereals. Around 40 to 50 per cent of our cereals are fed to animals. We need more grass-fed meat and dairy and we all need to eat less meat and double consumption of fruit and vegetables because we are storing up huge problems for the future  . . .

“We don’t need supermarkets offering 35,000 lines or people working hard to earn enough money to buy a car so they can drive to the local hypermarket. We need to look at what things will be like in 2050; the effects of climate change and the billions more people there will be on the planet. We need to establish a good food culture which is also good for the environment.

“Stores have to have better access to local food with a shorter supply chain and we have got to re-design the whole food system because frankly it is environmentally crazy.”

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Read the whole article here: http://www.thenews.coop/article/time-change-food-professor-issues-challenge-embrace-local-sourcing

 

Professor Lang was the first to coin the term ‘food miles’ – in the 1990s – to describe the distance groceries have to travel to reach us. He was invited to set up the London Food Commission in the 1980s with the Greater London Council, which did some of the earliest work on the effect of food poverty. He pointed out the damage done to school and hospital meal services by government policy, making a major contribution to the Food Safety Act (1990) and the creation of the Food Standards Agency (2000). He has been a consultant to the World Health Organisation, a special advisor to four House of Commons select committee inquiries on food standards globalisation and obesity and was on the Council of Food Policy Advisors to DEFRA.

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In the best farmers’ markets provenance is closely scrutinised

gerb gerbrandsGerb Gerbrands, who founded the flourishing farmers’ market with Clare Honeyfield (Made In Stroud shop) in 1999, wrote in the Stroud News and Journal about the difference between farmers’ market stallholders and those at ‘ordinary’ markets.

He receives applications from potential stall-holders a who are asked to fill in a form which states: “If products are made with bought-in ingredients, those ingredients must be from a local producer ‘wherever possible’ “. Gerbrands explains: This is to:

  • guarantee traceability,
  • reduce food miles
  • and bolster the local economy

stroud farmers marketAn application to sell meat pies was preceded by an email stating that their meat was bought as locally as possible and with full traceability – from Towers Thompson.

He searched on this name and saw that TT is an international meat and dairy group based in Avonmouth; all their other ingredients came from BAKO – whose lorries, Gerbrands points out, hurtle up and down the motorway supplying catering businesses around the country.

He ends: “Needless to say this application was turned down.

“To sell a product like pies at the market a business has to use butter produced locally, flour milled locally, vegetables grown locally and meat reared locally”.

 

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But even in Stroud, where local food procurement works so well, it can be threatened by the political hierarchy and market dogma – see Stroud District Council: serving or dictating?

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By request, contact details added:

Cllr. John Marjoram, jmgreenstroud@gmail.com

Sue Smith, editor, Stroud News and Journal, sue.smith@gwent-wales.co.uk

 

 

Three vital advantages of municipal utilities

bob massie president new economics instituteBob Massie of America’s New Economics Institute sent news today that voters in Boulder, Colorado, have ended their relationship with Xcel Energy, a utility with $10.7 billion in revenues, clearing the way for the city to form its own municipal utility that would lower rates and make greater use of renewable energy.

The city’s ‘multiple pleas’ for more clean wind and solar power had been turned down by Xcel which then financed a new coal power plant.

boulder cycle demo

During a vigorous campaign that attracted national attention, corporate executives and their allies mounted a well-funded operation, arguing that the city had neither the money nor the expertise to manage such a complex enterprise.

boulder graphicAdvocates for the municipal utility, including the New Era Colorado Foundation, fought back with a successful crowd-funding campaign, attracting public attention with imaginative activities.

There are 1000 municipal utilities in the United States, serving 50 million customers. Most  are owned by cities, and controlled by panels of local citizens. Some are cooperatives owned by their members.

boulder john farrellJohn Farrell, who directs the Energy Self-Reliant States and Communities program at the Institute for Local Self-Reliance, points out that if the city moves ahead, it would capture nearly $100 million currently spent on electricity imports and create up to $350 million in local economic development by dramatically increasing local clean energy production.

Proponents of change have argued that public control creates three vital benefits:

  • First, decisions are made not by distant corporate managers whose first priority is to generate returns for absentee shareholders or to pay enormous salaries for executives, but by managers who are accountable to the community.
  • Second, because of this, municipal utilities can focus on important local goals, such as investing in renewable energy, efficiency, and other factors that increase community resilience.
  • And finally, the rates of municipal utilities are traditionally lower than their counterparts, and they channel any financial surplus — also known as profit — back into the community.

 boulder poster

Massie comments: “The entire model of a corporate utility operating a centralized grid is facing steady erosion. Universities and cities across the country are expressing their desire to move away from both hiring — or even owning stocks — in companies that remain committed to fossil fuels. In addition, every family who installs solar on their roof not only slashes their need for energy from a utility, but also cuts the revenue for those same firms.”

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Reviving a genuinely local entrepreneurial culture

david boyle2Innovative thinkers often have to wait ten to twenty years before their concepts become mainstream. Two years ago David Boyle (New Economics Foundation) listed ten linked propositions, many borrowed from the most successful cities in Europe and North and South America, which could effectively allow cities to take back control of their economic destiny.

Agreeing with the City Growth Commission that a new economic agenda is emerging in these successful cities (and setting aside the issue of the desirability of growth) these propositions offer a more interesting and convincing contribution to the Core Cities debate, than Jim O’Neill’s four points:

Boyle’s ten linked propositions offer an outline agenda – a composite drawn from these urban centres:

  1. Rebuild local economies by plugging the leaks that are draining local money away. How money circulates in an area is just as important as the amount of money flowing into it. Traditional economics suggests that cities must specialise. That may be true for the largest businesses, but it is irrelevant for local business. For them, the best way forward is not just by specialising, but also by building diversity and looking for ways of replacing imports.
  1. Develop local diversity and distinctiveness. Too many of our cities have devoted their imagination and resources to making themselves look the same as each other. But because economic diversity keeps money circulating locally, it is critical that any new developments design well-being, distinctiveness and sustainability indicators into Master Planning processes and that any new retail effort must make high streets more, not less, diverse.
  1. Bust local monopolies to let enterprise flourish. One major reason why so many of our local economies have been hollowed out is that so many cities have been using net wealth destroyers as anchor stores.
  1. Organise enterprise coaching, support and advice in every neighbourhood. Coaches, backed up by a panel of local business people, bank managers and other local volunteers, can help to break down the barriers preventing enterprise from starting, replicating the kind of social networks that successful places have.
  1. Use local resources to build an effective new local lending infrastructure. Our businesses are now in a far weaker position than American or German competitors, and potential competitors, because we have no equivalent lending infrastructure. The real problem is not lack of capital to lend, it’s a serious lack of institutions capable of lending it.
  1. Invest in local energy. At present only 0.01 per cent of electricity in England is generated by local authority-owned renewables, despite the scope that exists to install projects on their land and buildings. In Germany the equivalent figure is 100 times higher.
  1. Use waste products as raw material for new enterprises. Traditional economics confines its interest to the point where money becomes involved and to the point when a product is thrown away. Cities are often blind to the potential value of what is wasted and thrown away – because all these have potential for enterprise.
  1. Use public sector spending to maximise local money flows. Making sure that public sector contracts build the local economy, and provide permanent economic assets for depressed areas.
  1. Launch a range of new kinds of money. Successful models are now running all over the world, keeping local resources circulating locally and providing independence for impoverished communities. They can provide low-cost or free credit, and – in some countries – they underpin whole sectors of the economy.
  1. Experimenting with new kinds of credit creation for local public benefit. There will be occasions when regional economies require the creation of new public money, free of interest, where necessary to cope with unprecedented financial emergencies, and as the basis for loans to rebuild the infrastructure of productive local economies.

Boyle notes that not all of these ideas could be organised without central government support, but that the rest could be done by imaginative and forward-looking city leaders, grasping the new powers of general competence made available in the Localism Bill.

 

Read the full article here.

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Farmers’ markets in India, Poland, England and America

 

farmers market 2 krakow. jpeg.

Julian Rose sends a link to a video about a new farmers’ market set up in Krakow: http://www.youtube.com/watch?v=rEd_FnoD6kU&feature=youtu.be. When questioned about the web’s reference to many farmers’ markets of long-standing in the city, Julian explained:

“Most of these markets are not authentic ‘local’ suppliers and are also often fronted by middle men. Probably around half the sellers can’t (or won’t) tell one where their produce came from. In many instances it is shipped in from surrounding countries that have surpluses – and is sold very cheap.

Shortening the supply chain

”So this market in the film is an initiative of Krakow local authorities to highlight those farmers/growers/processors who operate close to the city and who sell good quality and fresh produce. We support this initiative – and take the view that there are still far too many heading out to the supermarkets – with the consequential loss of local markets. A familiar story . . .”

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“It is clear that organized retail is not the answer to food mismanagement“

onion trader medium cartoonIn the Deccan Times, analyst Devinder Sharma records that in August, hoarding and speculation in India led to middlemen making huge profits from creating an artificial scarcity. Prices rocketed. The organized Indian retail chains were supposed to remove the array of middlemen and provide vegetables and fruits much cheaper to the consumers, but their prices had remained almost at the same level as the open market.  He writes:

“But there is a renaissance in food delivery, quality of produce and economics that I find is slowly but steadily taking root. From Australia to United States, from Japan to Argentina, local food systems are changing. Enhancing the livelihoods of local producers, and meeting the consumers’ aspiration, food markets are now becoming popular . . .

“Farmers Markets provide farmers and consumers with a suitable environment to interact, and that enables farmers to meet the specific needs of the consumers. They enable greater consumption of fresh and healthy fruits and vegetables, and reduce the carbon footprint. Since consumers are now increasingly aware of the damage chemical pesticides and fertilizers do to health and immune systems, demand for organic food is growing by approximately 20% every year. Moreover, since farmers come and sell directly to consumers on a regular basis, farmer’ markets eliminate middlemen and provide stable prices”.

More commission agents are now operating in India’s traditional markets and Sharma calls for a mechanism to be evolved that makes farmers’ markets only accessible for genuine farmers. He suggests encouraging them to form cooperatives for marketing purposes – each cooperative to participate in farmers’ markets, leaving farmers to undertake other farming operations.

Problems of authenticity also surfaced in Britain and America

national farmers markets association logoHeathfield News reports from Sussex: “Unfortunately soaring popularity has spawned a new problem – bogus markets that claim to offer food from local farmers promoting locally-grown produce – but are in truth shops and businesses selling goods from widespread sources.

“Now the Farmers’ Markets are fighting back with a series of measures aimed at protecting the original ethos of local growers selling their produce direct to the customer. America’s National Association of Farmers’ Markets has launched the world’s first accreditation system for Farmers’ Markets”.

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Energy security, using devices manufactured in this country

prof john a mathews 2Professor John A. Mathews’ areas of expertise include semiconductors, flat panel displays and new energy industries, solar photovoltaics and LEDs.

He wrote in the Financial Times:

“A quite different version of “energy security” involves reliance on the power generated by renewable devices – wind turbines, solar cells – that are manufactured in the country itself.

“What you make is yours, forever.

“Provided a country has abundant resources of renewable energy – wind, water, sunshine –  making itself independent in power needs by manufacturing its energy systems is the best guarantee of long-term (as well as medium-term) security.

“By contrast, continuing dependence on fossil fuels (even alternatives such as shale oil or gas) locks a country in to eventual diminishing returns.

“Adopting the alternative “security through manufacturing” approach has the convenient aspect that it would help to revive manufacturing centres . . .

“And it has the added convenient feature that it reduces the country’s carbon emissions”.

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Professor Mathews currently holds the Eni Chair of Competitive Dynamics and Global Strategy at LUISS Guido Carli University, in Rome, and Chair of Strategy, Macquarie Graduate School of Management, Macquarie University, in Sydney.

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Should we learn from countries whose companies own our energy providers?

Celia Richardson, director of the Social Economy Alliance, is the lead signatory of a letter in the Financial Times.

 social economy alliance logo

The Alliance was launched by Social Enterprise UK, a coalition of leading social economy organisations, in order to influence the way political parties formulate social and economic policies before the next General Election and increase the impact of the social economy.

ResPublica 9.13 report coverWelcoming Ed Miliband’s focus on energy, she referred to the growing community energy industry in this country where neighbours are collaborating, creating jobs and ‘growing their social capital’.

The latest publication from ResPublica suggests that community energy could grow to eighty-nine times its current size if existing barriers were lowered. The letter continues:

‘Other countries, whose companies own our energy providers, are developing their own community energy and renewables at a fast pace, while the UK suffers – we could learn from their domestic policy.

 

‘Energy is where Britain can tackle serious economic problems at the same time as tackling social problems, as well as our large and growing democratic deficit’.

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NOTE

Social enterprises are businesses that trade in order to address social problems, improve communities, people’s life chances, or the environment.  They sell goods and services in the open market, but reinvest their profits back into the business or the local community.

And so when they profit, society profits.

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