The West Midlands Forum for Growth? Well if I were you I wouldn’t start from here.

I attended the West Midlands Forum for Growth yesterday at Resorts World. It was the official conference of the West Midlands Combined Authority, and I was attending on one of two free tickets given to civil society bodies, as part of the group of civil society organisations aiming to have a voice in combined authority matters. Tickets in general cost somewhere in the low hundreds of pounds.

In Andy Street’s keynote address, he told us the WMCA would be judged on its performance on two issues: growth, and public services and the lives of citizens. He said that although we were performing well on the first, we were not delivering well on the second. He said that there was no purpose in economic growth[i] if does not deliver the improvements in the lives of citizens.

This was a really important and honest admission for our mayor to make, at the start of an event that harnessed one day’s worth of the thinking power of hundreds of people in positions of significant power and with years of experience. It should have been the start of a challenging and free-thinking discussion about how we would make sure this happened.

There was a general sense of positivity in the room – that the West Midlands authorities were now seriously collaborating and that the devolution deal, land use and investment policies being followed were going to lead to opportunities. I didn’t really share that sense: I was thinking about Andy’s statement and wanting to discuss how we could address this need and make the West Midlands’ agenda deliver prosperity that was shared fully across its people with public services that met their needs.

But that discussion did not happen. There was nothing really different or challenging. The solutions are to have the biggest site, the fastest train, the tallest building, the greatest growth – the illusory trickle down of machoeconomics.

What about exploring the inclusive prosperity potential to be gained from enabling small development on small sites, not just big development on big sites? What about increasing local ownership? Fostering local supply chains? Raising the lowest wages? A focus, as with our social care report with New Economics Foundation, on the ‘foundational economy’, of providing the things that we all need such as food, energy, care, education?

A discussion on ‘liveability’ towards the end covered many of the right things about wellbeing but didn’t really address how the growth agenda should achieve them. It was more as if liveability was something you did in order to create more growth, not something that growth needed to achieve.

Belatedly, I started to realise what this event was really for. The vast majority of attendance, alongside public sector people, were in roles relating to development: (architects, developers, project management). There was little input from voluntary sector or small business, let alone of course from active citizens. There was none of the cross-sector debate about how policy can make a real difference, as there was at regional conferences of the early noughties[ii]. I assume that all those present had an interest in being enthusiastic about the agenda in order to facilitate access to new developments in whatever capacity they were operating. While they might have cared about it, their role and expertise was not to help deliver policy, investment and practice that meet those public needs.

This, I guess, is fine. There probably SHOULD be an event (probably in a car-centric and unsustainable consumer-orientated venue[i], probably for a prohibitive fee) that brings such people together to create a positive buzz around the devolution agenda and to network about the business opportunities that will result.

But should that event be the official Combined Authority conference? Given the Combined Authority’s remit that Andy laid out, does its real conference need to bring in a wider range of perspectives, some experts in public services and local economics, in a vastly more participative format (I counted 4 questions from the audience in 6 hours) and perhaps not charge them £300 for doing so?

We’d be happy to support such a WMCA conference in 2018.

Karen Leach

[i] I cycled there and back. Alongside the asphyxiating fumes, the only way out as a cyclist was take the third exit off the M42/A45 roundabout in three lanes of motorway-hungry traffic. I am sure I lost one of my nine lives.

[i] Yes, we are aware of the the grim realities of the impacts of such growth on our future on a finite planet. Having gone many steps backward since the not-ideal era of Regional Development Agencies, we’re currently aeons from being able to debate this. Instead, we hope to enable policymakers to see that other objectives and measures are more critical, and that this will reduce the focus on, and eventually the impact of, such growth. We know that this won’t be in time to stop dangerous levels of climate change or the depletion of finite resources, but we have to start somewhere.

[ii] And no, I never thought I would be highlighting those as pinnacles of sustainability and social inclusion.

‘Local Liquidity: From Ineffective Demand to Community Currencies’

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molly scott cato 3Dr Molly Scott Cato opens her Green House paper, which may be downloaded here, by asking how our ongoing financial and economic crisis is to be understood and resolved.

The mainstream view is that we need economic growth – and austerity – because of the vast government deficit and stagnant economy.

Others say that we must invest and borrow more now in order to resume growth. Both sides are assuming ‘growthism’ as an unquestioned dogma.

She continues:

“The aim of the Green House Post-Growth project is to challenge the common-sense that assumes that it is ‘bad news’ when the economy doesn’t grow and to analyse what it is about the structure of our economic system that means growth must always be prioritised. We need to set out an attractive, attainable vision of what one country would look like, once we deliberately gave up growth-mania – and of how to get there. And we need to find ways of communicating this to people that make sense, and that motivate change”.

Attempts to restart economic growth have been unsuccessful; local economies are suffering from the large-scale withdrawal of liquidity that the public spending cuts represent. Local currencies across the world offer a different type of liquidity, “but one that has suffered from lack of credibility and from an absence of political support”.

Scott Cato recommends local authorities to generate truly ‘effective demand’ in their communities

This can be done by introducing local currencies into their fiscal administration on a staged basis, beginning with local services, as partial payment of local tax, and eventually for the payment of staff – note the voluntary example of the mayor of Bristol.

Her verdict on ‘queasing’:

“The government’s creation of money through its quantitative easing programme has only created ‘ineffective demand’ because it has been sucked into banking debts; by contrast money spent into the local economy as a local currency could help to revive local economies and build resilient communities and thus constitute genuinely effective demand”.

Community currencies exist in Brazil, USA, Argentina, Japan, Switzerland, Germany, France, Austria, the Netherlands and the UK

Across the world, community currencies exist in countries with widely contrasting economies and levels of wealth ‘as conventionally measured’. Citizens are taking control of the medium of exchange and issuing their own money in Brazil, USA, Argentina, Japan, Switzerland, Germany, France, the Netherlands and the UK. Scott Cato notes:

“Local currencies have provided a way for people to work and make a contribution to their local community even when conventional jobs paid in the national currency are not available. In this way many social needs have been met that would otherwise have been left unresolved”.

She looks at community currencies used in the past and those currently used in other countries. Two examples are summarised here:

“The Chiemgauer was launched in the Salzburg town of Chiemgau in 2003 and is accepted by around 150 shops and service providers including the optician and pizzeria. Chiemgauers to the value of €60,000 were spent in the first year of the scheme, which was started by a local economics teacher. To add credibility the currency is effectively backed one-for-one by euros, since the money is bought directly in exchange for the European currency, which is deposited in a local bank before Chiemgauers are issued. They can be exchanged back but for a 5% fee”.

The Chimegauer has an initial validity of three months, after which its value can only be extended by purchasing a stamp costing 2% of its value. Since it earns no interest there is no incentive to hoard or invest, meaning that the currency will instead be spent, increasing economic activity.

“The Chiemgauer is now very widely used. It has 600 shops participating in the scheme, 1800 consumer members and 200 charitable associations who receive donations every time the local currency is purchased. Around 430,000 Chiemgauers are in circulation, generating a transaction volume value of more than €4m”.

She notes that Japanese local currencies are also time limited:

“(They) tend to be designed as coupons which are received in return for voluntary work and can then be spent in local shops. They have a long history and are widespread. The first Japanese currencies were organised as ‘voluntary labour banks’ similar to time dollars. In 2001 these were joined by ‘eco-money’ designed by former MITI employee Toshiharu Kato.

A few points from Dr Scott Cato’s conclusion

“From a green perspective, the building of a sustainable society requires a transition towards a system of self-reliant local economies, where the majority of our needs are met from genuinely local production.

“Green economists see the lengthy supply chains of the global economy as wasteful of energy, as well as leaving us vulnerable in the face of rising fuel prices and more unpredictable weather resulting from climate change.

“Rather than increasing growth for the sake of it, local currencies can shift economic activity out of the globalised economy and into the local economies on which we will all come to rely.

“In a globalised economy local authorities often feel powerless to act to support the economies which support their citizenry, but they are not. Local authorities across the world have the power to support local currencies and enable them to underpin struggling local economies of both production and distribution”.

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A resource centre of papers on complementary currencies from around the world is available here: http://complementarycurrency.org/materials.php