Archive for the ‘Co-operatives’ Category
Book Review: What Would Nature Do? by Ruth DeFries
Filed under: Book reviews, Business, Co-operatives, Covid-19, Environment | Tags: Kern River Oil Field, Ruth DeFreis
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This book essentially says, if humanity had paid more attention to how nature deals with the uncertainties of life on Earth, then we might have avoided some of its calamities – for want of a better word. Of course, there are two so-called calamities afflicting humanity at the moment; namely, a global pandemic and climate change.
One can often tell the whether the author truly has something to say in the final chapter. Can the content be summarised and rendered coherent? Does it hang together? In this case, I am not entirely sure. In fact, the author herself admits it:
In a fit of writer’s block for this final chapter, I ventured downtown to the New York Public Library to see for myself the tiny Hunt-Lenox globe with medieval-style etchings of dragons and strange sea creatures…etched pictures of dragons and monsters signalled seas and lands not yet seen by European eyes, although other peoples had lived in those lands for eons.
(p151)
The dragons, of course, represent all of the things that humanity has not yet discovered. But in getting to where humanity sits currently, the global commons have been well-and-truly “over-grazed” and pathogens serially mis-managed, despite the lessons of history, let alone nature. I’ll return to the calamity shortly, but DeFreis does discuss what humans have learned, though probably inadvertently.
Ancient trees had arteries and veins in their leaves that if severed by a pest – or just something that ate them – the effect on the overall plant would be significant in a detrimental way. The ancient tree is the Gingko, which eventually evolved a toxin to put off insects. But other plants and trees evolved alternative approaches such as “loopy veins”. In the event of part of the leaf succumbing to insect lunch, the sugars created in the leaves could still be delivered to the rest of the tree because they could be re-routed. The most obvious human-created analogy of this is the internet’s packet system whereby the data generated by this blog are put into small packages and sent on their way, often taking different routes and then reconstituted in the reader’s computer and browser. However, much of the human world is hub-and-spoke; i.e. centralised. When things go wrong, bottlenecks occur and all things – commodities, manufacturing components, finished products, foodstuffs – get jammed. In the case of food, hunger ensues.
DeFreis (right) writes extensively about pathogens and viruses in the human and animal world. In the human world, in the absence of politicians, viruses have been dealt with and eradicated by science on the one hand, and (disease) management on the other. Management here is track-and-trace as well as equitable global distribution of vaccines and other technologies. As with Covid-19, no one is safe until everyone is safe. However, we can learn from ants, bees and termites. Ants, famous for living cheek-by-jowl, secrete disinfectant into their nests collected from wood resin. Termites spread their own faeces in their nest benefitting from antimicrobial properties (that seems counter-intuitive). Bees can kill pathogens by flapping their wings! And so on. Ultimately, though, highly social creatures can isolate their kin should they succumb to disease. Primarily, this is to protect the queen and not for the benefit of the sick individuals.
Moving on from viruses and disease, DeFreis talks about the commons – the atmosphere, the seas, water and land. I had not previously been aware of Garrett Hardin, a man who believed that the solution to the commons was to de-commonise them, enclose them and “protect” them from over-exploitation. DeFreis counters his work with a celebration of the studies of Elinor Ostrom who demonstrated that human beings can adequately manage and protect the commons. They do not need permission by a central authority. However, one size does not fit all; what works in one place, does not in others. This is, of course, part of the problem. People have to be given the space and time to work things out, set quotas and agree sanctions for those who either free-ride or break the rules.
Talking about breaking the rules, I had equally not previously been aware of the Biosphere experiment in Oracle, Arizona, back in 1991. Three men and three women entered a CELSS – closed ecosystem life support system – and stayed there for two years testing whether it was possible to replicate the Earth’s life support systems (with a view to building one on the Moon or a planet). It was funded by a Texan billionaire, Edward P Bass, the Elon Musk or his time, perhaps. It took 11 years to build. Nothing that was not already in the CELSS when they entered would be added. It was not plain sailing – crops were blighted by pests and the air became thin as the plants generated carbon dioxide and oxygen mysteriously disappeared.
And so back to what nature would do. Nature is parsimonious. The limiting factor is always energy. All energy is derived from the sun. First in plants, then animals and humans. Most animals conserve as much energy as they can. Certainly through a winter, food can be in short supply. However, nature also builds in redundancy. Those loopy leaves use more energy to build, but when under attack, they are a life saver. Some humans have adopted this principle in their products. Most aeroplanes have redundancy – if one part fails, another kicks in. Apollo 11 would not have made it to the moon had it not been for Margaret Hamilton’s redundant computer code! But our economy is parsimonious – global supply chains do not react well to disruption, something that is increasingly occurring.
Our economy is different in another way, too. It is extractive. Its whole rationale is perpetual growth. Its metrics – productivity, GDP – are just wrong. They perpetuate the extraction and ignore wellbeing. Moreover, instead of generating energy sustainably – from the sun as plants do – we draw on stored reserves of energy in fossil fuels. Growth is only possible by doing that. Nature does not do that. Nature is not capitalist. It does manage its commons – or it did until homo sapiens disrupted the equilibrium. DeFreis does not engage with this. The reality of an economic system that destroys not only itself by undermining the life-support systems of the planet is glossed over. There is no system change needed, only a closer attention to what nature would do.
I can see why this is not tackled. Authors who do end up being criticised like Andreas Malm was on publication of his book, Corona, Climate, Chronic Emergency. It is not pretty. But neither is climate change.
Pictures:
Ruth DeFreis: By One Earth Future – https://www.youtube.com/watch?v=kiU0AlDsiPgPeace in the 21st Century: Ruth DeFries, CC BY 3.0, https://commons.wikimedia.org/w/index.php?curid=96380874
Pumpjacks in Kern ROF, California: By Antandrus at English Wikipedia, CC BY-SA 3.0, https://commons.wikimedia.org/w/index.php?curid=16373401
Book Review: Banking on it by Anne Boden
Filed under: Book reviews, Business, Co-operatives, Environment, Finance and Economics | Tags: Anne Boden, Starling Bank
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Anne Boden, a 50-something female banker with a long career at RBS decides to leave. She gets headhunted to work at the failed Allied Irish Bank (one of the major casualties of the financial crisis in 2008). Whilst she is terribly excited about the innovations in technology deployment at the bank, as chief operating officer, actually, her day job was making people redundant. She left after 18 months.
Boden comes across as someone who doesn’t sit still for long. She mused over her future and decided to set up her own retail bank. Only this one would not have any legacy systems, branches, and crucially, it would not have an IT department. It would be an IT department. The bank would be, as the book cover suggests, an industry disruptor – a business that would strip down products to the basics. No frills. And what it did do, it would do better than any other retail bank. It would interface with customers through a mobile phone app. The core product would be the notoriously unprofitable current account; rendered profitable by a low cost base and intelligent rates for borrowing and saving.
There is much to recommend in this book. We know the ending – Starling Bank was launched and is on the cusp of profitability. It is award winning – though I am never really sure what that means. And as we might expect, the journey to this point has been fraught, involved near bankrupting herself, two unexplained burglaries and a big fall out with the core team about strategy. As a 50-something bloke, the idea of a 50-something becoming a successful entrepreneur is inspiring. I am myself embarking on ventures that perhaps should have been done a number of years ago. But there you go. What this story tells us that there is never a wrong time, but don’t expect to have a life if you try. And if one is going to set up a bank, expect to have to do a deal with the Devil (more of this later).
Here are a few things of note for budding entrepreneurs:
- Silicon Valley’s investors may not be receptive to non-Silicon Valley start-ups;
- contingency fees from consultancies and lawyers may not be honoured by investors;
- even if one thinks that the idea is original, it is not. Someone else is working on it simultaneously and they may be competing for finance with you;
- scalability will be important – can the business be expanded/grow without adding costs? (p33);
- build a network full of goodwill (being 50-something can help, providing one has not hacked people down on the way up in a previous life) – (p63)
- if the business is a disruptor, the incumbents will not sit back and watch (p66); but in mature industries – like banking – they might not know how to respond (p251-2);
- watch out for a coup attempt – those brought in to develop the business may see themselves as better able to build the business and launch. The leader of the coup will require the rest of the team to choose between you and them (pp125-6);
- the media will pounce on stories about a coup/disagreements. PR needs management;
- failure is normal for entrepreneurs. Investors value experience. In Silicon Valley, recording failure is part of the culture. The place where this is done is medium.com (p138);
- it is possible to lose a whole team, be close to ruin, but start again and learn from the mistakes – primarily, getting the right people. The signs are there if one cares to look;
- it is staggering how much can be done just using email;
- so-called Real Options are revealed sooner than expected, but must be embraced. Setting up the businesses is only the start;
- the team that launched the product is not necessarily the team to see it in to the future;
- potential stakeholders/investors are watching – keep an eye on the email. Unfamiliar names may not be all bad.
Talking of bad. The bank got approval from the UK banking regulator to trade. I’m not quite sure how this works, but it does involve a lot of meetings, paperwork, disappointment and finance. It may not matter where the finance comes from. In Starling Bank’s case, Boden got an email from a mysterious investor, Harald McPike. Austrian, apparently. The eventual deal was done in the Bahamas on board a 92 metre yacht. £48m was pledged in exchange for 2/3 of the equity. So, essentially, Starling Bank is owned by a secretive financier based in the Bahamas.
That led me to a wider question about motives. Boden sees her core customers as younger types who live largely from their mobile phones. I get that. But why did the bank need to ape existing ownership models; namely venture capital based in the Bahamas? In these post-financial-crisis days, surely more of the same, albeit on a mobile, is falling short of truly disrupting? Why not a co-operative or other mutual model? Democratise banking and roll back the bank-as-an-end-in-itself principle.
There is absolutely no sense that Boden (left) might have had any reservations about the source of her capital, and that the profits would be offshored. It is not only McPike, she also sounded out Jared Kushner’s brother, Josh, in New York and John Thain famous seemingly for spending $141k on rugs for his office whilst he was at Merrill Lynch.
And what about ethical standards? The only mention of ethics was in a discussion as to whether it was ok to buy a competitor’s domain name (p197)! The website does have an ethics statement which explicitly excludes certain business customers such as arms traders. There is a commitment to planting trees, some reference to energy and supply chains. Nothing, though, that says, “this is the bank for me”.
Pic: Anne Boden, Charlottelorimer
Book review: Stephanie Kelton, the Deficit Myth
Filed under: Book reviews, Business, Co-operatives, Environment, Finance and Economics, Politics, Reviews | Tags: Stephanie Kelton
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Without my reliable book seller, I would probably not have read this book. It arrived one day through my Covid-barrier letterbox. Once I had started reading, it completely changed my way of thinking and boosted my mood amidst the gloom that is modern politics and economics. Kelton demonstrates that, contrary to the British Prime Minister’s assertion, there actually is a magic money tree. I am going to resort to bullet points here. Here’s what Kelton tells us:
- we do not pay tax to pay for services, we pay tax to “provision” the economy
- governments do not tax and spend, they spend and tax
- governments’ budgets do not work like household budgets
- countries that have currency sovereignty (i.e. “issue” their own currency), cannot run out of money
- the role of fiscal policy is to manage inflation, not the deficit.
- austerity is both unnecessary and damaging economically and socially
- deficits are a sign of a healthy economy – economies that are balanced are not innovative
- a negative balance of payments does not mean that foreign powers have power over countries whose currencies they keep
- currency “holders” convert their cash into interest-bearing bonds
- countries with currency sovereignty can, and should, have full employment
- the resources are there for countries with currency sovereignty to transform to carbon-zero economies.
That is almost enough for one book. There are plenty of reviews of this book for my readers can draw on, for example, Despan, 2020. As ever, there is no substitute for reading the book oneself. But let me take just a few of these bullet points and metabolise them.
Take Covid-19, the British Government has found £30bn to fund the furlough/job retention scheme to enable employers to retain staff when revenues are hard to generate. The Government found money to build emergency hospitals; purchase PPE (albeit inefficiently); and even pay us to eat out. The government has not disclosed how these initiatives will be paid for. The Conservative Government has spent millions of pounds on Brexit, most notoriously a £13.8m contract to a ferry firm without ferries. Oh, and those expensive nuclear weapons. Essentially, the Treasury is paying by creating money. Though by contrast, it would seem that Government spending on welfare payments to poorer people, on education, social care, etc., have to be justified and balanced by tax revenue.
Tax, more generally, is not as it seems. Kelton makes the argument that the reason that we pay tax is not to fund spending, but rather for provisioning. Governments need people to be economically active, to make things, to provide services, for progress. Tax, therefore, is the incentive for people to be economically active by ensuring that people have to give their labour and time in exchange for currency (money). There is a secondary purpose to tax, that of wealth redistribution. The obscene wealth concentration in the hands of a few known-individuals – Jeff Bezos, Bill Gates, Warren Buffet, Elon Musk, Peter Thiel – does not serve society at all. The rich who get more money tend to save it rather than spend it. Give poor people money and they will spend it in the real economy. Take a $1bn off Jeff Bezos in tax and he is left with $109bn. Would he really notice? Plus, how much has Bezos increased his wealth during the pandemic which has necessitated large-scale public spending commitments? What can civil society do with $1bn? Rather a lot, I think.
People will argue – particularly in the USA – that rich people are serious philanthropists. Bill Gates’ foundation gives billions to the fight against malaria. Warren Buffet has endorsed Gates and will donate his fortune to Gates’ foundation upon his death. There are two problems – at least – with that argument. Many billionaires have become so rich by exploiting workers, communities and natural resources. Suddenly to give excess money “away” to causes that they decide are worthy seems wrong. They distribute excess money (they do not become St Francis of Asissi). They live well and maintain their political influence. And who is to say the causes selected by philanthropists are worthy and the most efficacious? Where is the transparency, the democracy, the accountability?
Back to Kelton’s main arguments, government deficits are, by definition, surpluses or credits to others. I buy something (debit) and give money to someone else (credit) in return for something that I actually want. But unlike governments, my debit does have to be covered either by savings or borrowing. Governments only get into trouble when they borrow in currencies that are not their own. Cases such as Argentina are often floated as examples of how deficits are bad. Notwithstanding the fact that Argentina’s 2001 inflation-led crisis caused a default on foreign debt, it did reconfigure its economy to one that focused on domestic growth and full employment. Its government moved away from US dollars both in cash terms and also uncoupling interest rates to a foreign currency.
Inflation, unemployment and climate change
Inflation is a problem for economies. In my lifetime I have seen high inflation; though nothing compared to the hyper-inflation suffered by Germany in the 1930s which still scars the landscape and leads to economic conservativism within the country and forces austerity on countries such as Greece that share the currency (the Euro). Inflation is usually controlled by notionally-independent central banks. They increase interest rates to dampen down demand. 2 per cent inflation seems to be a common target in modern economies. Overshoot and the central bank will raise interest rates. That will also impact on the unemployment rate – but modern economy managers trade off inflation and employment. Higher unemployment is a price worth paying for keeping down inflation, unless you are, of course, someone being made unemployed. This trade-off can be seen at work in a recent article by Gordon Brown, UK PM during the financial crisis of 2008. In response to the Covid-19 crisis, he writes: “Now I am the first to say that the Bank needs a more demanding constitution, one that imposes a dual mandate: to take unemployment as seriously as inflation. This should be matched by an operational target stating that interest rates will not rise or stimulus end until unemployment falls to pre-crisis levels.” (Guardian, 15 September 2020).
Kelton argues convincingly that countries with sovereign currencies can run their economies with a “good jobs guarantee”. Monetary policy has it that there is a natural level of unemployment – NAIRU. The Economist Martin Goodfried puts a figure on it: 7 per cent! In the USA, that might be as many as 12 million Americans “naturally” without work and a whole lot more who are under-employed. To keep that number of people unemployed is not some law of economics (there are no laws of real economics), it is purely a political decision predicated on a non-existent law of rising wages caused by too much employment and hence bargaining power of labour leading to inflation. When wages rise, interest rates should increase to prevent inflation from occurring.
Mainstream economics has it that unemployment benefit is sufficient to provide for the needs of people without work. Critically for the neo-liberal economists, the rate needs to be set sufficiently low so as to provide the incentive for the unemployed to take any paid work rather than be idle. The gig economy is, arguably, the result of this mentality; that is insecure and sporadic work. However, this argument is pretty phoney – most people are motivated by a sense of purpose, much of which comes from engaging in meaningful work. But the rich – for example, those who earn six-figure sums – do not work harder the more they receive in salary and bonuses. They merely accumulate believing themselves to be worth the money they are paid. Moreover, they bias the policy of their firms in order to maximise the benefits they receive. For example, if remuneration is linked to share price, CEOs may engage in share buy-backs rather than invest in innovation and new products.
Kelton identifies seven deficits that do matter. These are: employment, infrastructure, education, climate, democracy, health and savings. Let me take a couple of those deficits, starting with employment. Kelton argues that progressive governments would use the state apparatus to employ all unemployed labour on a wage that sustains individuals and families until full employment returns in the natural economic and business cycles. A good job guarantee (the good is important here) can maintain aggregate demand even in a downturn because everyone who wants to work can do so. This potentially makes the downturn of shorter duration. All citizens would be covered (not everyone is eligible for unemployment benefits either because they have not paid-in to the insurance system, or they have exhausted their “entitlement”) and purposeful work is at the heart of such a programme. Moreover, skills are retained and/or enhanced. Kelton argues further that these public works should be based in communities and the work itself should focus on developing communities – whether it be public service, caring (for elderly and children alike) or business development/entrepreneurship. It is also clear that such a job-guarantee programme could be beneficial as societies pursue environmental sustainability. It is also feasible for people to change their own direction from accumulation to sharing and “de-growth”.
That leads to the second deficit that matters, climate change. Kelton rehearses many of the arguments made by key writers in this field such as Mike Berners-Lee, David Wallace-Wells, Tim Lang, Bruno Latour, etc. If governments persist with a neo-liberal, deficit-avoidance economic mindset, then climate change will impact human society at the upper, catastrophic-end of the climate-modelled scenarios. There is no financial block on investment in green technologies. It is political. Sovereign currency issuers such as the USA and the UK can generate the financial resources needed to eliminate carbon as the source of all energy and limit warming to below 2 degrees Celsius.
In conclusion, Kelton is a credible critic of existing monetary policy. She demonstrates how we can as a society have the things we need. Society has never been provided for by taxation. It has always been spend and tax, not tax and spend. Tax does not provide the resources for public spending, it is primarily a tool of redistribution. Some rich people are not keen on that, for some reason.
Updated, 15 September 2020 to incorporate quote by Gordon Brown
I work in a Business School: Shut down the Business School
Filed under: Book reviews, Co-operatives, education, The Academy | Tags: Business Schools
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Martin Parker (left) tells us in his new book, Shut Down the Business School (below right), what we already know. We know that Business Schools are – to use that always unhelpful metaphor – cash cows – for universities the world over. They are a volume business in themselves. They also sell a product – the dream or aspiration of riches with the right formula learned at the Business School.
That definition of riches – or personal wealth – is a capitalist-managerialist one. It is one in which (let me turn this into a powerpoint presentation):
- bosses boss and everyone else does as they are told;
- bosses – managers – are worth more than the people who work for them (defined in salary and benefits/perks)
- managers’ decisions are right (until they are not);
- meeting or exceeding shareholder expectations is the purpose of firms;
Business Schools are multi-disciplinary – that is definitely a plus – and the aggregate business discipline is a social science. The disciplines, for Parker, are (pp 26-34):
- Finance (always assuming that earning rent on capital is a legitimate and perhaps even praiseworthy activity, with skillful investors being lionized for their technical skills and success);
- HRM (not particularly interested in what is like to be a human being);
- Management information systems (premised on the sensible assumption that high-quality, relevant and timely information is necessary to make high-quality relevant and timely decisions, but agnostic about direction or context of the made decisions);
- Operations management (aimed at shrinking time and space, and when successful destroys the local);
- Accountancy (the production of different versions of the truth for different purposes);
- Marketing (predicated on maximising the number and value of transactions within a given organisation, market or economy, promoting hyper-consumption);
- Strategy (an attempt to predict the future and shape an organization in such a way that it profits most from what that future looks like).
Economists are spared character assassination, MBAs (the award and the award holders) are not, and there is not much that is good to be said about professional organisations such as Business School accreditation and Accountancy bodies. Government and regulators are also chastised and the universities obliquely for currying favour with them.
Of course, practitioners in these disciplines are likely to be unhappy with these characterisations. But Parker is trying to make a point and breaking a few eggs in the process. For whilst in each Business School there are scholars happily teaching to formula, many are not. He puts himself in the not category as a critical management theorist. These iconoclasts are generally tolerated in Business Schools. And successfully ignored, though their books and papers are, usually, counted in the compilations of league tables of excellence in publishing.
Where is this going?
This book follows the formula for the books that I currently read and review: tell a ghastly story of how it is, and then lead the reader to a new and enlightened future. For the Business School, Parker has a number of ideas. The marketisation of education has turned education into a product. The Business School then provides the customer – students, their parents – with what it thinks they want; namely, the formula for being a manager, creating wealth (for self and others) and “success” (judged against spurious measures).
Parker’s solution is a School for Organising; one that does not view organising and management as synonymous. There is no reason – as demonstrated in countries such as Germany – for workers and their representatives to be excluded from Executive Boards. There is no reason for firms to prioritise shareholders over employees, workers and community. There can be no justification for the raison d’etre of firms to be to externalise pollution and bring about the collapse of civilisation (which is the likely outcome of uncontrolled climate change). The “hollowed-out” state, as we witness currently (writing in the middle of the Covid-19 pandemic lockdown in the UK), has left citizens vulnerable to a virus for want of Personal Protective Equipment, the provision of which in the UK was outsourced and subject to minimal inventory control, something that the managers of the supply companies and the politicians, learned in Business Schools.
The new Business School asks “How can people come together to do stuff”? (p113). What are the alternative modes of organising, both political (for example, anarchy) and business (for example, co-operatives such as wholefood wholesaler, SUMA, pp116-119)? It is truly interdisciplinary – not just within the School’s disciplines, but external, too. Other faculties such the natural sciences and humanities (art and business are very good companions). For myself and my own writing (I am writing a strategy textbook, please get in touch if you want to read it), the natural sciences are the starting point of our business courses. The planetary boundaries are the starting point for organising, not an afterthought. It is the job of the new Business School to alert students to the possibility of alternative ways of organising, evaluation and making decisions.
The disciplines ridiculed earlier are repositioned. “Accountancy is no longer about finding and hiding profits” (p169), marketing works for the people who buy things, not those who sell; operations management correctly prices carbon and other pollutants against speed and price. Economists teach de-growth or reformulate GDP in human terms.
Parker is also aware of the dangers of setting up a School for Organising. Over time, it becomes its own Business School, packed with salaried professionals with pensions detached from the people who are subject to the School’s teachings. There is a need, he argues, for de-schooling (drawn from the work of Ivan Illich), a much more co-operative approach to learning – learning being the operative word. That said, there has to be room for study – a discipline, a task – without which more bad decisions get made. De-schooling to its natural conclusion of no School at all is no panacea. The Business School is politics and politics is about power and the control of resources. There is nothing, however, to say that what the Business School teaches has to be capitalist-managerialist.
Picture: University of Leicester
Food security in the UK – time to worry
Filed under: Book reviews, Brexit, Co-operatives, education, Environment, Food | Tags: Tim Lang
Comments (4) Tim Lang (right), professor of Food Policy at City University’s Centre for Food Policy, is the go-to person by the media when fo
od policy and security make the headlines. He was a frequent contributor to BBC Radio 4’s Today programme when it became clear that the UK faced food shortages in the event of a hard Brexit. Reading his latest book, Feeding Britain: our food problems and how to fix them, one can see the extent that he should host the show, not just contribute to it when the headlines demand. Food security in the UK is a big problem, and its fragility has much to do with British exceptionalism, a situation that, in the context of Brexit, is fast receding. This is the first book that I have read that actually makes a credible case for Brexit; it is not intended to do so and it is something that Lang stumbled upon rather than explicitly endorsed. More on that in a moment.
Feeding Britain is published by Pelican Books (below left), an imprint of Penguin/Random House, The imprint publishes work on hugely topical issues in accessible styles. In reading Lang, one senses the haste with which it was written. It is in no way sloppy, far from it, but Lang knows every reference whether it be a long-published academic article, government report or personal interaction. It has inspired me to get moving on my own work. It demonstrates what is possible from a life of accrued knowledge. There are 470 pages of text. Each one is a gem. Each one leaves the reader out of breath.
Where to start? Actually, it is quite simple – some history basics. Britain’s imperial past is, to put it generously, chequered. It is, seemingly, the origin of the British thought, paraphrased here, that someone else will feed us, so we do not need to bother growing stuff ourselves. The growing is usually done by people in far-away lands, the rural poor, who receive a small fraction of the value of the product ascribed to it by end users, usually in the rich West. And even when fresh produce comes from near neighbours such as Spain, the back-breaking work is done by migrant labour often paid below minimum levels in the country, and affording them a lifestyle far short of that enjoyed by the beneficiaries of their labour. It also comes with a huge carbon footprint, a consequence of mono-culture and extensive transportation.
Coupled with the imperialism argument, the concentration of land ownership in the UK which started with the Enclosures of common land in the 17th and 18th Centuries; annexation of Church land under Henry VIII and more recently, enclosures arising from the privatisation of much of the public sector since 1980. Lang puts a figure on it – 189,000 families own 2/3 of UK land or one-half of England is owned by 25,000 people (p368). This is all made worse by the commodification of land – it is an investment, not a source of sustenance or habitat. 3,660 per cent is the figure by which land values have increased in the last 50 years. This means that, at the very least, it is difficult for small farmers to produce appropriately and sustainably. It forces tenants – and they usually are tenants – to use intensive methods to increase yield and further inflate the value. And on top of that, owners attract production subsidies from the EU – and post Brexit, presumably from UK taxpayers! (That mechanism is described in pages 370-7.)
Allied to the land ownership debate, Lang charts the changing percentage of income people spend on food vis-à-vis other things; notably, housing costs. The land owners, by this argument, not only enclose land and extract a high Gross Value Added from it (relative to the growers), they also own the properties in which the majority live. In extracting more from tenants, the margin has to be squeezed out of food prices (and by definition costs). Cheap food, argues Lang, is then equated with good food (not because it is nutritious, but because it seems to be good for someone else’s wealth). Moreover, the price of food rarely incorporates the externalised costs of production – environmental damage, health and society more generally such as life expectancy (which bad food shortens).
More positively, shortening supply chains would be a positive example of taking back control! And this is the Brexit argument. Though we know only too well, that Brexiters see the extension of food chains as being a Brexit benefit, and with it a reduction in quality, safety and increased insecurity, the UK no longer has the capability to defend those supply chains against hostile state actors or have the global influence to guarantee supply in time of scarcity, unlike in the imperial past. Security is also threatened by cyber attack on those supply chains, something that Lang believes is under appreciated within Government (and society more generally).
Lang argues that the National Minimum Wage or the National Living Wage needs to be re-calibrated to pay for, what he calls, sustainable diets. The factors above have been made worse – and particularly in the UK – by the population moving on to super-processed foods that are high in fat, salt and sugar (HFSS). Again, the costs of this are externalised (the National Health Service costs obesity alone as £6.5bn and a wider societal cost of £27bn – p207). Lang is adamant that an escalator tax on HFSS foods needs to be introduced. Pension funds, too, should divest from firms that manufacture HFSSs. Ad-spend (marketing is also disproportionate relative to health promotion, and it is targeted at children through social media. Lang also argues that the large supermarkets – singling out Tesco with its 30 per cent share of UK grocery market should be broken up.
Lang is not making an argument for growing out-of-seasonal foods in the UK in the middle of winter under lights and heat (even if
Source: Billy Hathorn
they had taste, which he clearly thinks such produce does not); that does not help the carbon footprint much. Rather, he is saying, that we have to grow more food in he UK (the country produces only 53 per cent of its own food) that is consumable directly and not, as seems to be true of much of arable farm produce in the UK, fed to animals, some of which like ruminants are hugely inefficient converters of plants into meat as well as huge greenhouse gas manufacturers. They fart. A lot. Land use is dominated by rearing and feeding animals. That very process, too, has an external cost that could be fatal in the future, antibiotic resistance as such valuable medicines are routinely fed to animals to retain “yields”.
There are also things about imported foods that I had not thought about. For example, we should not take water for granted, even though the UK is temperate and generally wet. If we import food from countries that are short of water, but whose products are full of it (fruit, vegetables, etc.), there is a net imbalance and a cost to the growing country and its people, nothwithstanding their foreign earning from the produce (often imported by air). Huge volumes of water are in foodstuffs that we do not anticipate, such as rice. Lang’s section on water imperialism is a must-read, pp225-44.
Cornish Aromatic apples (source: Brogdale)
Lang highlights that the UK produces so little of its own fruit. Whilst many exotic soft fruits are not viable in the UK, apples, pears and berries are eminently feasible and desirable. The population does not get anywhere near 5-a-day fruit and vegetable consumption (which seems truly bizarre and frightening at the same time). On horticulture, in 1950, there were 3000 apple growers in the UK, by the mid-1990s there were 800. Government grubbing regulations facilitated the destruction of orchards through subsidy! (p91). Lang contrasts the UK case with France where small growers and cooperatives are significant suppliers (the cooperatives provide the scale). Scale in the UK is provided by very large and concentrated growers and importers.
Finally, there is an important role for education, not only in terms of teaching children about food, its origins, how to grow it (sustainably), and how to cook primary ingredients, but also in what children are fed at school. Diet regulations for school meals, argues Lang, need to be universal, not just in the poorest, most regulated schools.
OK, I’ve done some hard work on the reading; it is time for us all to do some hard work in changing the way food is understood, used as a political tool, traded and prepared.
The Co-operative’s new era
So, the members have voted to accept the Mynors recommendations for a new structure that will limit the influence of the regional societies. Hence the CEO of the largest of the regional societies, Ben Reid of the Midcounties, has resigned from the national board (now leaving three vacancies). Despite the criticism of Reid, his own society has recently reported revenues of £1.2bn, suggesting they are doing something right and against the trend in the national society with its £2.5bn loss. Reid received particular criticism by Mynors as a member of the Audit Committee of the Co-operative Bank when the £1.5bn shortfall was revealed.
So, we may ask, what is about to happen? Already it is clear that the local societies will no longer occupy their 30 per cent or so of seats. Instead, the intention is to ‘professionalise’ the Board. The new members will be professional executives and no longer voluntary. This business is so big, goes the argument, it cannot be managed by non-professional co-operators. It is indeed they that got the Co-operative into its fix in the first place (see post 24 April 2014: https://weiterzugehen.net/2014/04/24/what-is-going-on-at-the-co-operative/).
The proposals are, according to the Guardian newspaper, the following: the creation of a board of directors that is qualified to run a business the size of the Co-op; the creation of a structure that holds the board to account; the principle of one member one vote; and provisions to avoid demutualisation.
The latter is quite interesting. It confirms that asset strippers – or carpet baggers as they were known in the era of building society
demutualisations in the 1980s- will not be tolerated and will not gain advantage by such conversion. That is inherently a good thing. One-member-one-vote also has merit, though professional Boards do not always practice such equivalence. Structures clearly should be such that executives are held to account. However, more important is the skills mix on a board to know what that means. (As we have seen from Banking, some executives are ‘infallible’ and charismatic, professional or not.) But being a co-operator should not disqualify one from membership of the Board of the Co-operative.
Image and further details about carpetbagging: http://news.bbc.co.uk/2/hi/special_report/1999/02/99/e-cyclopedia/297982.stm
What is going on at the Co-operative?
When I was growing up there was the local Hull Co-operative Society with its flagship department store (left) in the centre of the City. Local supermarkets were dotted around the suburbs. All rewarded customers with dividend stamps. My grandmother collected them – I built a record collection out of them. The insurance company functioned through agents. As a family, we had various policies. There was even a soft drinks delivery service. The ‘pop man’ ca
me on a Monday and delivered a bottle of something chosen by my mother.
The Hull Society basically collapsed in the early 80s. The department store closed leaving a building to fall into dereliction. The supermarkets also closed.
My time in South Yorkshire was punctuated by visits to department stores in Barnsley. And in 
Norwich, the East of England Society plodded on. Not so good in Brighton where the department store closed a few years ago. The shop was eccentric. Land in Brighton, however, is highly prized. The empty shop has not lingered too long. The façade has been retained with student accommodation being built on the land. From what I can see, the most powerful regional society, The Heart of England, still manages department stores. For example in Nuneaton (above left).
It has often been quite difficult to be with the Co-operative. The food shops were always lacking something. The bank, despite its ethical mission, ripped off savers. I left. When I bought a van, the insurance company was one of the few that would insure van as a non-commercial vehicle, but I still needed the endorsement of the agent. A bit of a nuisance.
The Co-operative’s difference was its ownership and management structure. It is notionally owned by the members (I am a member, though clearly insufficiently active) and managed by them. To quote John Harris in the Guardian, “At the base are around 48 area committees, each with 10 to 12 elected members who put in three-year terms. These people, in turn, elect seven regional boards – which duly elect 15 of the 21 members of the national group’s board of directors. Of the remaining six, five come from big regional Co-ops, and there is also an independent director.” (http://tinyurl.com/n3yjznb) In recent years, the governance structure has failed.
There seems to be something about size. In 2002 retail and wholesale were merged and housed in a hubristic new HQ in Manchester (left). Growth had traditionally been organic – from within rather than by acquisition. Both the bank and the supermarkets seem to have cast that principle aside. The bank failed its due diligence on buying the Britannia Building Society. Had someone looked closely they would have seen ‘sub-prime’ bad debts and walked away. So far the bank has been bailed out to the sum of £1.5bn with another £400m needed. It is now 70 per cent owned by hedge funds and private equity.
The supermarket in 2009 financed a takeover of the failed Somerfield supermarket chain. Somerfield had been a basket
case for many years, but for some reason the Co-operative’s chief executive, Peter Marks (right), convinced the board that speedy expansion was necessary and a takeover of Somerfield the right vehicle. The Somerfield assets have been written down by over £260m and a percentage will be sold.
Last week the Co-operative announced a loss of £2.5bn. Whilst the bank claims a good part of that, the other parts of the group are also ‘underperforming’. Turning this around is not going to be easy. I for one am not convinced that it will survive as an entity. Some of the more influential local societies such as the Heart of England Society have rejected such a plan put forward by Paul Mynors, now himself resigned from the Board. The AGM on 17 May 2014 will be one to watch.
Ironically, the analogue for the Co-operative, the John Lewis Partnership, is built on department stores and food retailing. Its management structure is very different. It is run as a PLC with the employees, as partners and members, sharing in the profits rather than managing the generation of profits.
Picture credits
Hull store: http://hullvalley.blogspot.co.uk/2011_10_01_archive.html
Stamps: http://150.co-operative.coop/150-to-150/our-collegues-113
Peter Marks: http://en.loadtr.com/Peter_Marks-493978.htm
Co-op HQ: Walter Menzies
Co-operatives
Readers of this blog know that I live in a housing co-operative where all members input into the management of the enterprise. Like all forms of organisation, it is imperfect. The structures that facilitate equitable governance can seem bureaucratic. But once established all members have resort to them and unless everyone agrees that they should be changed, they guide the collective towards prudent and non-exploitative management.
Not surprisingly in these recessionary times, co-operatives are very much in the news. Not just in housing, however. Co-operative businesses are much discussed even by this wretched government as a bulwark against forms of capitalism. One can always hear about the John Lewis model without actually understanding what that means. (John Lewis, arguably is a very special example of a co-operatively-owned business.) The capitalists resist co-operative principles because they cannot extract the profit as a dividend. In the days of de-mutualisation of building societies, these people resorted to ‘carpet bagging’ and rewarded us with Northern Rock. None of the demutualised buidling societies now survive. All have been absorbed into failed or failing banks. Halifax became HBOS, Abbey National had to be ‘rescued’ by Santander (Alliance and Leicester and Bradford and Bingley, too).
Peter Day’s current series of ‘In Business’ on the BBC has been exploring co-operative ownship of firms. Here is a link to the latest programme on co-operatives: http://www.bbc.co.uk/podcasts/series/worldbiz
Mike Weatherley MP – not representing Hove and Portslade
Weatherley celebrating criminalisation
My Conservative MP, Mike Weatherley (pictured), is quite a self-publicist. He ‘sends’ me his monthly newsletter in his quest to inform and influence. Increasingly this newletter is used to express his uninformed prejudices which I am increasingly offended by. I am sure that I am not the only one he offends in his constituency. I want to use my blog to make clear to him and others that he rarely represents my interests and I do not want to be associated with his intolerence.
For example from his recent newsletter:
Victoria Gardens campsite
Having recently been successful with my campaign to criminalise squatting, I have also taken the campers on Victoria Gardens in Brighton to task. Long-term camping in public spaces as a form of protest is unacceptable. The point of the protest was made long ago and it’s now just about a group of lazy campers hanging around for a fun time in front of our Royal Pavilion. This is not something that the public should have to pay for or put up with. Hard working taxpayers have had enough of these freeloaders. After publicly condemning the camp, I popped down to put my concerns to them in person. They claim to represent “the 99%”, so I informed them of the views of the REAL 99% – and told them to tidy up and go home.
Readers of this blog will know that I have posted on the subject of squatting before. Mr Weatherley is quite clearly a fan of the housing Minister, Grant Shapps, who ineptly equates squatting and murder. Mr Weatherley, some of us owe our homes and wellbeing to squatters. The country as a whole owes much to the squatting ‘movement’ such that it is. Moreover, there are not too many bulwarks against the property owning class that Mr Weatherley’s elitist party celebrates. Squatting is one of them in its demonstration of the inequity associated with housing that is a malaise in our society. And I suspect that Mr Weatherley, like the housing minister, Grant Shapps, thinks that he is protecting people who find their houses squatted after they have been away on holiday or business. I do not condone this, but this is rare. Most squatting is targeted at criminally empty properties that can and should be brought into habitation, preferably under some collective ownership and/or management. I would have thought that was a better use of his time, criminalising empty property. Mr Weatherley seeks to criminalise expressions of liberty and freedom in the name of protecting it.
There is more to say about Mr Weatherley.
Giving Northern Rock away
The sale of Northern Rock to Virgin at a loss to the taxpayer of £450m demonstrates something. First, nothing has been learned from recent experience. All this nonsense about bringing competition to the high street is meaningless in the world of financial services. One would have thought that if the government had wanted to develop competition then a second option might have been better.
That second option might have been remutualisation. Was it not the demutualisation of Northern Rock that got it into bother in the first place? And what happened to the government’s proclaimed love affair with co-operative ownership? I would have thought that mutual ownership was a viable and desirable option. The high street would have benefitted, businesses short of capital might have benefitted? But oh no. The taxpayer subsidises the transfer of a valuable asset – tens of thousands of viable mortgages – to an already very wealthy man. However, Jill Treanor writing in the Guardian on 2 December sees that large sums of money will also be transferred to existing senior managers:
The annual report for 2010 states that:
“The company will operate a long-term incentive plan for senior employees that will deliver financial rewards if the company achieves certain targets over a three year performance period. As the company did not make Ltip [long-term incentive plan] awards in 2010 it is the company’s intention to make awards in 2011 covering 2010 and 2011. The 2010 award will vest in March 2013 and the 2011 in March 2014 or upon successful exit from temporary public ownership if earlier” (emphasis added).
How convenient that the transfer occurs before the close of the year saving all of that unnecessary waiting around until 2014.
Now I understand.
Be informed 
