ISBN 978-1-84407-675-8. “The New Economics – A Bigger Picture” was written by David Boyle and Andrew Simms and published by Earthscan in 2009. (You get 192 pages including acknowledgments, eleven chapters, appendices and index.) The “New Economics” describes itself as being about “changing the rules by which economics works [...] about making things happen locally…”. It all sounds reasonable until the authors too easily shift into describing it vaguely as something to do with “people and planet”. We have become so used to the near-scientific certitudes of conventional economics that when somebody takes such nebulous concepts as ‘ethics’ and ‘ecology’ and describe them in economic terms it all sounds… Well, woolly. The new economics has found mainstream success. For example the European Union has a task force looking at redefining GDP whilst the growth of the Transition Towns movement is testimony to how everyone from politicians to ordinary people can embrace these exciting new concepts. Oddly enough neither example appears anywhere in this book.
Written as it was during the crash of 2008 it has an air of “I told you so” even if there is no triumph in any of this. Indeed, the more you read the more you understand that tackling Climate Change, monetary reform and Peak Oil conventionally all seems easier than trying to implement the theories of the new economics. It all seems like so much hardwork. And complicated to-boot. There are no certainties, only new theories. Those of us who lived happily through the new certainties of the neo-liberal economics of the Thatcher years will know how easy it is to get caught up in new economic panaceas only to see them crumble to dust in our hands. Why should the theories of the nef be any different? Of course there is a difference. Thatcherism was possible to implement because it was in people’s selfish self-interest to make it happen. That juggernaut has been rolling for years under the careful guidance of Reagan, Bush and Blair one wonders if it can ever be turned around. Afterall it has been 6000 years in the making according to this book.
One of our favourite stats from this book (pages 39 & 40) concerns the demonstrable ineffectiveness of trickle down theory. “The trouble is that economic growth is an extremely inefficient way of achieving poverty reduction, and is becoming even less effective. Between 1990 and 2001, for every $100 worth of growth in the world’s income per person, just 60 cents found its target and contributed to reducing poverty below the $1-a-day line…. Using this model [...] getting everyone in the world onto a modest income of $3 per day would require the natural resources of around 15 planets like Earth.” That is certainly one in the eye for the likes of Lomborg and Stern. Vandana Shiva would no doubt agree. Here we have solid evidence (albeit referring to a paper also co-written by Andrew Simms in 2006) that shatters the paradigm that has been held sacred in every discussion about Climate Change and conventional economics. Economic growth cannot be sustained and the kind we have is a machine that makes poverty. It can’t solve Climate Change. It sucks money from the poor into the hands of the rich and impoverishes the planet. What is more, due to the faulty way we measure wealth, it looks like we are richer whilst we are less and less happy. If this book was chock full of such paradigm-busting killer facts then this work would be a monstrous broadside through the armoured hull that is conventional economics. However, it is only a highlight. It is more or less downhill from there-on in. The rest of the book is what the old Bush Jnr Presidency might describe as a “wish list to Santa” or what Bjorn “skeptical environmentalist” Lomborg might call “the litany”. It lists every worry in the world and pretends it can solve them. However, they cannot solve greed.
Reading it you tend to get bedazzled that all of life’s problems are caused by conventional economics and that the New Economics can ride to the rescue. It isn’t always overly-convincing. It is almost as if the authors themselves seem nervous about discussing this in public. This may be a criticism of the style of writing. Contrast it to Michael Rowbotham’s “The Grip of Death” (ISBN 978 1 897766 40 8 Jon Carpenter Publishing 1998) where the author’s utter enthusiasm for his concept (that the money system creates ALL of life’s ills) sweeps the reader of his/her feet in its breathlessness. The problem maybe the fact that two author’s worked on this and it appears to go around in dizzying circles. The amusing chapter headings appear to give the impression that it has been nicely segregated up into neat areas. However each tends to return to the same view of the problem with the same ideas being repeated over and over again until the reader gets a touch of deja vu. That probably is the extent of the criticism of this book – its ideas are extremely broad and it is difficult to pick out a clear framework nor even a roadmap to the future. It is lots of ideas thrown at the page. The new economics is a work-in-progress waiting in the wings. It needs a political party to invest it into policy. When written large into our communities we may well know if any of this theory works.
Sure there are plenty of good examples of it working. However, recall again the point I made earlier about the early euphoric years of Thatcherism and the neo-liberal economics that had its examples of its voodoo apparently working. Everything works somewhere and sometime. But, beyond the cherry-picking… Can we write this across the face of civilisation and make it stick? Beyond this lack of ‘concreteness’ there is nothing wrong with this book. You find yourself turning page after page and agreeing with everything these authors have written. Of course it will appeal to those people who work on Transition Town projects. Towards the rear of the book the authors turn to the new localism to explain why some towns are killed by Walmart whilst others thrive with numerous locally-owned shops. But how do you get from Walmart-hell to local-retail-paradise? What is the roadmap? Is there any place that has been turned around? Where are the turn-key policies that politicians crave? The New Economics Foundation needs to take on the Chicago School of Economics at their own game. They need some metrics for such ideas as “moral coherence”, “human contact”, “authenticity” and “spirituality”. However they spurn traditional monetary measures and this is their weakness. The authors make numerous lists of their central tenets but these often get watered down into unrealistic wish lists. Take page 46 for example where they talk about “Create a holistic educational system that promotes creativity” and “Discourage materialism and clamp down on damaging advertising”. Lovely, if cringe worthy. (If you want more of this wishy-washy tosh just see pages 74 and 75.) OK, OK – I agree that the authors are right but this kind of talk is going to consign the new economics to oblivion. You wish they would get real.
However, if you can manage not to get too distracted by the woolly-thinking then there is a great book here screaming to be let loose. The discussion about multiple concurrent currencies is powerful. It is interesting to note here that they do not strongly advocate local currency. This Transition Town paradigm is twisting what Boyle and Simms are really saying. They are all for local currencies but it doesn’t mean that each town should have one. The purpose of such a currency is to boost the multiplier effect inside a community. A local currency is a simplistic implementation of a solution. There are other ways of creating money that sticks. It is conceivable that we could develop “community money” that is the same across the UK but can only be spent, like vouchers, only in local shops. As long as there is reciprocity this will work the same way. Likewise there is nothing wrong with a “single currency” for international trade. Each currency should have its purpose. There is also much talk about the debt money system although the concept of monetary reform is soft-peddled by the authors. Rather than advocating a widescale change to debt-free money via a citizen’s income they only suggest that the government creates money for specific capital projects.
Monetary reform should be at the heart of any ‘new economics’ alongside the reprioritising of human happiness into the centre of wealth measurement. The latter the authors cover very well with their Happy Planet Index (a case of nef genius at work). If you can measure it then it matters. There is so much to this book – so many great ideas – that this review can barely scratch the surface. You need to read it to understand exactly how we ended up in the mess we are in. The mess is a natural outcome of a flawed economic paradigm and it can be reversed IF people understand the problem and are given options. For example, the pursuit of pure monetary efficiency often achieves the opposite of what was intended. Just look at that shiny new Walmart that is undermining local social capital. The intention was to bring local jobs and prosperity. Instead they brought social decay. It didn’t work. The policy makers just can’t see the dots between the two. This book should be compulsory reading for every undergrad economist, every politician, every civil servant, every banker, everyone. We have to join the dots. This book joins those dots. So should we.