Don’t Be Scared About the End of Capitalism: Be Excited to Build What Comes Next

by Jason Hickel and Martin Kirk, Fast Company: https://www.fastcompany.com/40454254/dont-be-scared-about-the-end-of-capitalism-be-excited-to-build-what-comes-next

When have we humans ever accepted the idea that change for the better is a thing of the past? [Image: Ket4up/iStock]

These are fast-changing times. Old certainties are collapsing around us and people are scrambling for new ways of being in the world. As we pointed out in a recent article, 51% of young people in the United States no longer support the system of capitalism. And a solid 55% of Americans of all ages believe that capitalism is fundamentally unfair.

But question capitalism in public and you’re likely to get some angry responses. People immediately assume that you want to see socialism or communism instead. They tell you to go and live in Venezuela, the current flogging-horse for socialism, or they hit you with dreary images of Soviet Russia with all its violence, dysfunction, and grey conformity. They don’t consider that you might want something beyond caricatures and old dogmas.

These old ‘isms’ lurk in the shadows of any discussion on capitalism. The cyber-punk author William Gibson has a term for this effect: “semiotic ghosts”; one concept that haunts another, regardless of any useful or intended connection.

There’s no good reason to remain captive to these old ghosts. All they do is stop us having a clear-headed conversation about the future. Soviet Russia was an unmitigated social and economic disaster; that’s easy to dispel. But, of course, not all experiments with socialist principles have gone so horribly wrong. Take the social democracies of Sweden and Finland, for example, or even post-war Britain and the New Deal in the U.S. There are many systems that have effectively harnessed the economy to deliver shared prosperity.

But here’s the thing. While these systems clearly produce more positive social outcomes than laissez-faire systems do (think about the record high levels of health, education and well-being in Scandinavian countries, for example), even the best of them don’t offer the solutions we so urgently need right now, in an era of climate change and ecological collapse. Right now we are overshooting Earth’s carrying capacity by a crushing 64% each year, in terms of our resource use and greenhouse gas emissions.

The socialism that exists in the world today, on its own, has nothing much to say about this. Just like capitalism, it relies on endless, indeed exponential GDP growth, ever-increasing levels of extraction and production and consumption. The two systems may disagree about how best to distribute the yields of a plundered earth, but they do not question the process of plunder itself.

Fortunately, there is already a wealth of language and ideas out there that stretch well beyond these dusty old binaries. They are driven by a hugely diverse community of thinkers, innovators, and practitioners. There are organizations like the P2P (Peer to Peer) Foundation, Evonomics, The Next System Project, and the Institute for New Economic Thinking reimagining the global economy. The proposed models are even more varied: from
complexity, to post-growth, de-growth, land-based, regenerative, circular, and even the deliciously named donut economics.

Then, there are the many communities of practice, from the Zapatistas in Mexico to the barter economies of Detroit, from the global Transition Network, to Bhutan, with its Gross National Happiness index. There are even serious economists and writers, from Jeremy Rifkin to David Flemingto Paul Mason, making a spirited case that the evolution beyond capitalism is well underway and unstoppable, thanks to already active ecological feedback loops and/or the arrival of the near zero-marginal cost products and services.This list barely scratches the surface.

The thinking is rich and varied, but all of these approaches share the virtue of being informed by up-to-date science and the reality of today’s big problems. They move beyond the reductionist dogmas of orthodox economics and embrace complexity; they focus on regenerating rather than simply using-up our planet’s resources; they think more holistically about how to live well within ecological boundaries; some of them draw on indigenous knowledge and lore about how to stay in balance with nature; others confront the contradictions of endless growth head on.

Not all would necessarily describe themselves as anti- or even post-capitalist, but they are all, in one way or another, breaking through the dry seals of neoclassical economic theory upon which capitalism rests.
Still, resistance to innovation is strong. One reason is surely that our culture has been stewed in capitalist logic for so long that it feels impregnable. Our instinct is now to see it as natural; some even go so far as to deem it divine. The notion that we should prioritize the production of capital over all other things has become a kind of common sense; the way humans must organize.

To question capitalism can trigger a visceral reaction; it can feel like an attack not just on common sense but on our personal identities. [Image: Ket4up/iStock]

Another reason, clearly linked, is the blindness of much of the academic world. Take, for example, the University of Manchester, where a group of economics students asked for their syllabus to be upgraded to account for the realities of a post-crash world. Joe Earle, one of the organizers of what The Guardian described as a “quiet revolution against orthodox free-market teaching” told the newspaper: “[Neoclassical economics] is given such a dominant position in our modules that many students aren’t even aware that there are other distinct theories out there that question the assumptions, methodologies and conclusions of the economics we are taught.”

In much the same way as House minority leader, Nancy Pelosi, rebuffed college student Trevor Hill when he asked whether the Democratic Party would consider any alternatives to capitalism, Manchester University’s response was a flat no. Their economics course, they said, “focuses on mainstream approaches, reflecting the current state of the discipline”. Mainstream, current, anything but fresh. Such attitudes have spawned a global student movement, Rethinking Economics, with chapters as far afield as Ecuador, Uganda, and China.

Capitalism has become a dogma, and dogmas die very slowly and very reluctantly. It is a system that has co-evolved with modernity, so it has the full force of social and institutional norms behind it. Its essential logic is even woven into most of our worldviews, which is to say, our brains. To question it can trigger a visceral reaction; it can feel like an attack not just on common sense but on our personal identities.

But even if you believe it was once the best system ever, you can still see that today it has become necrotic and dangerous. This is demonstrated most starkly by two facts: The first is that the system is doing little now to improve the lives of the majority of humans: by some estimates, 4.3 billion of us are living in poverty, and that number has risen significantly over the past few decades. The ghostly responses to this tend to be either unimaginative–“If you think it’s bad, try living in Zimbabwe”–or zealous: “Well, that’s because there’s not enough capitalism. Let it loose with more deregulation, or give it time and it will raise their incomes too.”

One of the many problems with this last argument is the second fact: with just half of us living above the poverty line, capitalism’s endless need for resources is already driving us over the cliff-edge of climate change and ecological collapse. This ranges from those that are both finite and dangerous to use, like fossil fuels, to those that are being used so fast that they don’t have time to regenerate, like fish stocks and the soil in which we grow our food. Those 4.3 billion more people living ‘successful’ hyper-consumption lifestyles? The laws of physics would need to change. Even Elon Musk can’t do that.

The path to a better future will be cut by regular people being curious and open enough to challenge the wisdom received from our schools, our parents, and our governments. [Image: Ket4up/iStock]

It would be a sad and defeated world that simply accepted the prebaked assumption that capitalism (or socialism, or communism) represents the last stage of human thought; our ingenuity exhausted. Capitalism’s fundamental rules–like the necessity for endless GDP growth, which requires treating our planet as an infinite pit of value and damage to it as an “externality”– can be upgraded. Of course they can. There are plenty of options on the table. When have we humans ever accepted the idea that change for the better is a thing of the past?

Of course, transcending capitalism might feel impossible right now. The political mainstream has its feet firmly planted and deeply rooted in that soil. But with the pace of events today, the unimaginable can become the possible, and even the inevitable with remarkable speed. The path to a better future will be cut by regular people being curious and open enough to challenge the wisdom received from our schools, our parents, and our governments, and look at the world with fresh eyes.

We can let the ghosts go. We can allow ourselves the freedom to do what humans do best: innovate.

Five Cities, 55 Projects: Mapping ‘Good’ Local Economics in the UK

Central Newcastle (metro.co.uk)

by Clare Goff, Editor of New Start magazine, NewStart: http://newstartmag.co.uk/your-blogs/five-cities-55-projects-mapping-good-local-economics-in-the-uk/

New Start, CLES and the New Economics Foundation, with funding from the Friends Provident Foundation, are travelling the UK during 2015 and 2016, visiting its eleven core cities to map what a ‘good’ approach to local economics looks like.

In each place we are seeking out examples of a different approach to local economics and holding an event with local business, government and community leaders to discuss the state of their local economy and how it could work better.

Since May this year we have travelled to Manchester, Birmingham, Bristol, Cardiff and Newcastle, bringing together local leaders in each place. Here are ten things we’ve learned:

1. Trickle-down is not working: UK cities may have a good story to tell in terms of economic growth and attracting inward investment but that growth is not reaching far. ‘Doughnuts of deprivation’ persist around many cities, in areas where the economic story has not changed for 30 years. South Wales, for example, has been a Tier 1 Assisted Area since 1934. If local economic policy continues to prioritise economic growth through policies such as inward investment, then poverty and inequality will continue to grow.

2. Economic decision-making is not representative. In the cities we have visited so far, local economic decisions are being made by a small set of people, usually from big business and the public sector. There are few mechanisms to include the views of small business and local communities. Local collaboration has worsened since the closure of Regional Development Agencies and the breakdown of local strategic partnerships. Greater effort is needed to ensure that the needs of all local populations are considered in local economic strategy.

3. There is a mismatch between the needs of local communities and the dominant economic model. During our Cardiff event this mismatch came through clearly. Delegates struggled to align the needs of their communities - sustainable jobs, a greater distribution of wealth, more control over economic decisions - with the economic model they are being asked to fit in with, namely the pursuit of regional growth (GVA).

4. There is no common narrative about what a ‘good’ local economy looks like and how to create one. Local practitioners are frustrated by competing aims that hold back progress. When the focus of economic strategy is on maximising regional growth at all costs, it is difficult to fight for a broader approach, one that benefits the common good. As one delegate in Birmingham said: ‘We have to switch perception from maximizing GVA to thinking about who benefits.’ RESO in Montreal is an example of a collaborative local partnership that brings together the public, private and social sectors around a vision of ‘good local economic development’.

5. Social and economic aims are rarely aligned. Local economic policies are often not directly connected into efforts to reduce poverty or inequality. Plans to boost economic growth - be it through a new shopping centre or Enterprise Zone - are rarely joined up with plans to tackle local unemployment or used to create training opportunities. A ‘double dividend’ approach could ensure that all economic policies are linked to social outcomes.

6. ‘Alternative’ approaches to local economics can lead to gentrification and further marginalisation. Bristol is rightly proud of its strong ‘alternative’ sectors - large green and social economies - but is seeing inequality rise as the middle class jobs those sectors create leads to gentrification. A true ‘alternative’ to mainstream local economics focuses efforts on poverty reduction, tackling inequality and bottom-up job creation.

7. Small, locally-led businesses create stronger, healthier economies. Locally-led businesses help circulate money within a place and unlock greater economic power than big business, according to research from Localise West Midlands, which is working to make the case for greater levels of community economic development. Despite this, local economic policy tends to favour and support big business.

8. 'Grassroots economics' provides an alternative to mainstream job creation. In each city we have travelled to we have found examples of organisations that are focused on understanding local needs, unlocking the resources of people and places and building upwards. In Manchester, asset-based community development is mapping and connecting the assets of local communities; Black Country Make in Wolverhampton and Knowle West Media Centre in Bristol are providing training in digital manufacturing and using local assets to set up micro-businesses.

9. Anchor institutions such as hospitals, housing organisations, councils and colleges are becoming economic actors, by localising their spend and supply chains. The Midlands Metropolitan Hospital in Sandwell plans to root itself in its local community in a similar way to that of Cadbury’s in Bourneville, and in Manchester the council has analysed the impact of its spend on its local economy and is using progressive procurement policies to make that spend work harder.

10. There is an alternative. In many localities in the UK the economic picture has not shifted for many years and in some places it is going backwards. We can carry on doing the same thing over and over again, each time expecting different results. Or we can try a different approach. The last forty years have shown us what a policy focused on economic growth does to cities; now it’s time to see where a different approach might lead. Our work so far has uncovered an appetite for an alternative and glimpses of what that looks like on the ground. Cities now need pioneers to take that vision forward.

• Read New Start editions from Greater Manchester, Birmingham, Bristol, Cardiff and Newcastle.

Flashmobs and Flamenco: How Spain's Greatest Artform Became a Tool for Political Protest

Flamenco (Photo credit: Wikipedia)

by Matthew Machin-Autenrieth, University of Cambridge, The Conversation: https://theconversation.com/flashmobs-and-flamenco-how-spains-greatest-artform-became-a-tool-for-political-protest-49310

Flamenco is perhaps Spain’s most alluring cultural phenomenon, characterised by the stereotypes of sun, passion and tumbling black hair.

Political protest and social activism are less likely to come to mind when thinking of flamenco, but for some performers it has always been a powerful tool for voicing political protest.

Never more so than today. Spain has suffered immensely in the global economic crisis - especially Andalusia, the southernmost region of the country most associated with flamenco.

Neoliberalism has taken its toll on the Spanish people, who are suffering one of the highest levels of unemployment in Europe. In 2011, this led to the infamous 15M (indignados) protest movement that mobilised millions of citizens across the country to challenge policies of austerity following the banking crisis.

On the back of this movement, the flashmob group Flo6x8 has rebranded flamenco as a powerful political weapon. This anti-capitalist group has been well publicised for its political performances that have taken place in banks and even the Andalusian parliament.

Using the body and voice as political tools, the group carries out carefully choreographed acciones (actions) in front of bemused bank staff and customers. These performances are recorded and then posted online, attracting a huge number of views.

Through explicitly political lyrics, Flo6x8 denounces the banking crisis and the austerity measures resulting from European bailouts. By claiming public, capitalist spaces the performers give a powerful political message that challenges the status quo.

But these performances also break with typical gendered stereotypes in flamenco. The exotic, seductive and “oriental” image of the female dancer is turned on its head. Instead the female dancers in these performances become powerful, political figures.

The group believes it is repoliticising flamenco, returning to its historical origins. Nowadays flamenco is closely associated with the world music industry and tourism. Yet the origins of flamenco tell a different story. Flamenco was born among socially marginalised communities such as Gypsies, miners and other disadvantaged Andalusian groups. Lyrics from the 18th and 19th centuries tell tales of poverty and social hardship.

True, the flamenco we know today owes much of its legacy to the commercial theatres (cafés cantantes) of mid-19th century Spain. But its political side has come out during times of social upheaval. Republicans during the Spanish Civil War sang ideological messages. And singers of the 1960/70s such as Manuel Gerena and José Menese challenged the Franco regime in pursuit of democracy and equality.

Fandangos republicanos sung by Manuel González “El Guerrita”.

I want to say with passion, this fandango that I sing, Spain is Republican. And this is from the heart, down with the law and tyranny.

Flo6x8 see themselves as the continuation of this political legacy, where flamenco becomes a catalyst for social change as can be seen by this anti-austerity flashmob in the Andalusian parliament in June 2014.

Flo6x8 anti-austerity protest at the plenary session of the Andalusian parliament in June 2014.

The controversial new gag law introduced by the Spanish government in 2015 has restricted the activities of Flo6x8. Yet members remain committed to flamenco as a political weapon against continued social and economic inequalities in Spain.

Confronting racism

The history of flamenco has also been used to promote tolerance. Flamenco is said to have links to Spain’s Islamic past a period when Christians, Jews and Muslims allegedly coexisted in peace (convivencia). Although criticised by some as a utopian myth, convivencia carries a message of tolerance for today. Many argue that flamenco emerged from an amalgamation of cultural influences in southern Spain: Arabs, Jews, Gypsies, African slaves, Andalusian underclasses and so on. The belief, then, is that flamenco is born of intercultural dialogue.

However, Spain’s relationship with its Islamic past is problematic. In some quarters it is celebrated - in others it is shunned. Since the 1980s, increasing immigration into Spain, particularly from Morocco, has complicated matters. Like in many countries across Europe, racial tensions and Islamophobia have increased. Here flamenco has been used to confront racial tensions and promote tolerance.

In 2003, the dancer Ángeles Gabaldón and her company premiered the show Inmigración (Immigration), which was also broadcast online to more than 50,000 people. Inmigración raised awareness of the humanitarian issues surrounding migration across the Strait of Gibraltar: human trafficking, migrant deaths, immigrant sex work and racism.

The show, which featured a multiracial cast, sought to raise awareness of the social reality of immigration – and, interestingly, also presented Spain’s own history of emigration before it became a country of immigration. But the most powerful element of Inmigración was how the past and the present were joined together in musical performance. Flamenco was combined with musical styles believed to have originated in Islamic Spain that now exist in North Africa.

The cast included Jalal Chekara, a Moroccan performer who has lived in Spain for many years. He is known for his collaborations with flamenco musicians, promoting tolerance through the musical re-imagining of a shared cultural history.

Since 2003, the situation across Spain and Europe has deteriorated. The current migrant crisis is maybe the most difficult challenge facing Europe and Inmigración is perhaps even more relevant today than when it was first performed. It shows the capacity of flamenco as a form of social criticism that can give power to the powerless and voice to the voiceless.

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Joshua Brown, a lecturer in Ethnomusicology at Chapman University and Juan Pinilla, flamenco singer and writer in Granada, assisted with research for this article. The author will be appearing at the Cambridge Festival of Ideas.

Matthew Machin-Autenrieth, Leverhulme Early Career Fellow, University of Cambridge

This article was originally published on The Conversation. Read the original article.

An Uber for Apartments Could Solve Some Common Housing Problems

Source: abc.net.au

by Andrea Sharam, Swinburne University of Technology and Lyndall Bryant, Queensland University of Technology, The Conversation: http://theconversation.com/an-uber-for-apartments-could-solve-some-common-housing-problems-44185

Speculative property developers, criticised for building dog boxes and the slums of tomorrow, are generally hated by urban planners and the public alike.

But the doors of state governments are seemingly always open to developers and their lobbyists.

Politicians find it hard to say no to the demands of the development industry for concessions because of the contribution housing construction makes to the economic bottom line and because there is a need for well located housing. New supply is also seen as a solution to declining housing affordability.

Classical economic theory however is too simplistic for housing supply. Instead, an offshoot of Game Theory - Market Design - not only offers greater insight into apartment supply but also can simultaneously address price, design and quality issues.

New research reveals the most significant risk in residential development is settlement risk - when buyers fail to proceed with their purchase despite there being a pre-sale contract. At the point of settlement, the developer has expended all the project funds only to see forecast revenue evaporate.

While new buyers may be found, this process is likely to strip the profitability out of the project. As the global financial crisis exposed, buyers are inclined to walk if property values slide.

This settlement problem reflects a poor legal mechanism (the pre-sale contract), and a lack of incentive for truthfulness. A second problem is the search costs of finding buyers. At around 10% of project costs, pre-sales are more expensive to developers than finance. This is where Market Design comes in.

Matching buyers and sellers

Market Design argues individuals will cooperate where there is an advantage in doing so. This is the premise of the “sharing economy”. Much of the innovation in the sharing economy also reflects another insight of Market Design; that markets can be constructed in different ways to serve different purposes.

Our interest here is in two-sided matching markets, which is a common design for e-commerce. Buyers are aggregated on one side of the market and sellers on the other with a market manager. Think Airbnb or Uber. Aggregating potential buyers of apartments would resolve the issue of searching for presales: taking the process from looking for needles in the haystack to shooting fish in a barrel.

Both buyers and developers would need to be registered participants, and the market manager would be responsible for recruiting participants and matching development opportunities to buyers. Pre-identification of buyers would avoid much of the cost of pre-sales and search time.

In addition there could be real-time communication and customer segmentation that permitted developers to take account of the actual expressed preferences of the buyers. An expanded apartment product range and cost reduction should make apartments more attractive to owner-occupiers, reducing settlement risk. The same can be said of having more owner-occupiers and fewer investors.

Pre-sales are one of the most expensive and riskiest elements of property development. Dean Lewins/AAP

Keeping developers honest

However, as one financier (who agreed to be interviewed but not identified) rightly noted, developers can be expected to pocket the savings. Residential development is oligopolistic so there needs to be a source of competition to put pressure on prices, and who better than consumers themselves?

DIY apartment developers, what we call “deliberative” developers, now comprise 10% of all new housing in Berlin, and it has taken off in Europe. Deliberative developers make cost savings in the order or 25-30% and get the type and high quality product they want.

Financing constraints have meant deliberative development in Australia has been the preserve of the well heeled, but support from impact investors for example, would enable ordinary households access to such self-help schemes.

One further change however is required. Planning schemes need to impose density restrictions (in the form of height limits, floor space ratios or bedroom quotas) in urban localities where housing demand and land values are high in order to dampen speculation and de-risk development by creating certainty.

Building a model that encourages owner-occupiers

The existing development model relies on capturing uplift in site value, and suits investors (incentivised by tax concessions) seeking rental yields in the short term and capital gains in the longer term. The price of land in the vicinity of redevelopment sites is then pushed up as landholders' expectation of future yield is raised.

It is a vicious circle in which developers seek to compensate for these higher prices through increased dwelling yields, smaller apartments and reduced amenity, further alienating would be owner-occupiers from the market.

However restrictions on over-development of larger infill sites needs to be offset by permitting intensification of “greyfield” suburbs. Aggregating existing housing lots to enable precinct regeneration, and moderate height and density increases would permit better use of airspace, delivering housing designs that can optimise land use while retaining amenity.

Redesigning the market and supporting deliberative development are the keys to achieving good, affordable apartments.

Andrea Sharam is Research Fellow housing & homelessness at Swinburne University of Technology.
Lyndall Bryant is Lecturer in Property Economics at Queensland University of Technology.

This article was originally published on The Conversation. Read the original article.