There is a great paragraph in an article by Aditya Chakrabortty in the Guardian this morning. He says it's time we:
learn one of the hardest lessons of Brexit: the reason the political geography of Britain is so divided is because its economic geography is so unequal. Treasury levers and Bank of England billions are barely any use here. Instead, what's needed is an attentiveness to place.
This is, of course, what the Green New Deal is all about. If there is one thing that identifies that idea beyond the emphasis on sustainable investment it is the idea of jobs in every constituency that such investment would bring.
Aditya notes how this idea is now being taken further. And I agree with him that it needs to be. If we live in a post globalisation world (and we may be) then the notion of what the local economy means has to change. It is not going to about major employment hubs. Nor is it going to be about the financial flows that excite most economists. The local economy needs to be seen as being about what makes local societies work. And most of what local societies do is serve each other.
So they care for each other.
Teach each other.
Service and repair for each other.
And with luck they make enough to export to pay for what they import, although this is not always possible. But these flows are smaller than you might think: the local ones are almost invariably bigger. Even in tourist resorts that can be true.
Go into amy small market town (I live near plenty) and you will realise that this is the case. Well, that and remittances: these are the inflows commuters bring in.
But until we begin to think about that and work out how the macro economy fits into localities and not how they fit into the global world we will have all our economic thinking wrong as far as most people are concerned.
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Aditya Chakrabortty is a star.
And Richard Douthwaite would be saying the same if he were still here and is quite happy for you take this up.
Economics and econiomic policy here is too fond of big headline sums as you say. And I also agree that scant attention is given to the interface dynamics between globalised and local forces at work in our communities.
You talk of of local economies as if they were nation states (exports/imports/remittances etc) but in order for them to function properly, they will always depend on vertical money from government being spent into their local economies; in non-wealthy areas there is simply not enough horizontal money circulating around them to be sustainable, whilst bartering and favours (e.g. in I, Daniel Blake) can only make a few tiny contributions to enable some functionality at the very lowest level, in the absence of government money.
But, in reality, that vertical money is being systematically reduced by government, both at the personal level (benefit payments, real public sector wages, imposition of bedroom taxes etc) as well as at the municipal level (support grants to councils, payments to schools, hospitals etc).
As such, “localism” is no less vulnerable to government whim, and can be starved of financial resources at a stroke, at which point it cannot function. That is its Achilles heel.
Regional inequality is as bad for the economy as a whole as high income or wealth inequality. You have to have a regional policy to address this or inequality will grow inexorably until the system breaks. We are already at breaking point as we have seen this year.
The work which established the direct link between major social indicators and local economies was of course ‘The Spirit Level’ in 2009. While the current trends are largely downward, I agree, this work gives hope that if we successfully address all forms of inequality then our societies can quickly become more resilient and produce far more healthy outcomes for everyone.
I think the tide is turning on this appreciation of how we can live better.
Remember that the NHS is a large part of any local economy. It distributes about £28-£30 billion a year through wages across England. This is a good example of where macro meets microeconomics, and where caring for each other and unselfishness really matter. So, it makes really good economic sense to properly fund the NHS.
I do wish you would spend more time considering the economic value of the NHS!
I agree, but the figure is much higher than £30bn
It is more like £100bn I suspect
Don’t forget we’re also up against peoples attitudes and the MSM brainwashing that’s been going on for decades. Neo-liberalism has created a viscous circle, or spiral towards the bottom. It’s really important to re-establish the understanding between what you pay and your own earning potential.
From my youth I don’t remember people being as begrudging, yes everyone always thinks they’re worth more but I remember a general understanding of the value/worth of others.