When the financial crisis came, people talked excitedly about the opportunity for a new economics. But nothing really happened. No new ideas emerged. All we seem to have is an argument about cuts.
“Cuts!” “No, fewer cuts!” “OK, slightly fewer cuts!” (Oh, and a few people agreeing that social and mutual ownership and helping the environment are good things. But not really doing anything about it.)
This is boring, predictable and unhelpful. And it’s certainly not new. So hey, why not have a crack at a new economics?
OK. How about “Harmonomics”!? (Just go with it…)
The lives of people in this country are a mix of a) making money b) helping others and c) being social. We sometimes compete against others, sometimes work for others and sometimes co-operate together with others.
The UK economy has the same mix. First, some of the capital in the system and the work we do is managed by private individuals and businesses with the aim of making more money – helping create a more financially wealthy UK economy.
Second, some of the money and the labour is controlled by the government or local councils with the aim of helping people - creating public goods and services.
Third, some activity and money is controlled by people, charities, trusts, associations and co-operatives – aiming to make the UK a more socially or environmentally rich place to live.
And there is increasing interdependence between these spheres. So shouldn't economics consider how these sectors reinforce or undermine each other?
It seems we waste a lot of effort and money when these different parts of the economy work destructively and inefficiently – harming each other. Taxes can hinder enterprise, banks can almost bankrupt the state, businesses can undermine communities, the state can crowd out social action, etc.
But on the other hand, they can support each other - where capital, labour and investment are more harmoniously aligned. Businesses can reinvigorate communities, the state can provide the infrastructure that helps businesses thrive, social action can save government money, communities can support businesses, etc.
The UK seems to have rather too much of the first set of harmful activity. The private and the public sector grappling with each other, feeding off each other and bluffing in a duel to the death. Meanwhile, while we have (arguably unsustainable) private affluence and considerable public improvement, we also have the spectre of social impoverishment.
The Big Society is part of one side of this triangle. The Government argue that if they get out of the way, then social action can flourish. But this is only half the story (and the gloomy half at that) of a third of the whole picture.
Couldn’t we be more positive about how different parts of the economy can support each other in harmony and not just worry about how one sector can get in the way of another?
The three parts of the economy working together in harmony, instead of harming each other.
Surely someone can do better than that? Please anyone? Anyone…? Please!!