An economy for all?

7 Apr 2017 Ryan Miller    Last updated: 9 Apr 2017

Speakers at the Imagine! Belfast event
Speakers at the Imagine! Belfast event

The economy is there to serve the public and not the other way round. Scope looks at the inversion of this relationship and why a revolution in economic thinking could have huge benefits for local people.

Poverty and inequality is rising; the economy is improving.

Two conflicting statements we are used to hearing together or, at least, in parallel. Certainly, according to the City Council, they apply to Belfast in recent years.

But perhaps we have this wrong. These statements are not conflicting – they are contradictory.

What is the economy for? What makes it healthy? These were the themes at An economy for all – a discussion that took place last month at Belfast City Hall as part of the Imagine! Festival.

The discussion was chaired by Neil McInroy, from the Manchester Centre for Local Economic Strategies, and he set out his own position early on:

“The economy is getting better but we are all getting poorer. Something weird is going on. This is not a unique problem to Belfast – it’s worldwide. We live in oxymoronic times, ones in which there has never been as much wealth in the world - but there is also more despair and poverty. The 12 richest people are as rich as the 2 billion poorest.

“In Northern Ireland, 70,000 jobs were created in the last five years. There is huge wealth in the city centre. But pay is lower than it was a decade ago – and 45% of the poor are in work. The cycle of poverty seems to be deepening. There’s a growing realisation – this is the hope – that we need to do something about this. There’s something happening in the world.

“There are three reasons for this. One is economic: the global economy cannot afford the poor to be poor because then they can’t buy the stuff that’s produced; second – socially, or morally, there’s something in our hearts, in even the hearts of the most arch capitalist, whereby at some point walk we will past someone and think “look at that poor guy there”; the third reason is political: when people are struggling they vote in weird ways, for strange parties, for the populists and feel-goods and so on.”

Servant and master – and social enterprises

Are we servants to the economy, or does it exist to cater for the people?

A simple question with an obvious answer yet far too often public policy seems built toward the former and not the latter.

Mr McInroy said that economic thinking had lost its way over time – even citing its etymology. From the Greek oikos (meaning house, or family) and nomos (management, or law). Oikonomos, managing the resources of, and for, the house and family. A means and not an end.

The City Hall discussion featured speakers from the City Council, Ulster University, Belfast Met and the Greater Shankill Partnership – and all of them shared ideas about how the local economy, and education system, can be better geared to the benefit of local people, and be less about servicing the sum total of local GDP as the ultimate end in itself.

A revolution in how we appraise the economy could be a huge boost to social enterprises, and could also place more and more responsibility on their shoulders

The third sector is in difficulties at the minute, largely due to huge uncertainty over budgeting because of the collapse of Stormont, but if there are serious moves to recalibrate how we think about the economy then it has a huge role to play.

This role is ingrained in the necessary wider missions that community and voluntary organisations have; their mission is to provide some service or perform some good, things that are rarely measured by a straightforward bottom line.

The private sector will always have a simply enormous role to play in any flourishing society but it does not cover all bases. There are itches that for-profit organisations cannot scratch and, the more we think about the economy as something that serves society, and not the other way round, the more will be asked of organisations that do not measure success solely on a balance sheet.

An economy for all

Economists have a poor reputation at the minute. This is for good reason. They have, in general, overstepped their remit (or gone further, continuing to push shibboleths that have shown to be naïve or, at worst, downright wrong, to protect a dismal status quo).

It would be a serious harm to dismiss the inexact but beneficial craft of economics entirely, or even to get rid of the many ways it can and does help shape a better present and future.

What economists are supposed to do is analyse, as best as possible, the workings of our civic structures and predict outcomes based on our direction of travel and any changes we might make; identify the many levers we have at our disposal to make adjustments and to shine a light on what will happen when we pull them (or not).

What it is not their job to do is moralise, or to dictate to people what the aims of the economy should be – this is a parallel discussion, an entirely separate debate but, for too long, the lines between the two have become blurred.

Call it social, or moral, philosophy, if you like. But maybe that is too self important. Put more simply, it is the direction of travel we are choosing for our communities and for ourselves.

Who chooses whether this direction is good? Not economists. These decisions lie elsewhere, covered by another word with Greek origins. Not oikos and nemain – but demos and kratia. Democracy, the rule of the people.

If you hear again that poverty and inequality is rising, or that the majority of people see their resources spread more and more thinly, but that the economy is doing well, don’t be shy about about saying otherwise.

The people get to decide if the economy is doing well – and if it is not doing well for the people then why should they call it a success? What else is the economy for?

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