Presentation on theme: "Consumers or Citizens? Cliff Mills 3 rd November 2009 St Michaels Macclesfield In the series: How then shall we live?"— Presentation transcript:
Consumers or Citizens? Cliff Mills 3 rd November 2009 St Michaels Macclesfield In the series: How then shall we live?
Your top three issues? Global poverty Climate change Peak oil Economic crisis Energy security Environmental destruction
Likely to be … Huge issues Affecting lots of people Caused by many factors Influenced by big organisations I am too small and insignificant There is nothing I can do about it
How we shape the world we live in We are not too small We can do something We have to –Governments probably cant solve biggest issues –Other large institutions cant or wont We are the only ones who can
This talk Todays world –Why things are the way that they are –How we fit in, the part we play –What drives it A different sort of world –Whether things could be different –A different place and role for individuals What can we do to help get there?
Todays world Dominated by institutions –Governmental –Trading –Religious –Educational –Voluntary/NGO We are small in this context
Shocking news: institutions dont exist We pretend that they do; they are convenient Can outlive individuals Can operate on a bigger scale Can own things, employ people Can enshrine principles, or an ethos A major component of the world we live in
Todays most significant institutions Businesses: trading organisations –Manufacturers –Service-providers –Brokers and traders Important for us: –Goods and services –Jobs –Backbone of economy
How most businesses work Todays dominant business model –Companies –Owned by investors –Trade in order to make a return or profit Hugely successful –Invention of Victorian age –The engine of growth for modern economies –Responsible for creating todays world
Investor ownership A success story – but not entirely Disadvantages of investor ownership –Investors are the only owners –Other interest groups excluded (employees, customers, local community) –It benefits investors (private benefit) –It does not trade for the public good Our role: consumers, creating demand, fuelling growth (disempowered)
Investor ownership A problem with the business model, not specific corporations Caveat: there are bad examples of all types The main problems –The model is driven by the pursuit of growth and private gain –Not based on delivering public good –It does not promote equality
Todays world and society Dominated by investor ownership Pursuit of private gain – socially acceptable UK economy built on it Commercial law built on it The pursuit of private gain institutionalised
Growth is a substitute for equality of income. So long as there is growth, there is hope, and that makes large income differentials tolerable. (Henry Wallich, former governor of US Federal Reserve, professor of economics at Yale)
So long as there is growth … But the planet has limited resources … … what worked in the nineteenth century may not work today … … and there is a financial crisis …
Financial crisis Crises and ordeals do not create the problems for us: they simply reveal the problem that we already own. Father Richard Rohr It is obvious that the old order and the ideas that underpinned it are broken … Will Hutton, the Guardian, November 2008
The old order is broken … Many jobs lost, homes repossessed But has anything actually changed? The Stock Market is buoyant Bankers bonuses are back … But the old order is broken
…the ideas that underpinned it … The underpinning idea: investor ownership Many people know that it is unfair, or not working in their sector The planet cannot sustain the unbridled pursuit of growth and private gain It is economically, socially and politically unsustainable But what is the alternative?
The British Mentality Public or private State-owned or privately- owned Nationalisation – 1940s to 1970s Privatisation – 1980s to today (continuing)
The fore-runner to state-ownership There was an alternative way of doing business It was based on self-help, rather than the pursuit of gain It had its origins in the late 18 th /early 19 th century We know it as traditional mutuality
Traditional mutuality Co-operative, friendly and building societies Formed by people in communities Pooled their collective needs to create a sustainable business Self-help, fighting against adversity
The basis of mutuality No investor shareholders – customers were the owners (members) Democratic participation –One member one vote –Those in charge were elected –Accountable to the members Societies traded for a community (social) purpose
How were they funded? Members deposited their money there –No high street financial services –Cash was insecure at home –Enabled people to save –Limited interest paid on capital if sufficient trading surplus
How did they trade? Just like a normal business They had to be profitable to survive The difference: trading surplus was –Used for reserves –Funded activities –Paid back to members in proportion to their trade (the divi)
Why were they successful? People were loyal –To preserve local goods and services (self-help) –To look after their savings It was an efficient business model Driven by self-help, meeting needs, not the pursuit of private gain Self-help worked as a basis for business
The high point – mid 20 th Century Thousands of building societies Friendly societies had about 14 million members Co-operative retail societies accounted for more than 30% of UK retail trade Impact on society?
Why the subsequent decline? –Creation of the Welfare State: many societies swept away –Central taxation replacing self-help –Rise of big PLCs and banks –Decline in quality of mutual management –Demutualisation of building societies –Growing belief in the market –Cultural change: the rise of consumerism
Triumph of consumerism Self-help became irrelevant: –we had become consumers, rather than citizens The culture changed, society changed The end of self-help and mutuality?
Nearly … but not quite 1990 – 2000: Mutuality struggling for survival Currently a revival Mutuality sounds like a good idea Less problems than banks in credit crunch Values and principles now a selling point Return of self-help and mutuality?
A return of self-help and mutuality? Many people have forgotten, or never knew Business people have very little idea –only understand one business model –the market: people are consumers Nothing else would work
In the end, its up to us Citizens Driven by self-interest Investor ownership Profit maximising businesses Driven by mutual interest Consumers Self-help businesses Community/mutual ownership Less fair society More fair society OR
Why we are powerful Our power as individuals is through how we behave as customers, workers and savers The patterns of our economic behaviour determine the society we live in Are we willing to use our economic power –not to get the cheapest deal, the highest pay or best return –but to create a different world?
Using our economic power Many already do through the job they choose How many do so when buying food, insurance, energy, a holiday? How many do so when saving, and financial planning? What could be achieved by self-help today?
What can be achieved today?
What is possible today? Is it possible to move from a greed-based economy to a needs-based economy? Could large businesses today be based on delivering the public good, rather than private gain? No, if we wait for some institution to change things Yes, if we change the way we think and behave Yes, if there is a popular movement for change Is it likely?
The views of (some) economists Ostrom: challenges conventional view that only state or private ownership works Lunn: peoples behaviour does not fit orthodox economic theory De Soto: how to use the savings of the poor – the Mystery of Capital
It depends on us Are people sufficiently concerned? Will we –make do with less –accept inconvenience –pay for change –have less so others can have more? Or is some environmental disaster needed?
We should remember Self-help emerged from adversity, not prosperity Started by ordinary (poor) people, not governments It played a big part in creating the fabric (now crumbling) of civic society and local communities It was the fore-runner to the welfare state, and the concept of public service It needs to play a big part – especially with energy needs If we want a different world, we need to behave differently As citizens, not consumers
Things to do Learn and find out more –Books, articles –Websites Change your behaviour –As customers –As savers –As workers Tell others, campaign, influence people