10 April 2009
The government’s preoccupation with restoring economic growth ignores the negative aspects of such market-based policies. Anna Coote argues it should focus equally on the ‘core economy’ of family, care and community work
Global economic growth is at its lowest level since shortly after the Second World War, and the UK economy is shrinking fast. This will be upmost in Chancellor Alistair Darling's mind when he puts the finishing touches to the 2009 Budget speech. He will be focusing on how to return the economy to growth, assuming that all else will follow.
Although the pressure to return to business as usual is intense, the chancellor would do well to step back and question exactly what it is we are attempting to navigate towards. How will we live together and look after each other in future? Will business as usual get us where we want to be?
Economic growth retains an unbreakable grip on the imaginations of politicians and policy-makers. Yet it isn't a natural phenomenon, nor is it inherently virtuous. Growth can be boosted by war, by heavily polluting industries, by rampant consumerism and even by rising rates of family breakdown, ill health and social disorder. They all require money to be spent, which shows up in the growth figures. This matters right now because ministers are spending money simply to reboot growth, rather than to achieve particular desirable outcomes.
From the outset, growth-based national accounting came with a very big health warning attached. Simon Kuznets – one of the principal economists behind growth theory – was explicit that it did not measure quality of life, and excluded vast parts of the economy where exchanges were not monetary. By this he meant, family, care and community work – the so-called core economy that actually makes society work.
In his important new report, Prosperity without growth, economist Tim Jackson argues that growth in the developed world is unsustainable – we cannot curb carbon emissions and keep global warming within survivable limits if we allow the economy to keep on expanding. We must plan, in other words, for a low-growth, low-carbon future. This has very significant implications for how we live together and look after each other – especially looking beyond the market economy to the public sector and the welfare state. We need to plan for a welfare system that does not rely on the market economy to go on growing to produce more tax revenues to pay for more and better services.
But there are two other economies that have been overlooked: the natural economy, the resources of the planet, and the ‘core’ economy of the human resources that are embedded in the everyday lives of every individual (time, wisdom, experience, energy, knowledge, skills) and in the relationships between them (love, empathy, watchfulness, care, reciprocity, teaching and learning). The potential for growth lies in the core economy. It can flourish if these human assets are recognised, valued, nurtured and supported.
The role of the state must be to harness all three economies – people, planet and markets – so that they work together for social justice. But growing the core economy is a complex proposition. It is not a natural phenomenon, floating freely beyond the reach of public life and paid employment. Nor is it inherently good or right. It is profoundly influenced by the rules, protocols and power relations that emanate from the state and the market. It shapes and sustains social and economic life. Unmanaged, it also reflects and reproduces social inequalities.
Most of its transactions involve women working without wages – a pattern that generates lasting inequalities in job opportunities, income and power between women and men. These are often compounded by age, race, ethnicity and disability.
Time is a main resource in the core economy. Everyone has the same amount of it but some people have a lot more control over how they use their time than others. Some people – mainly women – have low-paid jobs as well as caring responsibilities, so they are poor in terms of time as well as income.
Transactions in the core economy can privilege some people over others (for example, where better-off parents share a car pool to ferry children to after-school activities). Some groups have stronger traditions of self-help and mutual aid than others, although these may go hand-in-hand with values and customs that perpetuate inequalities (such as class-based snobbery, racial prejudice and discrimination against women). It matters a great deal how human resources are strengthened and supported, because how it is done can either exacerbate social inequalities, or help to promote social justice.
Change is needed not just because economic meltdown threatens to drain the welfare system of public funds, but because the system as it stands has inherent weaknesses. State-run public services operate a deficit model, starting from the assumption that people have problems that need to be fixed by professionals and other public service employees. They are poor at preventing needs arising in the first place, and they often disempower the people they are meant to benefit.
A principal mechanism for transforming the welfare system is to introduce co-production into the design and provision of public services. This fosters the principle of equal partnership, changing the dynamic between the public and public service workers, so that they are no longer either ‘providers’ or ‘users’. Instead, people pool different kinds of knowledge and skills, based on lived experience and professional learning, and work together to co-produce wellbeing.
Care banks provide a useful example. This is a co-production model being piloted in some local authorities, where individuals who require social care form a group with others with similar needs and with care workers. Together, they identify what they need and how to help each other, using time as a measure of exchange, with everyone’s time afforded equal value. Care workers act as brokers and facilitators, not just as care-givers. This model acknowledges that everyone has something to offer, brings in new resources in the form of time exchanged, and helps to generate and support social networks.
When people feel valued and have more control over their lives and stronger connections with each other, they are less vulnerable to illbeing, and are more likely to be physically and psychologically well. When people participate actively in defining and meeting their needs, the results are likely to be better than if others just do things for them or to them. So this way of growing the core economy can help to prevent needs arising, achieve better outcomes and help to sustain services over time.
Crucially for the chancellor, efforts to grow the core economy must be underpinned by publicly funded systems of support. Employment policies and working conditions must enable people to combine paid work, caring and co-production in ways that are attractive and rewarding.
And there will need to be stronger investment in local centres that support the activities of voluntary groups and organisations. These will provide meeting rooms, internet access, printing facilities, training and capacity building, access to child care and local exchange schemes, and help to broker connections and bring people together.
Training programmes and professional norms must change too. Public service workers must learn to share power, to treat their 'patients' or 'clients' as equals, respecting their wisdom and experience. Policy-makers across Whitehall – including the Treasury – must acknowledge the importance of time as well as income in meeting human needs, and understand that growing the core economy will involve transferring power to people, allowing more risk-taking and local variation. And instead of expecting to have things done to or for them, 'service users' will find that, with necessary support, they can co-produce their own wellbeing. They might also have to accept that risks are inevitable, that public service workers cannot always be blamed when things go wrong and that services cannot be identical in every locality.
Funds invested in developing co-production will trigger the release of new resources and make services more effective. This will not only insulate us against some of the worst impacts of the current crisis, but leave us better equipped to deal with the challenges of the twenty-first century. Such a good return on investment is not to be sneezed at in these hard times.
