Forging an economy to work for all
Neil McInroy- LGC, 14th November 2008
He is visiting Poland, Portland, USA; Culiacan, Mexico; Coimbatore, India; Haiphong; Vietnam and Yokkaichi, Japan.This blog is written on a return break to Britain.
Before I left the UK for the US and Mexico, I attended and spoke at the northern regeneration summit in Manchester. At this event, the principles and policy of the last 15 years were considered, but in my view not adequately critiqued. There was some critique of property fuelled growth and an over reliance on sectors such as the knowledge economy, but the overall message from the plenary speakers and government ministers, was that we must hold our nerve on the principles which had underlined urban renaissance over the last 15 years.
I am not denying that we have had some renaissance in our northern towns and cities, but this renaissance has not worked for all. Trickle down has not reached some places and people and we are continuing to work beyond the limits of the environment.
Prompted by a growing frustration at the event, I asked a question from the floor to a four person plenary panel, as regard what principles of economic development we should be holding onto and which we should discard in these economic times. Three of the plenary participants answered this question by detailing how existing policy can assist and possible bend - within the present circumstances - in tackling worklessness and the environment.
However one, albeit brief, response, from a government adviser - tasked with looking at the implications of the credit crunch to regeneration - dealt with the notion of principles head on and his response alarmed me. This response indicated that one can only deal with the problems by focussing on the existing tried and tested principles of wealth creation and I detected an implicit belief that economic development was solely about economic growth.
For him “principles good in good times were better in bad times”. This was alarming because these principles in the so called ‘good times’ were not that effective during this period of ‘renaissance’. They failed some people and communities, did very little to address inequality and did not work within environmental limits. So is it not possible that the principles are faulty?
No one should argue against the notion that wealth creation is a good thing. As Peter Mandelson rightly said in his closing comments to the conference we should not lose faith in the power of enterprise and wealth creation. I agree, we should not lose faith, but wealth creation needs to be more heavily directed to positive social and environmental ends.
The present context gives us an opportunity to think again about this principle of wealth creation for wealth creations sake. Previous polices have done a fair job. They get a pass mark. However, we have not got it completely right. In the present circumstances should we not grab the opportunity to rethink some of these principles? For instance what would wealth creation within environmental limits, with a stronger strain of social justice look like?
Lessons from our research work on resilience to date tell us three key principles about local economic success and how to couple it to social and environmental justice.
- Economic growth should be viewed as a means to an end NOT an end in itself.
- Economic growth and wealth creation, if left to the market alone is spatially and socially unfair and environmentally damaging - thus it needs to work within environmental limits and its fruits be put toward social progression and fairness.
- Local Authorities must have fiscal powers to take charge of local economics and bend local economic growth and wealth creation and create strategies which blend growth, non growth and neutral growth.
We must not waste this opportunity. It is at this time - more than any other in recent years- where we have an unique opportunity to have a debate and forge an economy that works for the environment and for all.
Available on the LGC website- click here.
