Sunday, 14 August 2011


The riots and looting in the UK has raised a number of issues. Many commentators seem to be jumping to conclusions about the cause and proposing solutions or penalties based on those assumptions.

One assumption is that these are people who are on the benefit so the solution or penalty is to remove their benefit. But wait what is this really saying? The implication that I get is that these people shouldn't be on the benefit because there is work out there. They are just too lazy to find it. This is a major generalisation. Some on the benefit may be making little effort to look for employment but there are a lot more who are and are not able to find work. It is easy to target those at the bottom of the heap and blame them for the situation that they find themselves. The other implication particularly of the proposed penalty is that taking it away will force these people to face up to their actions and become part of a working society. More likely, I suspect that the removal of the benefit will cause greater poverty and inequality possibly leading to further crime and ultimately prison where the law-abiding tax payer will continue to pay for their costs while the person continues to develop hatred and resentment for society. So if the rioters are beneficiaries, removing the benefit isn't going to resolve the situation. An alternative solution is required.

However, the evidence coming from the court cases is that a reasonable number of these rioters have jobs. The are not dependent on benefits to live but probably will be after sentence is passed. They are likely to lose their jobs and find it difficult to obtain new jobs. They have incurred a black mark on their character that is likely to put them in the ranks of the unemployed and possibly unemployable. So why did these supposedly respectable people decide to act so destructively against the rest of society?
The New Economics Foundation published an article headlined “London can't afford to ignore inequality any longer” (Whitehead 2011). Research seems to show that unequal societies have more riots and looting. If this perspective is true then society as a whole needs to address issues that lead to inequality. The Equality Trust has a lot to say on this issue backed by research.

Another article that caught my attention was in “The Independent” entitled “Caring costs – but so do riots” (Batmanghelidjh: 2011). The trust of this article is that “These rioters feel they don't actually belong to the community. For years, they’ve felt cut adrift from society.” This perspective says that because the rioters do not feel a part of the community they are able to be brutal against what seems to others to be their own community. They have lost any sense of responsibility for the community and society. Destroying what others might see as important is just a act coming from their frustration and sense of being disconnected.

Both of these articles suggest some underlying issues that may need to be addressed although like the argument to throw people of the benefits, these articles cover all the reasons why people joint the riots and looting. What they do point to is that we need to understand the ills in our society and address them.

But I want to remain a little with the idea of lose of identity with and in society and turn again to look at the focus of our economic system. I have frequently talked about the economic system needing to have a change of focus and put more central the needs of people and the environment. In the current economic climate, all the focus is going on reducing debt but the foundation of the economic system is the expansion of debt and the growth of the economy. As long as there is borrowing with interest, there is no way for the system to ever clear the debt. What we see with countries that are struggling with debt are packages designed to restructure their debt and not to reduce it.

There seems to be an assumption that every nation and economic unit can make a profit but the reality is that exports have to equal imports or production has to equal consumption. There isn't anything magical or difficult in this statement. It is simply that if export or production around the world exceeds imports or consumption then the system is producing for waste. Not surprisingly, the cost of the wastage has to covered in the cost of consumption which if we disallow borrowing means that we can even afford less of what is produced putting the system into a downward spiral of not being able to buy what is being produced.

The solution seems to be to borrow against future income. Ignoring interest for the moment, this means that we buy today's production based on income that we expect to get from tomorrow's production. For the loan to be repaid, that means that some of tomorrow's production must remain unpurchased or we must continue to borrow against future income from production. Add on interest to the equation and the amount of debt required to maintain consumption of today's production simply grows.

In his crash course in economics, Martenson argues that we are looking at exponential growth in debt that can only be satisfied if there is exponential growth in production. When this fails to be the case then we have to expect the system to collapse. Martenson also talks of an energy economy where he highlights the the growing amount of energy required to extract a unit of energy. He contends that some energy sources are simply uneconomical because we are consuming a unit of energy in order to extract a unit of energy but I will leave you to read or listen to his material.

How do we overcome the problems? Possibly through sustainable communities. Daly and Codd (1989) review some research which looks at the impact of export-led economies. As I write this, I realise that this is exactly what my household is. I am dependent on the income that I obtain from exporting my labour and production in order to live. The difference between me and the cases that Daly and Cobb refer to is that the export-led economies tend to deplete the resources that the society is dependent on for survival and for generating their export income. In other words, the economy is not sustainable.

How does this relate to the rioting and looting? Export-led economies is what we all live under and we are approaching the point where they are no longer sustainable. As Martenson argues, we are running out of resources that are cheap and efficiently obtained. We are depleting the resources that we need for survival.

All this sounds quite negative and it would seem that we should expect things to get worse rather than better. There is a solution and it focuses on sustainable communities. Daly and Cobb quote from Thomas Michael Power (1988) who says “development policy should concentrate on things people really want rather than some abstract description of the economic process. What do people really want? Power offers the following list of goals for local development policy: (1) the availability of satisfying and useful work for members of the community; (2) security for members of the community in access to biological and social necessities; (3) stability in the community; (4) access to the qualities that make life varied, stimulating, and satisfying; and (5) a thriving, vital community” (Daly and Cobb, 1989, p 135).

It would seem that a sense of belonging to a community and ensuring the survival of the community should be central to our economic planning. It is also crucial for ensuring that we do not have a repeat of the riots that the UK has experienced.


Batmanghelidjh, C. (2011, 9 August). Caring costs – but so do riots, The Independent. Retrieved 14 August, 2011, from

Daly, H. E., & Cobb Jr., J. B. (1989). For the common good: Redirecting the economy towards community, the environment and a sustainable future. London: Green Print.

Equality Trust. Retrieved 14 August, 2011, from

Martenson, C. (2006-2011). The Crash Course Retrieved July, 2011, from

Power, T. M. (1988). The economic pursuit of quality. Armonk, NY: Sharp.

Whitehead, S. (2011, 9 August). London can’t afford to ignore inequality any longer. new economics foundation: a tumblelog Retrieved 14 August, 2011, from

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