Saturday, 25 March 2017

Economic Principles

As I reflected on King's (2012) sermon Paul's letter to American Christians” (pp 141-150), I began to reflect on the meaning of the neo-liberal principles and the progressive principles that we have developed with a group of others here in Birmingham, UK.

The principles are:

Neo-Liberal PrinciplesProgressive Principles
Free marketsEnabling potential
Small StateSustainable environment
Low taxEqual society
Individual LibertyParticipatory democracy
Big defenceAn economy for the common good

In this blog, I am going to look at these principles and how I interpret their meaning. On the way, I will look at alternative wordings and the criticisms that I have of these alternatives.

Free Markets

The first neo-liberal principle is free markets. The emphasis of criticism of this principle often focuses on “free” and its interpretation. As a result, people talk of regulated markets as the opposite to free markets. Free markets in my view isn't about equality, equity, or the meeting of needs. Free markets are about the powerful and wealthy being able to exploit the weak and poor for their own gain. Free markets might work if the playing field was even and all were able to compete on equal terms. The reality is that those with the resources or access to the resources have the advantage and can dominate the market.

The alternative proposal of regulated markets is aimed at trying to reduce the exploitation. It is argued if the markets are regulated then you restrict the exploitation and endeavour to balance the economic harm of the markets.

This raises my real concern. The debate shouldn't be about free verses regulated or some other form of market. We should be asking whether markets is the best way to organise our interaction with each other. Markets are not about meeting needs or satisfying needs. Markets are about protecting one's self-interest supposedly while meeting a need (market demand) of society. The market requires that I sell my services or produce in order to meet my needs. What happens when the service or product that I supply becomes redundant. Anyone who has looked at history and especially family histories will come across stories where a family was prosperous because the income earner offered a service that was in high demand. Then as new technologies were developed, their service or skill was no longer required. In a very short time, they went from self sufficient to living in the poor house. The market says they should have retrained and adapted to the needs of the market but is that always possible.

Here I share something from my own experience. In 1990, after entering the computing industry through studying computer science in the early 1970's, the computing industry began to use smaller equipment. I learnt on machines that were called mainframes although in reality they had less memory, disk capacity, and processing power than any current personal computer and smart phone. I had seen these machines grow in capacity and processing capability over that nearly twenty year period. In the early 1980's, the PC became a viable tool and the mainframe and mini computer (yes, there was another reduction in size from the mainframe before the PC and I had transitioned that change) but in 1990 when I looked to change jobs and move into what I saw as the new direction of computing, I was told categorically by an employment agent that I would never be able to program these new PCs. In his view, I was a mainframe programmer and would never understand the demands of programming a PC. In his view, I was now redundant and should expect to scrape for an existence and never expect to receive the rewards of the new market for programmers that was represented by PCs.

Let me add a little more context. I learnt my programming skills using punch cards on a machine that could only run one program at a time. That moved to a mini-computer system that had a terminal attached (printed output and keyboard input). My first programming job saw me use early terminals and work in an environment where we were implementing the first network of terminals. That saw me develop an early build system to address issues of sharing code with others from a central repository of code. It also saw me working with low level network protocols and moving from networks where each terminal device was connected by its own cable to the computer to networks where the devices shared a cable and had a unique address. I also worked with some of the early network controllers that would manage small networks of terminals and that interacted with the mainframe. We had to understand what happened when a network connection failed and how to restore process as though no network failure had occurred when the network was restored. I had also been involved in the early PC based bulletin board networks called Fidonet and the transition to the initial public release of the Internet. To be told that my personal learning was irrelevant and that only my work history on mainframes was relevant to job seeking showed to me what markets are about. Markets can throw people on the scrap heap. They have no concern for the individual. They are based on supply and demand.

I don't believe that supply and demand is a sound basis for organising the interaction between individuals and ensuring an equitable distribution of resources. However, this is the foundation of a market philosophy. As I write this, we see in the UK, education taking on this market philosophy supposedly as a way of improving education. Schools now advertise their rating as a way of drawing customers (sorry pupils). Universities are now rated so that customers (students) can decide which university provides the best educational opportunities. Educational success is measured in the pay pack and not the ability to solve the real problems of life and society. Research is becoming about what can earn funding and not about what is important to improve life, educational outcomes, etc.

Yes, I am possibly over emphasising the negatives but lets take a look at what markets actually do. The market forces a company to compete but not just to compete. It forces companies to produce new products regardless of the demand because they need to keep selling to survive. Technology companies are not interested in longevity of their products or recycling since that would work against profitability, a key requirement of a market driven economy. Marketing moves form helping people to be aware of the options that are available to meet their needs to generating a demand for something that people really do not need. Waste becomes a necessity and an unwanted byproduct. Industries are developed that deliver nothing of value except meaningless jobs since people must earn an income. Technology wise, the quality of life seems to improve but the real quality of life declines as mental health deteriorates and stress levels increase through dependence on meaningless work.

So why do we want markets? We want markets as a way of meeting needs but we have lost sight of the needs and focused on the return on investment, the personal profit, the personal gain. Satisfying needs has to become the priority and not the market. Education has to focus on quality of life and not conformance to a system that enslaves people to work. So what would be a better principle? Need fulfilment? Gift economy? That is a big shift in thinking.

Small State

The argument for small state comes from the view that a large state infringes on the market and anything that infringes on the market is bad. Markets in theory should be self balancing. The supply and demand curve should ensure that redundant markets vanish and only what is really needed continues to thrive. State is about control and intrusion, It isn't seen as ensuring that there is fairness in the distribution of resources. In my very cynical view, a small state means reducing regulation so that the wealthy and powerful are not restricted in their exploitation of the weak and poor.

I am not particularly keen on regulation and large state but I don't want markets to dominate the interaction between people. If a larger state is what we have to pay for to ensure greater equity in our market operations then I support a big state but are there other options based on local sustainable communities and relationship building? Is it possible that like the market driven economy, we have lost sight of the local relationships that controlled exploitation and ensured equitable distribution of a community's resources? The question shouldn't be about the size of the state. The question should be about how we ensure equitable distribution and how we ensure that we are living a sustainable lifestyle in relation to each other and the environment in which we live.

If small state helps bring about cooperative communities, sustainable communities, and sustainable environment then I vote for small state but if it simply means the increasing of wealth for the few then I vote for large state and regulation. Let us make sure that we have the right focus.

Low Tax

Low tax is a natural outcome of the small state but it is also about maximising the return for self and not the community. There is another element here of small state and low taxes that is not immediately obvious. This is about who controls the money supply. We could have low taxes with a large state if we did not leave the money supply in the hands of private banks (Jackson & Dyson, 2012; Jackson, 2013).

I would go further and argue that money is part of the problem because it is about accounting for our transactions so that I can ensure that I come out of a transaction better off than you. What would happen if our method of accounting for transactions was based on whether needs were satisfied and the environment was cared for? Would we need taxes or would we all be thinking about how we cared for the things that we pay taxes to get the government to care for (i.e. waste disposal, transport infrastructure, …)? If our focus is incorrect then we get the wrong outcomes and at a cost that exceeds what is possible.

So what is my alternative to low tax? Similar to small state, I am thinking in terms of relationship building, local empowering, empowered communities, or maybe as the progressive principles say “participatory democracy” although I see that terminology hiding the underlying principle of relationship building.

Individual Liberty

This is about me being able to do as I want without interference from you. From the perspective of neo-liberalism, it is about ensuring that nothing blocks my ability to profit and store up treasures for myself at the expense of all others. This completely contradicts any concept of recognising the relational nature of communities and the strengths of working together.

We used to use an idea about privileges and responsibilities, and actions and consequences when doing inductions at an educational institute that I worked for.


We purposely talked of privileges rather than rights. To claim a right is to claim something for self. To claim a privilege is to recognise what society has made available to me. However, claiming a privilege carried with responsibilities back to the community that provided the privilege. This helped us recognise our responsibility to others and that we are part of a community and not simply individuals seeking our own survival. The second part simply recognised that out actions carried consequences not simply for ourselves but for the community that we were a part of.

Individual liberty degrades this understanding of being part of a wider community, of sharing in the benefits that the community offers, taking on the responsibilities to maintain that community, to act responsibly with the community in mind recognising the consequences of our actions.

However, I want to go further. Our responsibility includes helping others fulfil their potential. Our lives are not solely about us. Our lives are about others and what they can achieve. There has to be a balance between our own privileges and the privileges or opportunities that we help make available to others.

Big Defence

To me, it is a contradiction to talk about small state and big defence but big defence is the consequence of the keeping for self that these neo-liberal principles promote. Big defence is about security and in particular that element of security that focuses on keeping what I have for myself. If you lack equality then you need defence to ensure that you keep that advantage. Defence is about giving some the feeling of being a part of something bigger while using them to protect something that they have no access to.

In a military campaign, it isn't the politicians or the military strategists that are putting themselves at risk. It is the lowly soldier who we claim as heroes that put themselves at risk at the command of people who to a large extent are focused on maintaining their position of superiority.

Peace is not achieved and never has been achieved by military force. Peace is achieved by understanding the issues that separate us and the wrongs that we have done to each other. It is about being willing to repent of the things that we have done against others and the environment and work toward restoring a positive relationship. It is my belief that if we were to focus on peace-building rather than defence, we would require smaller defence and we would have stronger relationships. As long as we are focused on keeping out and maintaining our advantage then we will need big defence.

Again, I am arguing for a paradigm shift in our focus. Security doesn't come through big defence or walls and partitions. Security comes through building relationships and breaking down the barriers. Security comes through building a more equal society, by working to help others achieve what they are capable of, by focusing on the common good, and not what we can achieve for ourselves.

Enabling potential

For me, this is about seeing what others are capable of and helping them to reach that potential. It isn't about conforming them to society but helping them see how the gifts they have been given benefit society and how in the process of working with others, their gifts are maximised and they can help others maximise their gifts.

From an educational perspective, this is a moving away from regimented, over assessed learning, to a focus on building the individual strengths and overcome weaknesses. Enabling potential is relational and not individual. It is recognising that we are part of a whole.

Sustainable environment

Enabling potential also is about enabling our environment to be what it should be and not about extracting all that we can from it. However, enabling potential isn't enough. We must learn to live in sustainable ways and not by maximum exploitation. For free markets, everything is there to be exploited. For sustainability, needs become important and the focus shift from what we can extract to what we need and what others and the environment need.

Equal society

Evidence suggest that more equal societies have less crime, require less defence, and are healthier environments in which to live.

Participatory democracy

To some extent, I have some negative feelings about this principle. Democracy is a decision making process but it is one that favours the majority over the minority. Often however, in a democracy, the so called majority is the majority of a minority that bothered to participate in the process. Participation can only be guaranteed where people feel part of the decision making process, where they feel they are being heard and that their concerns are being meet. This comes through relationship building and not voting processes. I would prefer consensus rather than democracy and relationship building rather than participation. However, we need a start in a process of moving away from the individualism of neo-liberal principles and participatory democracy provides a starting point. I simply hope that it isn't the end point.

An economy for the common good

I have no problems with the idea of working for the common good and see that as a key part of relationship building. However, economy is a throw back to concepts of markets and accounting for exchanges. If you follow some of my critique of the neo-liberal principles then you will realise that I am not in favour of balancing transaction but I am interested in balancing outcomes (i.e. equality or equity). If economy for the common good means equality and equitable transactions then I am in favour but if the accounting processes remain as they are favour maximisation of return for the individual or corporate then I am not in favour.

Peace-building principles

One of the difficulties for me in the process of developing the “positive principles” was and is our long held perspectives or views, what some would call framing stories. We strongly believe in economic transactions, of paying our way, of contributing to society, of being secure, etc. These deep seated convictions influenced the outcome of our process but I am not feeling disenfranchised simply because the wording isn't what I would desire. The principles give me a framework for challenging the current neo-liberal framework with an alternative that to a large extent, I know others support. That doesn't stop me pushing further toward what I call peace-building or relational principles. I hope that you have see these as I have critiqued the neo-liberal and progressive principles.

How would I word what I see as peace-building principles. At the top of my list is relationship building. King's (2012) book and I believe the Christian bible would place this emphasis on peace-building through brotherly love. The second principle is helping people understand alternative perspectives. This doesn't start by stating our views but starts by understanding where we are in our journey and where others are in their journey, and through sharing openly with each other seeking to understand our different perspectives. I believe that it is a gradual process to change our framing story. Vygotsky (1978, 1986) called it a zone of proximal development. We are open to accept ideas that are within a zone of our current understanding. As our understanding broadens so does that zone. Education has to work with that zone for each learner as an individual but not to indoctrinate them as a lot of current education tends to do but to open them up to other alternatives and to be able to reason about those alternatives.

My third principle is to empower and support nonviolent organisations. This means working for unity and shared understanding. It also means work for equitable outcomes. Equality often isn't what is required. What is need is to support each individual according to their needs and to where they are right now. We don't treat a child as an adult and we shouldn't treat all individuals as though they were identical with identical needs and requirements.

My final principle is building nonviolent solutions. A nonviolent solution will be based on relationship building and greater equality.

When I reflect on society, I want to see a change in the way that we interact with each other but I also want the tools and environment to be able to show others ways of thinking and doing things that bring greater empowering and enabling. My principles don't talk about enabling potential but if I am building a relationship with you then I want you to feel positive about your contribution and what you are achieving. I can only do that if I am giving you space to use the talents and skills that you have been given. Sustainability and equality flow from relationship. Participation in decision making occurs when you feel that you have a voice, and the common good becomes our focus when we are focused on relationship and not our individual needs.

For me, our path forward is through relationship building.


King Jr., M. L. (2012). Paul's letter to American Christians A gift of love: Sermons from Strength to Love (1963) and other preachings (pp. 141-150). Boston, Massachusetts: Beacon Press.

Jackson, A. (2013). Sovereign Money: Paving the way for a sustainable recovery. London: Positive Money.

Jackson, A., & Dyson, B. (2012). Modernising money: Why our monetary system is broken and how it can be fixed. London: Positive Money.

Vygotsky, L. S. (1978). Mind in society: The development of higher psychological processes. In M. Cole, V. John-Steiner, S. Scribner, & E. Soberman (Eds.). Cambridge, MA: Harvard University Press.

Vygotsky, L. S. (1986). Thought and language (A. Kozulin, Trans.). Cambridge, MA: The MIT Press.