Can "the Foundational Economy" help Social Democracy?

Social democratic parties are in deep trouble in most of Europe – they’ve become tainted with neoliberalism and ambition and have forgotten their roots. Keir Starmer may have been the Leader of the English Labour party for almost three years but has made little impact. The party may be enjoying a 20% lead in the polls but that is basically down to the total mess Conservative governments have made of things - not just since the June 2016 Brexit referendum but since the austerity Cameron and Osborne imposed on the nation in 2010. That’s 13 years of suffering for those on low and insecure income (about 15% of the British population). And the last 12 months have been particularly cruel for such people as energy and food prices have soared.

The Labour party’s 2017 Manifesto, developed under Jeremy Corbyn, was very popular – not least for its commitments to bring privatised industries back into public ownership and had been underpinned by this earlier report on Alternative Models of Ownership. But Corbyn’s leadership was under constant attack by both the mainstream media and the majority of the parliamentary Labour Party and the party crashed in December 2019 to its worst defeat since the 1930s – losing almost 50 seats in the north of England which had been Labour for almost a century (but which had voted for Brexit).

Starmer (unlike Corbyn) had been on the Remain side of the argument and, on Corbyn’s resignation, clothed himself in respectable leftist garments for his campaign for the leadership which were discarded quickly on his victory.

In 2018 Rachel Reeves (who became in 2021 the party’s Shadow Minister of Finance) published a significant 66 page pamphlet entitled “The Everyday Economy” and the “Political Quarterly” ran a short but well-referenced article about it, leading to a further series of articles in the journal in 2022. Surfing has unearthed quite a collection of articles and pamphlets about the concept which was developed a decade ago by the Foundational Economy Collective people at Manchester University whose working papers can be accessed here. Reeves meant three things by the term -

• “First, work and wages. People need more control in their workplace, stronger rights to collective bargaining, higher wages, and investment in technological innovation and skills.

• Second, families and households. Austerity, low wages and the burdens of care are putting millions of families under pressure. We need to protect services that support families and do much more to eradicate child poverty, which is rising.

• Britain is one of the most centralised countries in Europe. We must devolve decision making, resources and tax-raising powers to cities, towns and counties. Involving local communities and their insights will lead to better policy, and more responsive and cost-effective public services”.

But that was some years ago. Keir Starmer has now upped the ante in a series of announcements about Labour party policy culminating in “Mission Economy” which is as technocratic statement of commitment to economic growth as you are likely to see – with the prints of Mariana Mazzucatu all over it.

The question is how on earth this can be squared with the very different approach embedded in the discourse about the “Everyday/Foundational economy”? In such diverse places as Barcelona, Wales, Scotland and Manchester, experiments have been underway in the past few years – often with the help of the Centre for Local Economic Strategies (CLES), to embed this more localist approach which runs so counter to neoliberalism

The foundational approach differs from the “productive economy” approach which has dominated centre-left (and centre-right) politics in the UK and elsewhere since the late 1940s. It’s focus is on the possibility and necessity of local initiative in a foundational politics which breaks down the established distinction between economic and social policy.

Senior figures in the UK Labour party have been searching for a narrative based on shared values or national identity – but an electorally credible narrative has to be based on the deliberative and performative basis of successful local initiative. So that the social democratic offer becomes “trust us to do more of what we have already done to deliver a future that works for you”.

We have feminism to thank for this – it was 1996 when the feminist collective Gibson-Graham published The End of Capitalism (as we knew it), a much-neglected classic which set in motion a way of looking at economics which has clearly inspired such authors as Kate Rawarth and Ann Pettifor. It was followed by 2 further books, one of which occupies the first place in the table below.

I appreciate readers will not be used to such a table – but it’s there simply to dip into. There’s only one book – the rest of the material being articles and pamphlets with the number of pages clearly marked.

A Resource on the Foundational Economy (in chronological order)

Title	The Takeaway
"Take Back the Economy – an ethical guide to transforming our communities” Gibson-Graham et al (2013)	Nothing less than a total rethink of the economics discipline. Superbly written and presented – using graphs and tables The link in the title accesses the entire book
Manifesto for the Foundation Economy (2013)	The Centre for Research into Socio-Cultural Change (CRESC) of Man University is well-known for the originality of its work. Here it argues for a new kind of intervention which would challenge public and private business models that privilege least cost and most profit and neglect the preconditions of national, regional and local economic security and social sustainability (23 pages).
Forging a Good Local Society; Neil McIntosh (2016)	McIntosh was for many years the Head for the Centre for Local Economic Strategies (CLES) which helped local authorities. This is a superb reflection on the value locally-based strategies can bring to national efforts (56 pages)
Labour’s Lost Tribe – winning back the working class (2018)	A useful political assessment of the dilemmas the Labour party faced in the UK - particularly in Corbyn times (11 pages)
The Foundational economy – infrastructure (2018)	The concept has attracted Europe-wide interest. This is an excellent article from an Italian sociological journal which puts the debate in the wider European context and argues that FE helps the defence and management of the local commons (30 pages)
Everyday Socialism (Fabian 2019)	One of the best overviews – at 100 pages. This is the must-read paper which will be needed for future referencing
Debating the Foundational Economy (Renewal 2019)	An excellent short discussion of the concept – with many concrete examples (8 pages)
Everyday Work R Reeves and M Reader (GMB 2019)	A useful update of her 2018 NEF paper whose rights she has sold to Scribd which charges a monthly fee (shame on her!!) 48 pages
Building the Good Society; Neal Lawson (2020)	A short look back at a decade of left-wing developments by a stalwart who tells truth to power
After the Pandemic - experimental governance and the foundational economy (Symphonya 2021)	The pandemic inspired hopes that the value of essential workers such as nurses and supermarket workers would be placed above those of financiers……(6 pages)
The Foundational Economy as social-ecological transformation (Vienna 2021)	A good feminist and ecological overview of the field (19 pages)
Placing the Foundational Economy B Russell et l Stafford Uni 2022	The best literature review – although it suffers somewhat from academic jargon (18 pages)

Snippets

Snippets

I have three very talented daughters – two with a design inclination and one a General Practice medic who combines that with teaching medical students in Edinburgh. So this post is for all of them. Although the focus this time is mainly medical, I will deal with design in a future post

1. Photos of Scotland in the 1930s. A woman GP on the Hebrides took these wonderful photos which can currently be viewed at an exhibition in Edinburgh. 

2. The European Union has just developed a new partnership on health with the World Health Organisation. WHO has come in for some criticism recently but I have to say that I have a lot of respect for it – having seen it at close quarters for 6 months in 1990/91 when I was invited to help the head of its European Division of Public Health develop a strategy for central europe. I have never seen such a lean and effective organisational system – with one person, a secretary and a small budget dealing very effectively with, respectively, drugs, smoking, maternity and healthy cities

3. Lea Ypi has been making quite an impact with her recent book on Free – coming of age at the end of history which recounts – through the various members of her family – the diverse ways in which they interpreted what was happening to their society before and after 1989. French TV had this lovely documentary of her revisiting her family home in Albania

4. Martin Wolf has a more interesting background than you might imagine from his sobriquet as lead financial journalist at the Financial Times – his family having fled from Nazi Austria. After an initial stint at the World Bank where he became disillusioned with McNamara’s policies, he fell under the influence of Hayekian thinking and wrote positively about globalisation. His latest book “The Crisis of Democratic Capitalism” warns against the “UK creep toward authoritarianism“ which he explores in this great interview

5. Dr John Campbell. This guy has been the daily voice of reason on Youtube for the past 3 years on Covid and ran very useful tutorials on health topics for years before – although the Wikipedia link throws some doubt on some of his claims. I began to worry about his judgement when he appeared on the Neil Oliver show a month ago. Oliver was a bit of a Scottish historian but has become a rabid conspiracy theorist in the past couple of years - and Campbell was most ill-advised to appear on the programme.

This broadcast on depression is a welcome break from his fixation on Covid which encouraged me to upload to his site (which attracts some 5000 mainly US comments a day!) a link to Johann Hari's great book on Lost Connections

6. Saying Goodbye; A friend of mine lost his wife recently. It was the end of Alastair Campbell’s most recent The Rest is Politics which reminded me of Jacques Brel’s powerful “Do not Leave me”

Why "Class" still matters

Perhaps my question whether the PMC notion is a useful one was not the right one. Perhaps the more appropriate question is whether it matters - does it change anything? I've just done a Ngram on "class" - to discover that (in the English-speaking world at least) its use peaked in 1914 but stayed reasonably high until dropping significantly after 2000 and is now at the levels last used in 1860!! Use of "Working class" peaked in 1970 and is now at 1955 level with references to the "ruling class" being fairly similar. But the notion of there being a "professional - managerial class" seems confirmed – there being almost no of the term until 1966 and then a huge rise peaking in 1997 but still holding up. And it was a new phrase for me – but one that made sense given the increased awareness of the blight of managerialism which has been evident in posts over the past decade.

My initial thought is that class DOES matter – I’ve been floundering in the attempts I’ve been making since 2000 to make sense of what seems to be a new system of capitalism – with the decline of industry and financial services and monopoly rents (in the sidest sense of that word) now making the running. We all know that inequality is at obscene levels which have rarely been experienced – but the world seems just to accept that.

I’ve now downloaded various books and articles on the subject of CLASS – most of which I find tortuous and unreadable. Most of the writing is by sociologists such as Ralf Dahrendorf (much more accessible), John Goldthorpe, Ray Pahl, Goran Therborn, John Westergaard and Erik Olin Wright. One of few readable (and mercifully short) pieces was Therborn’s tribute to the life and work of EO Wright. And Therborn’s New Left Review articles – such as here and here – are highly readable presumably because of the high editorial discipline NLR imposes. But I simply don’t have the patience to wade through the 30 pages of Jakovich’s 2014 paper on The Concept of Class or even the 21 pages of Goldthorpe's 1992 The Promising Future of Class Analysis.

This Swiss economic sociologist's Contemporary class analysis (EC 2022) for me cut through the guff with his blistering 27 pages critique of some of the nonsense recently produced by economists on the subject. The last decade has seen a lot of talk about the "squeezing of the middle-class" and the purpose of Daniel Oesch's paper – commissioned by the EC – is to demonstrate that it is the working-class which has suffered the decline. Although noone knows how AI will in the future impact the middle-class, some dire predictions have been made about the scale of its impact on many traditional professions - with only those in the "personal care" system likely to benefit. 

So noone can really anticipate how our social structures will develop and how wealth will be distributed- about the only thing I can say is that

• "middle class" has little meaning – it's vasically an aspiration

• PMC is also vague – straddling those who command both deference and power

• working class power seems suddenly to be alive and kicking - with the "public" amazingly supportive

Gluttons for punishment might look at a couple of books about "class"

• Approaches to Class Analysis ed by Erik Olin Wright (2005) - probably the best on offer with each chapter being written from a different perspective – whether neo-Marxist, neo-Weberian, neo-Durkeimian, Bourdieu, "post-class" or Wright's synthesis

• Anthropologies of Class – power, practice and inequality ed by Carrier and Kalb (2015) a collection of anthropological essays on the subject which I suspect might offer more insights than the sociological?

UPDATE; Have just read a fascinating article in the current NPlus by Gabriel Winant - the Professional-Managerial Chasm which contains this superb quote from EP Thompson

Sociologists who have stopped the time-machine and, with a good deal of conceptual huffing and puffing, have gone down to the engine room to look, tell us that nowhere at all have they been able to locate and classify a class. They can only find a multitude of people with different occupations, incomes, status-hierarchies, and the rest. Of course they are right, since class is not this or that part of the machine, but the way the machine works once it is set in motion—not this and that interest, but the friction of interests—the movement itself, the heat, the thundering noise. Class is a social and cultural formation (often finding institutional expression) which cannot be defined abstractly, or in isolation, but only in terms of relationship with other classes; and, ultimately, the definition can only be made in the medium of time—that is, action and reaction, change and conflict. When we speak of a class we are thinking of a very loosely defined body of people who share the same congeries of interests, social experiences, traditions and value-system, who have a disposition to behave as a class, to define themselves in their actions and in their consciousness in relation to other groups of people in class ways. But class itself is not a thing, it is a happening.

Is the notion of a professional-managerial class (PMC) a useful one?

George Kerevan I know as a leftist Scottish economist and nationalist politician in whose tribute to Tom Nairn on the excellent Conter site - Tom Nairn – globalisation and the new middle class - I found this intriguing passage

“The last few decades saw the incorporation of China into the global market and the final victory of commodity production as a world system. But the failure to replace capitalism historically has resulted in a massive excess of surplus value that cannot find investment outlets. One result is the emergence of a super layer of unessential functionaries, pseudo managers, financial service employees, academics and pampered cultural workers, otherwise known as the New Petty Bourgeois or the New Professional Middle Class.

This parasitical layer is funded by the excess surplus value the global capitalist system cannot use productively, hence its massive growth in numbers in the West. At one end (eg computer programmers and IT engineers) it clearly merges into the proletariat. And at the upper end (financial executives) it is clearly bourgeois. But in the mass, this group has all the unstable characteristics of any middle social layer: individualistic, narcissistic and devious.

In Scotland the rise of modern nationalism stems from the 1970s and was (crudely) a working class response to regional economic decay and the failure of the Labour Party to do anything about it. As a result, the SNP has become politically hegemonic. But this very hegemony – including the SNP’s total domination of the local state and civil institutions – has now attracted the attention of the New Petty Bourgeois. Effectively, this social layer has colonised the SNP and the Scottish national movement, serving to align independence with neoliberal values and policies – including uncritical support for EU membership, economic policies fixated on supporting foreign capital, and an emphasis on personal identity politics.

My understanding of class is, I grant you, quite rudimentary.

• I know that there are owners (the “ruling class”), workers and managers

• that Marx assumed a state of bitter conflict between owners and workers

• that the German marxist theory of scientific socialism led to fatalism

• Berle and Means set off in the 1930s a profound debate about managers beginning to get the upper hand over owners

• which persuaded “revisionists” such a Anthony Crosland in the UK in 1956 that capitalism had reformed itself

• but that in the late 1970s Milton Friedmann’s espousal of “shareholder value” transformed thinking dramatically about the purpose of the company

• with senior managers often becoming owners

• and the development of services and of “financialisation” altering the very nature of the economy

I had been transfixed in the early 1990s by John Ralston Saul’s Voltaire’s Bastards – the Dictatorship of Reason in the West which argued that figures such as Robert McNamara (of Ford, Vietnam, World Bank infamy) revealed the evil embedded in what we knew as western civilisation. But the book somehow seemed too far-fetched to make the necessary connections in my mind to the real world. But I’ll readily confess that I’ve been floundering in the attempts I’ve been making since 2000 to make sense of the new system of capitalism.

Kerevan’s article persuaded me to google the phrase “professional-managerial class” which unearthed a fascinating if motley crew – Barbara Ehrenreich, David Graeber, Chris Hedges, Ralson Saul and Sheldon Wolin. Ehrenreich seems to have been the first to use the phrase – as far back as 1977 which “Dissent” wrote about recently but which hyperlink doesn’t allow me to access https://www.dissentmagazine.org/online_articles/on-the-origins-of-the-professional-managerial-class-an-interview-with-barbara-ehrenreich. But it’s the first half of David Graeber’s short 2014 essay Rise of the professional-managerial class which made the most sense to me when I read it yesterday

Job security made it easier for all employees to identify with the company. As a result, both workers and management tended to see financiers and financial interests as outsiders, even interlopers. In the 1970s and 1980s, all this began to change, and the upper echelons essentially shifted their allegiances and realigned with the financial classes. The notorious boom in mergers and acquisitions, and asset-stripping, and the like, so widely remarked on at the time, the abandonment of former guarantees of lifetime employment, the use of stock options to pay executives and increasingly even skilled workers, were all manifestations of this shift of allegiances. But in fact it ran deeper. During this period, financial elites and corporate bureaucrats essentially merged: the two classes began to intermarry; their careers tended to move back and forth between the different sectors; they came to speak the same language, share the same tastes, and see the world in identical terms. This gradually had profound cultural effects, at first in North Atlantic countries, and then among wealthy countries everywhere. Here I will just single out two.

First, it seems to me that the profound bureaucratization of almost every aspect of social life that has marked the neoliberal era (see The Utopia of Rules 2015) - a bureaucracy in which it is increasingly difficult to even distinguish public and private elements - really traces back to this period.

Second, the political dominance of this new financial-bureaucratic class was cemented by bringing on board large sectors of the middle classes (the professionals and managers again: essentially, by encouraging them to see the world from the perspective of investors).

Graeber writes that "As the middle classes are being pulled upward to identify with the perspectives of the financial sector, the actual operations of financialization are pulling down in such a way as to make it increasingly difficult for many to see themselves as middle class at all.

The neoliberal age was initiated, in the 1980s, by an attack on the political place of labor—the breaking of the miner’s strike in the United Kingdom, the air controllers’ strike in the United States, the rail strike in Japan—followed by an eventual purging of any working-class influence over any mainstream political party. This was accompanied by an idea that mass home ownership, access to consumer credit, and the like, would allow the bulk of the population to identify themselves no longer as working class but as middle class. But there is, I think, a catch here. “Middle classness” is not really an economic category at all; it was always more social and political. What being middle class means, first and foremost, is a feeling that the fundamental social institutions that surround one—whether police, schools, social service offices, or financial institutions—ultimately exist for your benefit”.

To be continued

Swallowed by the Internet

These last few days, I’ve had the feeling of being completely inundated by the freebies and goodies available on the internet. My interests – as readers know – are rather weird things such as the process of change; the machinery of government; the strange fixation anglo-saxons have developed over the past 40 years or so for “reforming” it; and the mental maps we use to make sense of all these things. 

At the weekend, I cam across a couple of items which took me back some 5 years to the 

point at which I realised I had become totally confused by all the talk about “systems 

thinking” and “complexity” and developed one of my famous tables to encourage me to get some clarification. 
Here I am some 5 years later still confused – so that clearly didn’t work. 

But a couple of items looked promising – first Systems thinking for social change by David Stroh (2015) 

which offered 2 pluses. 

• It’s a lot clearer than the books I listed in 2018 and 

• it’s in the field of social change which is one which has long fascinated me. 

Sure it’s a bit repetitive – if not formulistic in that American way – but its clarity and optimism 

encourage forgiveness. There’s an interview with him here. 
His approach has been much influenced by the work of Donella Meadows and, if you read 

just one thing about systems theory, I strongly urge you to read her short paper on Leverage Points which just might take you to her “Thinking in Systems – a primer”; Donella Meadows (2008) 

That then led me to a little 2017 publication from the OECD – "Complexity and Policymaking” and another intriguing pamphlet Building Better Systems; Charles Leadbetter (2020) which is certainly formulaistic as indicated by this excerpt

One simple way to sum this up as a rule of thumb is to remember that 3 x 4 = 12.

• System innovation involves work across three levels, the macro, meso and micro;

• Change is unlocked using the four keys: purpose, power resources and relationships;

system innovation involves people playing 12 roles

But that led me to a highly readable book which has just been published in open edition Wicked Problems in Public Policy by Brian Head (2022) and "Complexity and the Art of Public Policy – solving society's problems from the bottom up" David Colander and Roland Kupers (2014)

As if that wasn't enough, I was then sucked in by Martin Stanley's brilliant website named simply UK Civil Servant by a QUITE BRILLIANT summary of the various recent disasters which have struck the UK. Surfing brought me material I only vaguely knew about.

Radical Visions of Future Government (NESTA 2019) Some zany ideas 170pp

Windrush Lessons Learned (2020) an independent report ordered by the Home Sec of the time. It’s 280 pages long!

Civil Service-Ministerial Relations (Bennett Institute 2022)

Reimagining the State – an essay (Reform 2022) 15pp

Reimagining whitehall (Reform 2022) 20pp

By that stage, I just wanted to shoud out "Stop the World, I want to get off!