Newsletter autumn 2006
See below: Bill Ford, Calvin Coolidge and why we need to hold onto our seats this October.
Who killed the idea of mutualism?
A century ago, the idea of an economy based on co-operation and mutualism was torpedoed by the Fabians. Would history have been any different if Joseph Chamberlain had gone through with his intention of marrying Beatrice Webb? All is revealed in my essay in a new book of historical counter-factuals called President Gore and other things that never happened.
The new generation of government targets
Don’t believe what you hear about Whitehall targets being rowed back. The new generation of targets are biting even harder, and are seriously threatening the independence and effectiveness of the voluntary sector. See my speech to the NCVO/ASSN conference at Warwick University.
A whole new kind of public services
There is an emerging new ‘co-production sector’ at the fringes of public services, which is humanising them and making them more effective. The trouble is, administrative systems are corroding it. See our new report published by the Joseph Rowntree Trust, Hidden Work.
What if the NHS became a wellness service?
That was how it was envisaged, but now it just tries to cure people. What would the NHS look like if it became a genuine National Wellness Service? We set out some answers in Life Begins at Sixty: What kind of NHS after 2008, which is a prospectus for a new joint project between the new economics foundation and the Young Foundation.
No more left versus right
There isn’t any public versus private in UK politics now. The future is big versus small, central versus local, systematised versus human. See my speech to the Liberal Democrat conference in Brighton on the party’s Meeting the Challenge policy process.
BILL FORD, SUSTAINABILITY AND THE CRASH
“The business model that sustained us for decades is no longer sufficient to sustain profitability,” wrote Bill Ford, resigning as chief executive of Ford in an email to all employees.
The clear implication was that he had no idea what business model would make sense now, and was unsure whether there was one. It was an important admission and a significant one, because it isn’t just Ford that’s in trouble.
Part of Ford’s woes, like so many of the other corporations that are struggling, is the rise in fuel prices, in this case their unimaginative adherence to the 4X4 market, which is now – as predicted – vanishing before their eyes.
But it is more than that. As many as three quarters of Standard & Poor companies are now rated high risk (two decades ago it was 35 per cent). The big global brands have been losing value consistently through the decade. The business environment is confused and the world is turning against the big names – with their indefensible salaries, their narrow horizons, glitzy ubiquitous offerings, tax breaks and state subsidies.
In the long run, their inexorable demise is good for the planet and good for the economy. There should be no place for the destruction that subsidised corporations are wreaking on the planet, while they their manifest privileges, regulatory and fiscal, have been suffocating the small enterprises that underpin the economy of the real world.
Even so, it is hard to be optimistic about the long-term future – and I am – without being aware of the short-term dangers inherent in this shift. The very instability of the dinosaurs poses a risk that is, in its way, even greater than the Iraq war and the mishandling of the War on Terror.
The indicators of business and property confidence in the USA are low. Dollar debt is at an unprecedented high, with $9 trillion borrowed by the American government alone. The derivative market, only three years since Warren Buffett called them “financial weapons of mass destruction”, is now worth $17.3 trillion, with little understanding of the consequences if these were to unravel.
For reasons unknown to science, financial crashes nearly always happen in October. This October, we are going to have to hold onto our seats. Because the chances are that the major disasters that George W. Bush’s presidency will be remembered for are yet to come.
It is possible that Bush will be remembered like Calvin Coolidge – also given to being photographed in cowboy costume – who famously pronounced the American economy in good health just months before the Wall Street Crash.