TOWARD a NEW SETTLEMENT: a Deep Place Approach to Equitable and Sustainable Places

TOWARD A NEW SETTLEMENT: A deep place approach to equitable and sustainable places Professor Dave Adamson and Dr Mark Lang April 2014 Upon first consideration these two issues may appear Prior to the early 1980s, Keynesian approaches to unconnected. However, the Deep Place Study is fiscal and monetary policy in the UK were concerned predicated on the belief that they are two elements to balance out the excesses of boom and bust of the same problem and that the search for their cycles of the economy. At the same time a broad solution intricately connects them in social and consensus supported redistributive welfare policies, economic policy. The rise of what was termed the which ensured that at times of economic growth ‘new poverty’ in the 1980s saw child poverty levels all sections of society benefited through improved rise from around 10% in 1968 to nearly 33% in 1996 welfare, health, education and housing. Central to (UNICEF, 2001; Gregg et.al., 1999), a figure which has this approach was a progressive taxation system stubbornly remained fairly constant with one third that ensured that high earners, both corporate and of children continuing to live in poverty in Wales individual, contributed proportionately to state (Save the Children, 2013). At the same time warnings income providing the basis for expanding welfare. of environmental damage were being ignored Often now referred to as the Swedish model, this (See for example: Only One Earth, 1972; Blueprint model of capitalism was adopted to varying degrees for Survival, 1973) and even when eventually in the advanced industrial economies of Europe. recognised there has been consistent failure to agree and implement international protocols on carbon Following the early 1970s oil shock and a subsequent reduction, such as Kyoto. Both these core social period of ‘stagflation’ in which low growth and policy problems stem from a dominant paradigm in high inflation were simultaneously experienced, OF CHILDREN IN WALES our society that is exploitative of both people and the Keynesianism became discredited and the new LIVE IN POVERTY environment as mere factors of production. This is economic orthodoxy of monetarism took its place. not an anti-capitalist statement, but rather a question Aligned to the political doctrine of the New Right mark placed over the particular model of neo-liberal this configuration revived interest in neo-liberalism capitalism which led to the international collapse to create a radical rethinking of the role of the state of 2007, and the subsequent draconian austerity and its responsibilities to citizens. This neo-liberalism practices which have emerged to ‘correct’ the failings rejected the idea that markets could be managed and of that form of capitalism in the European context. argued that the role of government was to minimise The de-legitimisation of welfare rights begun in the 1980s has reached fruition in political and cultural values where the barely-managing blame those who can’t manage, and politicians foster an attack on the post-Beveridge settlement which has ushered in a ‘decade of destitution’. state activity, reduce taxation and simply provide reducing skilled and unskilled blue-collar pre-Beveridge levels, with a consequent loss of the the correct minimalist regulatory framework to employment opportunities. welfare safety net for some of the most vulnerable promote economic activity. In parallel, welfare was groups in society. interpreted as dependency and undermining of our • The extension of supply chains for the most individual and collective work ethic. This model immediate of human needs to a global level of • All pretences to recognise climate change risk favoured deregulation of both labour and financial production and distribution. This has been at the and mitigate through the pursuit of ‘green’ policy markets and saw an unparalleled period of economic expense of local labour markets and consumer objectives are being rejected in a renewed pursuit of growth only occasionally punctuated by short-term sovereignty and has effectively marginalised local economic growth. Once again the protection of the recession, allowing Gordon Brown to claim he had economic activity. environment is being seen as an unacceptable cost to abolished the ‘Tory boom-bust cycle’. the economy. • The de-legitimisation of welfare rights begun in the The true cost of this period was experienced in 2007, 1980s has reached fruition in political and cultural • Economic growth in the UK is now seen as being however, when the debt-based foundation of the values where the barely-managing blame those who derived from large scale, transport infrastructural economy became apparent and the Global Financial can’t manage, and politicians foster an attack on the developments, and fuel security will be achieved by Crisis (GFC) occurred. During the period of neo- post-Beveridge settlement which has ushered in a environmentally challenging approaches to nuclear liberal economic policy a number of strands had ‘decade of destitution’. (Unwin, 2013). energy and fracking. emerged to characterise the economy of the UK and other western nations: • The provision of public services is depleted by a • Investment in green infrastructure is off-loaded twin strategy of privatisation by outsourcing, and from the state and the corporation onto the citizen as • From the 1980s onwards reversals of labour rights reductions in funding that will prevent public sector consumer, whether through the purchase of energy bring us today to the point where in-work poverty is organisations delivering the level of services they or the individual household investment required by now the primary cause of poverty in Wales and the have been historically committed to. Most evident in schemes such as Green Deal. UK, and zero-hour contracts are the newly achieved health and education, the array of services provided pinnacle of the ‘flexible’ workforce. by local government now faces the same fate. To raise these issues is not a criticism of capitalism itself, but rather of the domination of state economic • A rebalancing of the economy emerged favouring • The argument for ‘austerity’ measures to reduce and social policy, regardless of party political control, financial capital over manufacturing, simultaneously budget deficits is returning state expenditure to by the general economic and political tenets of Tredegar is one of these places where the demise of traditional industries and the failure to economically diversify has created considerable poverty and hardship, which manifests in the poor health and well-being of residents and a virtually collapsed local economy. neo-liberalism. Nor is it a criticism of globalisation disillusionment has led many people to look for After all, the large majority of economists as international trade has long been a source of alternative, more ethical and socially responsible who predicted the crisis rejected the dominant economic diversification, wealth creation and ways of organising businesses and services, neoclassical thinking: from Dean Baker and Steve economic development. Rather, these issues are particularly those run on a co-operative, mutual or Keen to Ann Pettifor, Paul Krugman and David identified in argument for a different approach to not-for-profit basis. (2014, p2) Harvey. Whether Keynesians, post-Keynesians or the organisation of our economy that benefits all Marxists, none accepted the neoliberal ideology sections of society rather than a narrow minority. This research therefore attempts to consider an that had held sway for 30 years; and all understood Rather than the increasing polarisation ushered in alternative approach to neo-liberal economics, that, contrary to orthodoxy, deregulated markets by neo-liberalism, we wish to identify patterns of which recalls some of the central Keynesian don’t tend towards equilibrium but deepen the economic activity that underpin the welfare and principles of state economic management, but brings economy’s tendency to systemic crisis. (Milne 2013) well-being of all members of society, whilst reducing them together with a heightened contemporary our environmental impact. concern for poverty eradication and environmental At the height of growth in the neo-liberal era we protection. In contrast to neo-liberalism which have also seen the highest levels of poverty in our In arriving at this perspective we are supported by has focused on the market as the sole regulatory disadvantaged communities, which have become the recent Report of the Welsh Cooperative and mechanism that can truly steer the economy, we will disconnected from the national economy. Tredegar Mutuals Commission (2014), which concludes: suggest that markets can be managed and especially is one of these places where the demise of traditional at the local level. We will suggest that appropriate industries and the failure to economically diversify Consequently, the Commission believes the interventions by government and other agencies has created considerable poverty and hardship, intellectual and political climate has changed can significantly reduce poverty whilst at the same which manifests in the poor health and well-being of radically and been reflected in the nature of the time moving us towards a low carbon society. This residents and a virtually collapsed local economy. political debate, with increasing discussion about might appear to be a radical approach, but it is one an ‘ethical’ or ‘socially responsible’ capitalism. increasingly supported by a

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