real world economics

i knew that me and economics didn’t go well together when i tried to study it at A-level. It just seemed so confident in itself, and its view of the world was not one that i recognised: it was too rigid and linear; too eager to present an objective view of Facts. But these sorts of criticisms make me sound like a tree-hugging sandal wearer, so I’m glad that I took some time out this morning to listen to the first of Harvard Professor Michael Sandal’s BBC Reith Lectures.

His argument can, I think, be summarised by his statement that ‘markets leave their mark on social norms’. His brief introduction (looking forward to the development of the themes in later lectures) was simply that we cannot separate the study of economics from broader social, moral and political questions. To only consider what is the right thing to do from the economic perspective (e.g. efficiency) denies the consequences of introducing market mechanisms to new sites of society. They are not morally neutral.

Two good examples he gave. First, the childcare providers who began to charge parents for collecting their kids late. Economists would assume that incentives such as avoiding this fine would mean that there would be fewer late parents. What actually happened was that more parents started to be late. They no longer felt they were putting the teachers out by making them stay late, but instead that they were paying for a service. Second, on blood donation. Sandel argues that we need to consider the social consequences of turning something which had been a gift into a commodity. What does that say about society and its values? It’s not that he was saying we shouldn’t ever commoditise stuff – but rather, that we should recognise and debate the consequences of doing so.

Sandel is not alone in arguing that the dismal science becomes a whole lot less dismal when we start talking about political economics – situated in the real world, where morals and values are given parity with efficiency. Paul Ormerod’s brilliant books – The Death of Economics and Butterfly Economics – make this case powerfully too, arguing that we have allowed economists to believe that they can use their rules and theories to predict the world and to decide how to act. Ormerod believes this betrays economics’ roots, as a science that sought to understand and describe the real world as it unfolded.

wouldn’t it be better if?…

so today sees the announcement of a new Innovation Council under the auspices of Liam Byrne in the Cabinet Office. The Council will act as jury on the range of ideas that everyone is being encouraged to submit about how things could be better. You can have your say here.

I like this idea a lot – and it’s a nice site (as we’ve come to expect from the good people at mysociety). I am still really interested in how the Cabinet Office and others are going to succeed in taking the many hundreds of little ideas that hopefully this site will generate, and incubate them enough to let them grow into truly radical, system-changing innovations. I don’t think we know a great deal what this process looks like, and particularly given the current political climate, the pressure will be on to pick out the quick wins and the ones that are easy to implement without major change.

That said, good luck to the Council (see who’s on it here), and watch this space to see what emerges after their first meeting at the end of June…

in a world in which information is like air, what happens to power?

… this is the question behind Us Now, the film I participated in a little while ago. There’s been quite a flurry around it recently (check out the usnow hashtag on twitter… by the way if anyone can tell me where the hash symbol is on my macbook I will be eternally grateful!) because, excitingly, you can now watch the whole film online, and free, courtesy of joiningthedots.tv

women and the recession

last week I went to a really great debate hosted by Compass and Fawcett on women and the recession. Harriet Harman may not have won many votes in her response to the expenses fiasco, but she packed a real punch at this event: funny, passionate, willing to stick her neck out and say what she believed in. After attending far too many events recently where ministers sound more like droning wonks, this was a welcome relief.

There has been quite a lot of debate about whether women are more affected by men than the recession. I don’t know how productive these debates are, but what’s clear is that we need to delve behind the stats to understand what’s really going on. Take for example the claimant count (ie the number of people registering for Jobseekers’ Allowance): on this basis, it looks like men are hit harder by what’s happening. However, if you look at levels of economic participation you get a very different story: in some parts of the country, women’s employment levels are falling two, even three, times faster than men’s. So women are losing their jobs at worrying rates (hardly surprising given they work in sectors that are far more vulnerable to the recession and in firms that are less unionised), but not then registering as unemployed.

Recent research by Mori (you can download here) shows that beyond job losses, women are shouldering a disproportionate burden in terms of stress and anxiety, too. Not only are they worrying about their own jobs, but also their partners’ jobs, their children’s future, their parents care needs, and the pressures on household budgets as the cost of fuel and food rises. What I find fascinating is that a few years ago, when asked what they were most concerned about, men would say ‘the economy’ and women would say ‘education’ or ‘health’. There’s no difference now: everyone ranks the economy first. But women worry about it in terms of family life as well as in terms of employment and money per se. As we found in doing the work for The Other Glass Ceiling, women continue to act as the family managers (even if couples say that they share roles more equally now) and so it falls to them to adapt and cope in the light of a loss or drop in wages. Managing poverty is difficult, time consuming, and often secretive work.

The event was a bit short on solutions to these issues – other than emphasising the importance of targeting information drives at women, and raising benefits – but it was a timely reminder that one of the ways in which the recession is different to previous downturns is that women’s work matters so much more now than it has done in the past. It matters to women themselves; it matters to family budgets; and it matters in every sector of the economy. We have to find ways of valuing it – which is why I applaud Harriet Harman’s success in getting the Equality Bill to where it is now, with its determination to root out pay discrimination and improve women’s representation in all walks of life.

evidence based or intelligence driven policy?

OK, so I may be the only one to care about whether we talk about evidence based or intelligence driven policy, and I’m very aware I stand to be accused of campaigning for replacing one piece of jargon with another. but I keep on wanting to return to this theme in various pieces of work at the moment.

here’s a short paper I did for Kent to accompany a workshop which the Social Innovation Lab for Kent ran with a mix of policy people from across the council. Basically I argue that human and social factors need to count for as much as data and trends when it comes to taking account of ‘evidence’ in policy work. Sounds so simple and yet the barriers to embedding this kind of approach are many. Culturally, the public sector still prefers rational analysis to emotions and experiences. Skills-wise, very few councils have the research know-how or methods at their fingertips to do this kind of work well. Organisationally, research and policy functions are rarely co-located…

more on local pounds and transition towns

thanks to T for mentioning an article in the FT this weekend on the Lewes pound that I mentioned in the blog below. And I am very, very interested in the transition towns network. Their wiki is exciting and inspiring. I especially love their 12 step plan, which includes stages like ‘the great unleashing’ and ‘honour the elders’. Wise advice indeed.

coproduction and communes

when I was out in LA I managed to fit in a catch-up lunch with John Thackara, whose book In the Bubble was a real source of inspiration for me when it was published a couple of years ago. Our conversation turned from sustainable design to communes, as we turned over the question of what tools and support people need in order to make it easier to share resources. Wannastartacommune is an inspired site, from its name to its content, on this question.This isn’t about ethereal or abstract debates about the principles of coproduction, but rather, simple legal, technological and practical issues that might enable groups of older people to pool assets in order to make them go further, for example.

And so to the bulk-buying project that has grown out of our Just Coping work in SILK. We’re currently working with the Digital Inclusion Team at CLG to business case an idea from our workshops with residents of the Parkwood Estate in Kent to make it easier for people to club together to buy stuff they need – simple, but genius, and it has the potential to make everyday life much better.

I was mentioning this project this morning when I met up with the new economics foundation. They are doing some fantastic work on coproduction and sharing resources. This pamphlet, by their new head of social policy Anna Coote, is a piece of original thinking that connects up the agenda around sharing resources for environmental and social reasons. nef are building a really interesting set of projects exploring different aspects of how to put coproduction into action. Just a few examples of this include:

Work on alternative currencies. The picture on this blog is of the ‘Lewes pound’ – an currency that John Thackara alerted me to, and designed to incentivise Lewes residents to shop locally. L from nef also told me about other areas who are developing alternative currencies, not only to support local businesses, but also to facilitate timebanking and to put a value on non-monetary resources people can contribute to their communities – for example Brixton should be getting their own pound later this year.

Work on procurement and commissioning models. There’s an essay about nef’s work with Camden on this issue in the pamphlet I’ve been editing for IDeA – will post this up once it’s launched at the end of March. Other councils such as Kirklees are also trying to find ways of embedding the principles of coproduction into the way in which they commission services – no mean feat. This is the detail where the devil resides. If we don’t get it right coproduction will remain a thinktank idea rather than a practical agenda.

Work on measuring value and impact. There are various models out there for measuring impact at an individual level – not least the stuff on ‘my metrics’ that J and I wrote about in Journey to the Interface – but the real prize will be in helping local councils and other public service organisations measure value from coproduction models in new ways. There’s a real tension between trying to monetise or turn everything into numbers to make measurement easier, and asserting that some value just can’t be converted in this way. Again, nef’s work on the social return on investment is pretty advanced here, but there’s lots more to be done.

Work on the core values of coproduction. One of the things we discussed this morning is the fact that it’s too easy for the underlying value system of coproduction (about mutuality, respect, recognition) to get lost in its translation to a ‘mainstream’ political agenda – see for example what has happened with self-directed support, which too often is simply seen as individual budgets. In my view, the only way we can come up with a credible and authentic account of what coproduction means is to draw on emerging practice across many sectors, from housing to social care to policing. How can we connect people together who are pioneering in this field, in order to give them even more rocket fuel to keep going?