The Foundational Economy – can it rescue social democracy?

Cross-border Talks’ Substack, Peripheral Vision

Cross-border Talks initiates Ronald Young’s column of Peripheral Vision, named after his personal blog, which is a sophisticated attempt by “a retired social scientist” to make sense of the world and of the great amount of social sciences literature about it. The rubric will be offering perspectives and reading materials on complex issues from the contemporary world of capitalism, good governance, social change and intellectual life.

Ron Young has gathered water from various springs in different places of the globe, and from different compartments of knowledge and professional experience. He has worked from his mid 20s with an unusually wide range of people (professionals, politicians, community activists and a much smaller number of academics), who shared an aspiration to improve social conditions. He has had a job in a Polytechnic (and planning school) from the late 60s to the first half of the 1980s, which gave him the licence for 17 years to talk and write about the issues relating to his work of achieving a strategic influence, that helps a more inclusive style of government in the West of Scotland for 20 years.

After the fall of the Berlin Wall he reengineered himself as a consultant, working and living for 30 years in a dozen countries in Central Europe and Central Asia – in the pursuit of what the turgid academic literature has come to call “good governance”. In the meantime and especially after his retirement he has been trying through wide reading and writing to make sense of what the masthead of his blog refers to as “social endeavours”, i.e. efforts to make the world a better place.

The blog Peripheral Vision has been running for some 15 years – with 2-3 posts a week. It may not sound much, but Ronald Young takes pride in being “a resource person”, i.e. someone who researches, networks and shares the results. He sees his blog as an opportunity to share the insights of others and he is coming to Cross-border Talks to do that with CbT’s audience too.

First issue of Ron Young’s rubric is on UK Labour Party and the searches for revitalization of left-wing politics, that are summed up under the name of “the foundational economy”.

The Foundational Economy – can it rescue 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 the Conservative party has 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. Its 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): titles and short comments

“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)

Photo: London (source: Pixabay, CC0)

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