Unemployment in January 2012

Unemployment (on the claimant count) in Worcestershire was 11,404 (4.1%) in January 2012, an increase of 675 claimants (0.2%) from the previous month, compared with 6.9% for the West Midlands and 5.7% for England and Wales.

The districts with the highest and lowest unemployment rates are Redditch and Worcester (both 5.1%) and Bromsgrove, (3.1%).  The male unemployment rate in Worcestershire is 5.0% (up 0.3%), compared to the female rate of 3.0% (up 0.1%).  In terms of urban centres, Kidderminster had the highest unemployment rate at 5.7%. The lowest unemployment rate was in Bewdley (2.5%).

The number of vacancies in Worcestershire was 3,614 in January 2012, which is 27% lower than in December 2011.

Unemployment increased in all six districts in the county, with the largest monthly changes being in Redditch (138), Worcester (157) and Wyre Forest (171).  There is no indication of a specific reason for these increases, although it is reported that the DHL logistics depot in Droitwich has been closed and the work moved to Somerset with the loss of around 300 jobs.  (It has just been announced that the Shop Direct – formerly Kay’s – distribution depot on the same estate in Droitwich is also to close).  Either many of the employees live in other areas or have not yet claimed Job Seekers’ Allowance as unemployment in Droitwich is only up by 25 and in Wychavon as a whole by 70.  The urban centres with the largest increases are Stourport (307), Worcester (157), Kidderminster (145) and Redditch (127).

Those out of work in the county for more than six months fell fractionally but is still 36% of all those unemployed; the number out of work for more than 12 months rose slightly and is around 16% of all claimants.

Youth unemployment again rose (by nearly 200) in January 2012 with 3,440 people aged 18-24 were claiming JSA benefit compared with 3,245 in December 2011 and up 380 on January last year (3,060). 3,145 people aged 18-24 have been claiming for up to one year, which is 7.2% of the 18-24 population, (unchanged from December 2011) but still marginally higher than the England average.

Although Worcestershire has seen a larger increase in unemployment than for some time, the national rate of increase was slower last month.  Unemployment is a ‘lagging indicator’ in that it often begins to respond some months later to changes in the economy shown by other indicators.  Although the economic news is somewhat mixed there seems to be a growing view amongst commentators that we may be seeing the bottom of the current dip.  News from the Recruitment and Employment Confederation suggests that, whilst there is a short-term drop in hiring intentions, in the longer-term in 2012 some 59% of employers intend to take on permanent staff and there is still demand for temporary staff too.

When I posted a similar summary of the unemployment figures last month I was challenged by a colleague to provide some theological comment.  I’m not too sure about there being much theological work on unemployment (though there has been a fair bit about employment) apart, perhaps from the comparison of redundancy to bereavement.  I thought what I might do is write a separate post about my experience as a chaplain of accompanying now a considerable number of people through the experience of restructuring and redundancy.

 
Most of my work as a chaplain is with people at work and if people lose their jobs we tend to lose contact with them so that there is less knowledge about what it is like to be unemployed.  We have not much experience of job clubs for those who are unemployed, unlike colleagues in Solihull and in Coventry and Warwickshire and which the BCUIM team are working on in the Black Country.  This may be because, whilst there are pockets of more serious unemployment in Worcestershire, there is not generally a perception of it being a problem because the overall rate is comparatively low.  

Doing Theology in the Contemporary World

I try to blend some thinking about theology and economics, as the title suggests, in what I write in this blog - though I was somewhat alarmed to discover when told it comes up on Google that there is something called Theo economics, which seems to be economics based on a pretty fundamentalist understanding of theology.  I wouldn’t claim to follow  any particular ’school’ of theology, though I suppose, having been an industrial missioner for practically 23 years, I draw much of my approach from the method that lies behind that.

I have been reading ‘Engaging Mission: the lasting value of Industrial Mission for today’ by Peter Cope and Mike West (Grosvenor House Publishing, 2011).  Peter was the first chaplain in Worcester in the 1970s and early 80s (in a post from which the one I now hold can be directly traced) in a career that spanned London, Worcester, West Bromwich and Telford.  Mike was also pretty much an IM ‘lifer’ working in Herts. and Beds and South Yorkshire.  They both belong to the generation of missioners, now retired, who started out at a time when the links back to the roots of IM in the 1940s and 50s were still very clear and when IM was growing in strength and confidence.

Along with much of the church IM is now in a different world, and they wanted in writing the book to preserve the knowledge base before it is lost.  The book is, therefore, a history but more than that.  Peter and Mike are clear that IM is about more than workplace chaplaincy – a common term now that manufacturing nationally makes up little more than 10% of the economy and visiting is biased more towards local government, retail and other service industries, and the emergency services.  But they also want to make the point that in contrast to Malcolm Torry’s ‘Bridgebuilders’, published in 2010, which is a history of chaplaincy, that IM is more than this.

It differentiates between the more pastoral model of the early days of South London, which was based on the vicar visiting people at work in factories in his parish, and Ted Wickham beginning in Sheffield steel mills in 1944 who sought to engage in conversations with a purpose.  Initially, these would be in the ‘snap-break’ but there were also other meetings, often in the back room of a pub, to which workers and managers were invited to talk in more depth.  I won’t rehearse the whole story, but the point was that it was an attempt to wrestle theologically with issues relevant to people in the workplace.

As IM developed this attempt to connect issues was reflected in some of the networks that were set up both within industries and in some cases internationally.  As well as sometimes being advocates where they felt it was necessary to speak out, missioners tried to develop a deeper understanding of the issues they were confronting and the theological principles that might help them as ministers to respond.  And, although IM and the Church have at times had a mutually ambivalent relationship, attempts have been made to communicate what has been learned, not least through both lay and ministerial training.

The way of doing theology was about beginning with the experience shared with people at work.  Some of this originates, naturally, from being with people and hearing their concerns; some of it is connected to the theological foundations and the wider theological debate that was happening in the formative times of IM.  Among the post-war theological thinking that was influential were the writings of Richard Niebuhr, Peter Berger, and also Tillich, Bonhoeffer and others.  This was part of the development of inductive theology, starting with the world and seeking signposts that point to ‘another dimension’.  There was a warning from Archbishop Michael Ramsey (one of the keynote speakers at the 1971 Industrial Mission Association National Conference) that the inductive model would only be effective if those who practice it had deep within themselves the timeless truths declared by the Church’s teaching.  The use of the hermeneutical or pastoral cycle is a response to this where theological and ethical thinking is fed into the reflection, and there are also other developments specific to IM such as the Fraser Grid and on the other hand more deductive-based models such as Peter Cope’s own ‘Flying Machine’.

Another back-drop of the age was the search for ways of speaking of the Kingdom of God to secular people.  It may be no coincidence that that the concept of realised eschatology, put forward by the biblical scholar C H Dodd, and similar ideas would have been developed in the same post-war era.  But it can be, as Bishop Mike Bourke points out in his introduction to ‘Engaging Mission’, that hope of the Kingdom realised at least partially here on earth can morph into something that is always just beyond our grasp in this life, as the meditation that ends the book reflects.  This may be a realistic acceptance of what is possible whilst continuing to work for the goal or it may also be that as the post-war consensus has broken down that in fact another model will take its place.  In the current issue of ‘Crucible’ (January – March 2012) Malcolm Brown writes (p. 8) about how in John Atherton’s description an ‘Age of Atonement’ in the later 19^th Century, through which the church emphasised its calling to live in contrast to the mores of a rapidly changing culture, gave way in the 20^th  And then by the late 1980s and 90s a return to another ‘Age of Atonement’ seemed to be underway as trust in the possibility of God’s Kingdom coming on earth receded and the wider social order seemed too flawed to be subject to any simple ecclesial benediction.

What does this have to say about the way in which we do theology?  Malcolm Brown and also Peter Sedgwick in the edition of Crucible I have referred to above have produced two very thorough and thoughtful reviews of Christian social or public theology.  Sedgwick identifies at least six strands of thought in British public theology but I want to pick out just two because they reflect a debate that I and some friends have been engaging in: that is between Christian Realism and Radical Orthodoxy.  Christian Realism is the description my former colleague John Reader uses for the thinking behind the book he wrote with Chris Baker and John Atherton (all of the William Temple Foundation) called ‘Christianity and the New Social Order’ that I discussed in a post on 11 January 2012.  It has its foundations in the thought of William Temple (and in the original use of the term, Reinhold Niebuhr), though in Reader’s work also the thinking of many continental philosophers.  But the key point in this discussion is ‘realism’ insofar as it starts from how the world is.  One can see the connections with the IM thinking I have been laying out above.  On the other hand Radical Orthodoxy, two of whose proponents are John Milbank and Graham Ward, is a reinterpretation for the present age of a Christian grand narrative that in conjunction with writers such as Philip Blond of the ResPublica think-tank (of whose trustees Milbank is the Chair) sets out a vision of society based on an earlier mutualism popularised by the Big Society and in Blond’s book ‘Red Tory’.

There is no doubt that Radical Orthodoxy has many influential friends including Rowan Williams (Crucible, p. 29) and this may explain its rising profile.  And if we are now more in an ‘Age of Atonement’ one can see why it would have an attraction over and against a secular world that must be resisted and changed.  In summarising Ward’s thinking, Sedgwick (Crucible, p.30) speaks of the image-obsessed, destructive power of global capitalism that must be resisted by the only force that can stand up to it, which is the church.  ‘The church’, he says, ‘can embody a different desire, which is the participation in the ecclesial, sacramental body of Christ.’

My difficulty with this is that it contains an idealism that I only see in the church at its best, and not very often.  Too often I see an attenuated church struggling for its own survival, obsessed with its own affairs. It may be a safe haven with friends who speak the same language sometimes but that is to separate me from the real world where I am impelled to be.

However, when I am in that ‘real world’ I am also conscious of how slender the credibility of the church and faith that I represent has become.  Christianity, in the UK and Europe at least, is under pressure, as the latest judgement about prayers before a council meeting seems to suggest (an issue for me as a chaplain to a council chairman), though I am aware that the ‘secularisation’ debate is much more complex than those who throw slogans about may wish.  It is, however, a much greater issue for Christianity in the UK in my view than the anxieties of some about the pluralism of religions in our multi-faith society.

Sedgwick concludes his article (Crucible, p.32) by pointing to the enormous gulf between the highly sacramental world view of Graham Ward and those who represent what he calls the William Temple tradition and says the challenge is whether there can be communication between these different traditions rather than a set of self-contained theologies.  For myself at the moment I think I settle for something akin to the pastoral cycle, which seems to have wide acceptance, in bringing biblical insights and Christian tradition (and the best of the sacramental life of the church) to bear on the world as I encounter it along with other wisdom I have encountered along the way.  Christianity may be the most important thing for me (there are certain precious jewels I want to offer, as a friend experienced in inter-faith dialogue put it) but there are many other insights too that make it not the only means of playing my part in the life of the world.

 
Whether we go with the ‘Age of Atonement’ as the model for engagement with the present age or need to develop something else (I wondered in early posts in this blog about the OT prophets in the times of exile and wilderness) it seems to me the sunny confidence in sharing in the growing of the Kingdom of God must now be in question.  I have experienced some hard times in my own life so as to question whether it can only get better, and it seems to me both shorter term cyclical economic issues and longer term geo-political, let alone ecological and resource issues, should give us pause to think about what is an appropriate theological model with which to interpret the world as we go forward into an uncertain future.

Justice and Fairness

Below is a 'Thought for the Week' I wrote about the issue of executive and banker's pay for the Diocese of Worcester website entitled How Much is Fair?  Since I wrote it I see that the Chairman of RBS has said that banker pay has been too high for too long and needs to be corrected.  In the same article the Chief Executive of Deutsche has said that there is the danger of a social time bomb arising from wealth and income inequality, though his solution appears to be more philanthropy.

Sir Philip Hampton's views about the need to pay high rewards to bankers to be competitive in that particular job market even if they are high relative to everyone else only begin to recognise the wider issues that I discuss and the Chief Executive of Deutsche shows there is a debate to be had about whether the negative effects of such pay can be overcome by giving enough of it away or if it simply needs to come down.  Many shareholders, who may feel that they have had a poor deal compared with the senior staff, might feel the latter but there is a wider issue of what is fair and just in society as a whole.

"How Much is Fair?

Most of us are feeling pretty squeezed at present.  So the issue of executive pay, which has soared away far ahead of the rises that everyone else has had over recent years, is a contentious issue.  So much so that our politicians have felt it necessary to put forward ideas for controlling the pay of directors and to put pressure on RBS about the bonus of its chief executive.  Whilst this may have a small effect on those in the boardroom, it will have no effect on the many bankers (and others) who receive six figure salaries and more because they are not directors and are not affected by the proposals.

More significantly though, the controls proposed by both government and opposition only attempt to make changes at the margin and possibly connect pay a little more closely with performance.  The fundamental question of what is reasonable remuneration, ‘compensation’ if you like, for the work done, the responsibilities borne, the results attained is not really under consideration.

We are told these huge sums of money are needed to attract the highest talent and that bonuses are necessary for motivation.  For bonuses to truly motivate there has to be some kind of connection between the performance of the individual in effort or ability (or cleverness in wheeling and dealing), the results achieved and the reward received.  Often this is far from clear.  A former chief executive of Shell, who was paid many millions, has said that if he had been paid 50% more he would not have performed better and if he had been paid 50% less he would not have performed worse.  People are motivated by many other things not just, or even, money.  As for paying to attract talent, if firms attempt to pay ahead of the bench-mark, then the bench-mark will continually get higher and the only point of reference is within the group, not the rest of the world.

However, a connection with the rest of the world will eventually matter.  Even those setting the agenda for the World Economic Forum in Davos are saying that ‘severe income inequality’ is the biggest global risk.  At the heart of this are issues of justice and fairness on the one hand and freedom on the other – two of the themes promoted by the Kingdom People material we are being encouraged to think about by the Diocesan 20:20 Vision Group.  Bill Gates has praised the freedom of capitalism that allowed him with a few friends to create Microsoft in a garage – and he now has the freedom to give away much of his unimaginable fortune to good causes as he sees fit.

There is no doubt that the Bible, in both the Old and New Testament, speaks out against slavery and oppression, whether political or economic, but the freedom of any individual or group needs to be held in tension with the obligations and mutuality they share with those around them.  Which is where equity, fairness and justice come in.  Not simply in terms of what might be seen as a reasonable reward but in what it says about the value of everyone and their contribution to the whole, and also because great wealth can bring disproportionate influence and power.  It can also be damaging to the soul (e.g. Mark 10:21-22, Luke 12: 20-21)."

There is a word limit on Thoughts for the Week so this is a little more compressed that might otherwise have been the case.  The almost throwaway biblical references at the end raise some important points about our attachment to wealth and the way in which it can distort our priorities both in terms of the things that really matter in life and in giving us a false sense of security.  Whilst this is heightened for those with great wealth, it may also be true for many others of us who live in relative comfort.  There is a moral and ethical imperative that is more important than a purely financial one. 

    

Unemployment this month

Unemployment went up slightly in Worcestershire in December by 63 on the claimant count to 10,729, or 3.9% an increase of 0.1%.  On this basis it compares with 6.6% in the West Midlands and 5.5% in England and Wales, but as always, it is important to compare like with like, a point I will discuss later.

The districts with the highest and lowest unemployment rates are Worcester and Redditch (both 4.8%) and Bromsgrove (2.9%), whilst in terms of urban centres Kidderminster has the highest rate at 5.2%, twice the rate of the lowest (both Bewdley and Wythall at 2.6%).  The male/female split is 7,115 (4.7%) men to 3614 (2.9%) women.

Whilst the increase of 63 over last month is quite small (most numbers are in low double figures except Wyre Forest with and increase of 79 counteracted by a fall of 33 in Bromsgrove), the increase over the same month a year ago is 493.  Most of this is in Worcester (up 246, though with a drop of 2 compared with last month), and Wyre Forest (up 121 on the year).

All these figures come from the Worcestershire Economic Summary and whilst it is true that the numbers compare favourably, as they put it, with other parts of the region and country none the less there will be pockets in the county where the rates are much higher, as we have seen with youth unemployment that I have referred to in previous blogs.  One way of comparing is to look at the interactive map for the council wards in Worcestershire.  It is also possible by following the menus to go down to Local Super Output Areas.  This shows significant differences between some of our urban areas of highest need and other parts of the County.  It is also possible to compare across the region and country  by constituency on the BBC website.  And on the basis of these much wider areas Worcestershire does come out much more favourably compared with, say, Ladywood in Birmingham which has the highest unemployment rate in the country at 12.2%.

As well as the issue of Worcestershire County Council using different census data for population figures to arrive at the per-centage rates as compared with the ONS, so direct comparison is difficult, one must also take care over Job Seeker's Allowance claimants (approx. 1.6 million nationally) and the more widely used figures (2.68 million nationally) that are based on a survey of those looking for work.  These latter figures are deemed a more reliable indicator of those out of work because there are many people who are not included in the JSA figures either because eligibility has been tightened over the years, perhaps because their personal or household income or finances rule them out, or because they are claiming another out of work benefit or, probably in a small number of cases, they choose not to claim.  The difference between the two measures of unemployment has widened considerably over the last 20 years as the graph in a BBC article about the unemployment figures more generally shows.  This makes the claim, in the County Economic Summary that I referred to above, that unemployment now at 10,729 JSA claimants is considerably lower than the peak in the last recession at 23,000 in February 1993 look like we are comparing apples and pears.  I'm not sure if unemployment is as bad now as in the recessions of the 1980s and 90s but I think that relatively it is worse than the comparison above suggests.

Finally, a few words about vacancies.  The number of vacancies in Worcestershire in December 2011 was 4,981, which is 12.3% higher than the previous month.  Hopefully, this is good news, but I just want to take issue with a silly piece of journalism on the BBC Midlands Today programme on Wednesday (18 January) where they said there were 243,000 people unemployed in the West Midlands but there were 33,000 vacancies.  They tried to run this as a story about skills shortages and there being jobs out there that people weren't taking.  Undoubtedly, there may be shortages of people for some very specific jobs and there will be some jobs that many people won't want to do either because of the pay or the conditions (and this might be why some of them are filled by migrant workers).  But self-evidently, not every vacancy is going to be filled all the time because there is a time lag in filling jobs.  Even at the height of the boom there would have been vacancies waiting to be filled.  It is also the case that the figure quoted is only for vacancies notified to JobCentre Plus.  Many employers choose to use other private employment agencies or to advertise in the press or on the internet, wherever they judge is the best market-place for those types of employee they are seeking.  For example, by and large, managerial and professional vacancies are not advertised at the Job Centre.

All this illustrates that the jobs market, both of vacancies and for those who are unemployed is a constantly moving situation.  There are unfortunately, a significant number who have been unemployed more than six months (37% of the total) and 12 months (15% of the total) in Worcestershire, but the number of those unemployed quoted each month is a changing population as people move into and out of unemployment, and likewise, vacancies become available and are filled, some more quickly than others.

However, in all this analysis of statistics, let us not forget the people who are affected.  I will always recall, as I may have mentioned before, saying to the District Manager of JobCentre that unemployment is thankfully low in Worcestershire, to which she replied that it was still a disaster for each individual affected. 

I recently went to a presentation about the horticulture industry in the West Midlands as part of my role as the Agricultural and Rural Life Officer in the Diocese of Worcester.  The purpose was to present the results of research into the value of the sector to the region's economy and to look at ways of strengthening the industry.  Horticulture in the West Midlands, including potatoes mainly in Herefordshire that make up nearly half the value of the sector, is worth £600 million in GVA (gross value added) to the region.  This is about £350 million at farm gate prices plus all that is added in processing and wholesaling afterwards.  Worcestershire contributes 20% to this.  Horticulture uses 3% of the land but contributes 20% of the region's agricultural output employing more than 6,000 people in primary production (plus 7,000 part-time employees mainly in planting and harvesting) and nearly 7,000 people in processing, packing and distribution.

It is an important sector, particularly in some parts of Worcestershire, notably the Vale of Evesham, but elsewhere as well.  However, there are concerns about whether the price growers would receive would be viable and about the ability to compete with imports.  It is a complex market, with about 60% of produce going to supermarkets but the other 40% going through wholesale markets to smaller shops, market stalls and the catering trade, and through other intermediaries.

What was striking was that there was little sympathy for the troubles of Tesco that were in the news on the day of the conference.  Once again there were references to supermarkets squeezing farmers and growers on price, and particularly on special offers where it is the grower who bears the mark-down.  Although there is a bill going through Parliament to replace the supermarkets ombudsman with a grocery trade adjudicator there seemed little expectation that much would change.

Whilst it seems there is more to Tesco's travails than getting their current price-cutting campaign wrong, if I were selling to them I would be careful about smiling at their expense, as no doubt if it is thought that different price cuts or vouchers or offers are needed they will not be entirely at Tesco's cost.

The comment on their results and the other news on a wide range of retailers who are struggling, including those that have gone into administration, as well as many high streets that are looking threadbare suggests there are changes happening in retailing more generally.  Tesco's problems may be about customer service and stock availability as well as price, which ought to be relatively easy to fix, but there has also been discussion particularly about their large out of town 'Extra' stores and the wider range of goods they sell.  It has also been suggested that Tesco might slow down the rate of store openings as we must surely be reaching saturation point for retail space.  It will be interesting to see what effect the imminent opening of a new large ASDA along with the other shops, cafes and the like, near to Worcester city centre will have particularly in the present economic environment.  There is a rumour that a department store will be moving over there and one wonders about the effect on the presently very resilient High Street and surrounding area.  I am not suggesting the effect will be anything like the same, but the movement of the centre of gravity of Kiddderminster town centre with new development has had a significant effect on older parts of the area.

And all of this continues to raise the wider question about the need to shift our economy from consumption to production that I alluded to on 13 December last year.  Is there something inherently better in producing than consuming?  I mean this in the context of what gives meaning to our lives (I know there are many other things that give meaning to life as well) but creating and 'giving' are better that consuming and 'taking' - particularly for its own sake.  I acknowledge also that people work for many reasons other than to be creative and that there can be a strong strand of necessity to keep body and soul together as well as instrumental reasons - we get satisfaction from the rewards that work can give us.  I'm also aware that work is not always easy or rewarding, and we are reminded of this in the creation stories in Genesis that those of us who say morning prayer have been reading over these past few days.  Given this is a reflection of the hard labour of early agriculture, it was interesting to hear repeated again at the conference where I began, the difficulty of recruiting local people willing to do the hard work in the fields for modest pay for the harvest as compared with seasonal workers from overseas.  On the other hand, it was stressed several times that there is actually a worthwhile and rewarding career to be had in the horticultural sector for those willing to obtain the qualifications and gain the expertise.

I accept that in what I was saying above that I may be comparing the best of production, where work can be positive and creative with the worst of consumption, where it is for the satisfaction of wants in and of themselves rather than for the perfectly reasonable acquisition of the necessities of life and reasonable things that give pleasure.  Nevertheless, I don't think the human spirit is best served by a minimum of labour (in whatever form, hand or mind) and a maximum of leisure and acquisition.  But given that the resources and capacity of our world are finite, this does raise the question of just how much production we need.

Interestingly, Keynes who found the red in tooth and claw nature of the market system rather sordid, wondered about the time when people might decide theyEcclesiasticus (38:24 - 39:11), though Keynes was not particularly religious beyond the conventions of his day.  Rather he followed in the footsteps of the early 20th century philosopher GE Moore and was also famously a member of the Bloomsbury Set and later a patron and promoter of the arts and culture.  Apparently, he calculated what he thought would be a sufficient income to live comfortably without the need to continuously want more and posited that we might achieve that in the UK about now!  There is much that could be said about why we do not feel that way (and I have previously written about this but unfortunately not in places that are easily available online), though I note in addition to newspaper articles and his 'Keynes: The Return of the Master' (2009), chapter 6, that Robert Skidelsky, Keynes's leading biographer, is writing jointly with his son a further book on this subject entitled , ’How Much is Enough?  The Economics of the Good Life’.  It will be interesting to see what this contributes to the wider debate.             

What if the Debt can't be Repaid?

When the crash hit us in 2007/8 the great confidence that somehow we had found the way to keep the economy stable and in equilibrium (abolishing boom and bust) according to neo-classical theory was replaced by a Keynesian rush (as Nobel Prize-winning economist, Robert Lucas said, 'Everyone is a Keynesian in a fox hole') of fiscal stimulus to try to keep economies going.

There was also a huge bail-out of the banks.  Some of this was done by governments in cases like RBS and some by central banks.  According to Nouriel Roubini and Stephen Mihm in their 'Crisis Ecomomics', because Ben Bernanke, the Chair of the US Federal Reserve, had studied the Great Depression in the 1930s in detail and was determined such a crash should not happen again, he authorised the Fed to buy up huge quantities of distressed commercial bank's assets to prevent them from failing.  A similar policy was carried out in the UK and many other countries.  The result is that many central banks have large quantities of assets of unknown quality (that's why nobody else would buy them) on their books which they have yet to try to dispose of - which is worrying.

Once the immediate crisis passed, normal service was resumed in the economics profession and the monetary theorists insisted that the public sector debts that had been accumulated must be reduced, largely through austerity programmes of either raising taxes or cutting spending.  This takes money out of the economy and as the private sector has failed to respond to this removal of 'crowding out' by growing and employing more people we continue to struggle.  I say this not to be political, as there is not a great deal between government and opposition policy in real terms behind all the rhetoric, but many Keynesians would now sadly say, 'I told you so' - and I feared as much in an article I wrote in early 2010 for the William Temple Foundation website.

One of the criticisms that has been made of the Keynesian position on which I based that argument  - that by providing stimulus we enable the recovery of economic growth quicker - is that unlike the 1940s, when the deficit was much bigger because of WW II, the US economy is weaker and in long-term decline.  It is no longer the powerhouse of the world economy and able to overcome such deficit spending so easily.

So if neo-classicalism can only heap austerity on austerity and the amount of debt we already have makes Keynesian fiscal stimulus difficult (of course, if we had followed true Keynesian counter-cyclical theory correctly we would have accumulated a large surplus in the good times to cushion us now - but we believed the good times would never end) then what might be the alternative?  The thinking of Hyman Minsky and his financial instability hypothesis is gaining some interest (see Martin Wolf in the FT - it is possible to view a limited number of articles a month free).  This is an extension of the theories of Irving Fisher, whose debt deflation theory was an alternative view of how to analyse and get out of the Great Depression of the 1930's.  The Australian economist Steve Keen is the current leading proponent of this theory and has recently published a book entitled Debunking Economics.  I had hoped it would expand on his debt deflation theories but apart from one chapter most of it is centred on destroying neo-classical economics.  (He says he has taken out the diagrams for the benefit of the ordinary reader - though you can download them - so they don't suffer from something I'd not heard of before, but have struggled with sometimes, called MEGO - My Eyes Glaze Over!).

Given the huge overhang of debt we still suffer from that I alluded to in a previous post (13 December 2011) I wonder if the kind of solutions suggested by this theory may come to the fore in some places where the levels of debt are extreme and may become un-repayable.  The graphic in the link suggests that you are damned if you do (do austerity) and you're damned if you don't (and the markets take fright).  This question is sharpened by the news as I write that as well as France losing its AAA credit rating with fears about the effect on the EFSF bailout fund, negotiations between Greece and its private sector lenders over the 50% 'haircut' on its debt required to secure the next tranche of bailout money have broken down.  If Greece (or indeed other EU countries like Italy or Spain) eventually defaulted in an 'uncontrolled' way the consequences for their peoples would be catastrophic and very serious for the rest of us.

However, in the last paragraph I've fallen into the trap of the obsession with government debt when a significant part of the problem why demand is so weak in the economy is because private individuals and other parts of the private sector are also up to their eyeballs in debt.  Given that the household sector in particular is debt-saturated and any short-term increase in credit to them to stimulate demand will only lead to a cycle of deleveraging again, Keen in his book (p. 354) suggests what in some eyes would be controversial: the unilateral writing-off of debt.  He reminds us of the concept of Jubilee in ancient societies.  Christians are familiar with the Biblical concept; he speaks about Mesopotamia in 2,000 BC and Babylonian expectation of extortionate interest which became unsustainable for the economy as a whole.

Clearly there are parts of our economy where interest is extortionate, but Keen is thinking in the modern time of sub-prime loans where the lenders wrote loans when they knew - or should have known - that borrowers could not repay them.  In general terms the writing off of debts goes strongly against the grain of capitalist society, where paying off your debt is seen as a social obligation, but this perhaps raises the question against the rich and powerful of whether all of the responsibility of indebtedness lies with the debtor.  Those lending the money must also act responsibly.

This perhaps brings us back to Greece and those who may have to take a 'haircut' on their loans to the Greek government.  No one would deny that there is much that is dysfunctional about the Greek economy and parts of its society too.  One might say the same about some aspects of other southern European countries too.  And whilst Germany famously buckled down in the early 2,000s and cut costs and has held down wage costs to maintain competitiveness whilst southern Europeans are said to have had a ball with the relaxed credit conditions within the Euro, none the less the north Europeans were quite happy to recycle the money they were getting for their exports back as loans to enable the southerners to buy more of their goods.  Should not the burden for the crisis now taking place in the Euro-zone be apportioned more equally than the severe rectitude that is being enforced by those who hold the power?

Whilst Jubilee in the Old Testament was about putting people back on an equal footing to where they started, Christians might also have some things to say about forgiveness and reconciliation that is not just about wiping away mistakes as if they don't matter.  Within forgiveness and reconciliation there is a learning process, perhaps on both sides (one thinks of the parable of the prodigal son in Luke 15 vv 11-32) and perhaps there might be some humility on each side too (e.g John 8 vv 1-11) but note that Jesus tells the woman to go and not to sin again.  Forgiveness is not a licence to carry on as before but to transform one's life and particularly in the Christian tradition seeing God's love for us and wanting to emulate that.

We also know that we are flawed people and change takes time, and so change to individuals' circumstances is more complex than simply writing off their debt, similarly structural changes in countries will take time too.  But perhaps as in the case of the Jubilee 2,000 debt campaign that enabled the writing off of much of the un-repayable debt of developing countries and allowed them to redirect their economies into providing better education and health care, some form of jubilee now could be similarly transformative if we can take a more creative view of our economic relations than them simply being about narrow financial obligations.        

           

Re-imagining the Economic and Social order – but what might it be based on?

In recent weeks I went to a seminar in London organised by the think tank ‘ResPublica’, entitled: ‘Reclaiming Capitalism: A Renaissance of Ethical Markets?’ and have read the books ‘Ill fares the Land’ by Tony Judt and ‘Christianity and the New Social Order’ (to mark the 70^th anniversary of William Temple’s original ‘Christianity and the Social Order’) by John Atherton, Chris Baker and my former colleague, John Reader.

I am struck that in various ways there is a similar critique of where we find ourselves as a country/society in each.  That somehow we have ended up over the past thirty years in a situation where economics has become the central determinant of all judgements – not that we ask any more, ‘Is it right?’ but instead, ‘What will it cost?’

We have also ended up with an atomised, individualistic culture where freedom is the value that trounces all others.  We know this isn’t really a true description of how people operate.  As John Milbank, one of the speakers at the seminar said, people are not abstract; they have attachments and work through trust.  Giles Fraser, also at the seminar, said we need to have a basket of values and to realise other obligations and constraints that provide benefits for people.

Judt charts the rise and demise of social democracy over the past century.  He sees the moderating role of the state upon capitalism, both as provider of those necessary things that don’t have a simple market value like public transport as well as a universal welfare safety net to ameliorate the worst excesses of the market.

He is perhaps better at somewhat polemically setting out, as he sees it, how we got to the place we are now in than how and what we should be striving for to reach the better place he would desire.  ‘Christianity and the New Social Order’ is much more prescriptive and sets out seven guidelines as a suggested programme based on Temple’s original middle axioms.  These are: The flourishing of every child; the commitment to education as lifelong learning for all; the development of health as personal and communal wholeness for all; the fostering of delight in the environment or whole created order, paying unequivocal regard to its intergenerational sustainability; recognising the continuing importance of income and work for personal and national wellbeing; developing financial systems to deliver and support greater wellbeing for all; pursuing greater equality as essential to the pursuit of greater wellbeing.   

The book goes to some length to not only be ecumenical in the spirit of William Temple, but recognises inter-faith concerns and indeed to goes further, distinguishing intra-disciplinary working that separates Christian or faith-based thinking from other disciplines such as the social sciences, and seeking to be inter-disciplinary.  Having spoken to John Reader about the book I understand that it was agreed with the publishers that it was to be written for a more secular audience, so it may be that in attempting to put forward inter-disciplinary ways of working there is a risk that it moves away from the Christian rootedness of what it purports to represent – Christianity and the New Social Order.  Therefore, the criticism of Peter Selby, former Bishop of Worcester, in his review in the Church Times, isn’t necessarily fair that it doesn’t examine in any serious way nor connect to its recommendations the Christian concepts it from time to time mentions.

And whilst Judt, hardly goes much deeper (as a secular, atheist Jew, he rejects religion as being marginal even in the US where he lived), he does say, ‘We are all children of the Greeks ... Natural Aristotelians ... we assume that a good society is one in which people behave well.  But in order for such an implicitly circular account to convince we need to agree on the meaning of ... well.’  He continues, ‘What we lack is a moral narrative: an inherently coherent account that ascribes purpose to our actions in a way that transcends them ... we need the language of ends not means ... we ... need to be able to believe in [our objectives].’

One of the frightening things that comes from reading the sweep of history as Judt sets it out, and in some of his warnings, is how we are in a similar situation to both 100 years ago before the First World War, when leading people could see the events coming towards them could make no sense, as well as the inter-war period, where the chaos and desire for safety and certainty led to totalitarianism.  What we are lacking is a vision of the future, that may well lead to programmes, but which needs to be based on a depth of philosophy and theology, whose workings can be seen for those who want to, that will lead us from our present despairs.

In some ways prescriptions are easy, there is no shortage of commentators on, for example, economics (Peston, Stephanie Flanders, Paul Mason at the BBC, Martin Wolf at the FT, Anatole Kaletsky at the Times, Larry Elliot at the Guardian, etc.) and writers behind them, most of whom focus on means but sometimes ends too.  But whilst there are many writers of Christian doctrine I am not sure who is making the connections between the two fields.  One answer seems, from recent discussions with friends, some of those from the school of Radical Orthodoxy, led by Milbank.  But a recent exchange in the ‘Church Times’ (for those who are Anglicans) suggests that not everyone is comfortable with their attempt to re-invent a kind of Christendom model to re-conquer the nation.