Battle of the systems 2: how change can come quickly, if we want it to

In an earlier post I described how progressive policy proposals such as UBI, land reform, sovereign money and alternatives to GDP are resisted by the current market-driven system in a process that a recent RSA research paper calls, in a slightly different context, a “system immune response”. However, although individual proposals may easily be suppressed by a prevailing system, history suggests that entire systems can change, and can do so quickly. 

By the end of the 1980s the UK economy was fundamentally different, not just in form but in concept, to that of the preceding decade. This change did not just happen; it was a deliberate piece of policy engineering in which reforms were designed to support each other in an integrated structure. The result was to shift the basis on which all economic decisions were subsequently made. 

To see how this works, look what happens when today's progressive economic reform proposals are strategically connected. Housing and UBI are closely linked, as we have already seen. The high cost of housing pushes up the level at which a UBI is effective, while the additional income could add fuel to an inflationary housing market. Match UBI with truly affordable housing, however, and the two policies support each other in a synergistic system. 

Add sovereign money and banking reform to the mix, and that system becomes progressively stronger. Between them they provide the tools to manage the asset depreciation that a significant affordable housing programme would trigger. Instead of attempting to reflate the property market, the state would acquire housing debt, write off the land cost element and convert open-market property into its low- or zero-land-cost affordable alternative. 

In this emergent system banks can only lend money that they have. By acquiring land-cost debt the state would liberate banking resources, which, in the absence of speculative property, would be directed to truly productive investment. Previously over-indebted home-owners would see an increase in their disposable income, which would also support the productive economy. 

Central to all these issues is the way we value our productive output. UBI gives people time to do productive work that may be unpaid, including self-education, creative and entrepreneurial activity and caring for the young, sick and elderly. In the current system no value attaches to unpaid work, so UBI may reduce rather than increase production in money (GDP) terms. 

The “beyond GDP” agenda, promoting alternative measures of productive activity, is a key ingredient of the emergent system. The UK's unpaid economy is well over half the size of the money economy, and because it is performed willingly and freely it is likely that unpaid activity is among the most truly productive (i.e. useful) work that people do. Measuring this as part of national output makes UBI a powerful agent of useful economic growth. In policy terms you get what you measure: by measuring good outcomes rather than money turnover the way is opened up for a wide range of economic policy initiatives to improve the quality of people's lives. 

Out of a bundle of individual policy ideas an alternative system can be seen emerging, with a coherent, integrated structure that allows it to challenge the prevailing system of neo-liberalism.

For decades campaigners have assumed that change is an evolutionary process, to be built incrementally by attracting support for single issues and specific campaigns. But, as James Callaghan observed in 1979, change can come suddenly. “There are times,” he noted, “perhaps once every 30 years, when there is a sea change in politics. It then does not matter what you say or what you do. There is a shift in what the public wants and what it approves of." 

Thirty years after 1979 the crash was in full swing, so it is no surprise that people are wondering when the sea change that the crash seemed to presage will materialise. Many of the factors that could bring it about are already in place. Confidence in the existing system is low. The housing market is acknowledged to be broken. People in once-secure work such as nursing rely on food banks. In the US, many workers have had no pay rise in 40 years and the UK is headed in the same direction. Most importantly, just as the ideas that shaped neo-liberalism were deliberately propagated at least since the Powell memorandum of 1971, there is now a large worldwide network of academics, social entrepreneurs and campaigning bodies all promoting the components of a new political agenda for economic and environmental wellbeing. 

If the next sea-change is to happen, all these specific research and campaigning objectives must identify themselves as components of a wider project for systemic change. It is a project that starts with a coherent set of messages that ride above the narrow debates that pass at present for political engagement. 

Neo-liberalism was propagated through the four messages of individual freedom, strong defence, open markets and small government. These were not new ideas, but established principles that combined in the post-war period to distinguish Western liberal democracies from repressive, centralised regimes. In co-opting them in the commercial interests of capital-owners and investors, neo-liberalism gave them a particular spin. “Individual freedom” means the rights that derive from ownership; “strong defence” favours the military-industrial complex; “open markets” permit winner-takes-all exploitation of people, resources and the environment and “small government” means low taxes and light regulation on business. 

If progressive reformists are to resist the immune response of the current system, their best strategy may not be to reject these messages outright, or to propagate new ones. It may be much more effective to reframe them in support of an inclusive and sustainable economic system. For example: 

Individual freedom depends upon having the space in which to exercise it. People need homes to live in, access to the resources that permit them to work productively and time in their lives that is not devoted to drudgery or financial subsistence, otherwise they are slaves to the system and not free in themselves. 

Strong defence need not be a question of guns and aircraft, or not primarily so: it is rooted in a resilient society built on mutual support, shared interests and economic and environmental, as well as physical, security. A fractured society cannot hope to defend itself effectively, not least because it has lost touch with the values it is seeking to defend. 

Open markets are accessible markets - those in which people are free to participate on equal terms to their shared benefit. At their most effective they connect producer and consumer as closely as possible, minimising the transactional costs extracted by intermediaries. 

Small government means the primacy of personal autonomy, placing authentic human relationships at the centre of the social system. It means cultivating an administrative state that empowers human personality while reducing the influence accorded to corporate and institutional entities. 

Most people want a fairer, less destructive economy, better able to sustain human and planetary wellbeing; and yet many seem resigned to the inevitability of the current system. Resignation is an immune response, which individual, palliative ideas cannot overcome unless they work together as part of a coherent system. To achieve this, reformist thinkers and activists should embrace the systemic coherence which connects them, and start to tell their system's story using established themes and principles that people already understand.