Archive for the “Economics” Category

This is something I’ve been thinking about a little bit recently and today it was reported in the Evening Post that 20% of shop units in Bristol are currently empty so it seemed like a good time to question whether the high street is still a relevant space.

As I’ve tried to shop a bit more ethically (whatever that means) over the last year or so, I’ve noticed that by far the majority of my spending now takes place online. Like the average yuppie male that I am, a fair percentage of my spending is on books, music, films and electricals. These are pretty much always cheaper on Amazon or eBay than on the high street (eBay is great for 2nd hand books btw).

I spend money on clothes which I always resisted buying online due to wanting to try things on but as I’m trying to be more ethical in that, the high street is less helpful there too – Oxfam’s online shop, eBay and small ethical brands have been the solution there. I’m probably in a minority here but even shoppers who do buy clothes in person (off-line) increasingly want to do it in a dedicated area with convenient parking, minimal distance between shops and a food court like Cribbs or Cabot Circus rather than pound the high street.

For the other major regular expense – food – it’s now much more convenient to go to an “out-of-town” supermarket where you can park your car for free or increasingly convenient to do it online and have it delivered to your door.

What, then, is the high street for if it’s no longer the most convenient place to buy clothes, food or anything Amazon sells?

Well I would say we can already see the future to some extent in Bristol – the success of Cabot (97% occupancy since opening) and the minor revival of the wider Broadmead that this and a monstrous Primark have brought has seen our more linear high streets (Whiteladies, Park Street, Gloucester Road, etc) increasingly filling in the gaps with yet more coffee shops and mini-supermarkets.

This is not in itself a problem (unless you don’t have a car or a computer) but presumably with our consumption habits moving away from the high street, we are inevitably going to find that there are just too many commercial units to fill profitably. This raises a couple of questions – How many coffee shops can one high street support? and, assuming that not all units on a high street will be filled with coffee shops and restaurants, what do we do with the remaining units?

As we have seen to some extent in Stokes Croft, empty shop units can be seen as an opportunity for the community to reclaim them and use them productively if not profitably (though this requires landlords to be cooperative). With all of us increasingly disconnected from our neighbours is there a way we can sustainably turn these empty units into spaces that foster communities? Or is that just another coffee shop?

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In part a response to a comment Matt posted over here but also a distillation of my current thoughts about the way I spend my money.

I’ve thought a fair bit about the “big issues” of the world over the last year. We can see that things can be better and often how we might collectively get there with sufficient and coordinated “buy-in” but it’s that first hurdle that seems the hardest to get over.

We often feel defeated by the inertia of the status quo – that my small change will make no difference – but then I end up coming back to “the ocean is made up of drops” or, if you prefer Ghandi, “almost everything you do will seem insignificant, but it is important that you do it”.

Right now I have resolved that I can’t change the world but I can change myself so these days I try not to worry too much about whether my sacrifices are insignificant in the grand scheme of things and just focus in on each of my little purchasing decisions on whether there is a practical “path of greater love” that I can take rather that the obvious or conventional choice.

For example, not travelling anywhere ever is probably the “greenest” option (the “path of greatest love” perhaps) but assuming I find it unacceptable not to go on a foreign holiday, can I make decisions that are less harmful. I suspect that flying is probably damaging for the environment so if I can practically take a train then why not?

Or, I have enough clothes to keep me warm and dry but assuming I’m going to buy a new jumper can I buy fairtrade/organic or better yet second-hand from a charity shop. Being someone who doesn’t enjoy the thrill of the chase that some people get traipsing around charity shops, I’ve become a big fan this year of Oxfam’s online charity shop.

I suppose then it comes down to my definition of what is practical. For me it is practical to spend more time or more money on taking a less harmful path but I am relatively resource and opportunity rich. If you haven’t had to walk for a few hours to get water today then you are too.

Sure my sacrifices may make no difference but all we can do is try to do something rather than nothing and not feel too bad when we don’t even manage that much – “I do the things that I don’t want to do and I don’t do the things that I wish I would” – this is human.

If I can learn to see things as they really are, understand the me and the us and the interdependence of the two, hold on only lightly to my possessions and let go of my feelings of entitlement then perhaps the sacrifice won’t feel like a sacrifice at all. How can you feel the loss of something once you realise it was never yours at all?

I totally agree with Matt that communities and social capital are important and that through these things we find our motivation to change. For me I find that in understanding that I’m just another human, another brother in the brotherhood of man (if that’s not too cheesy) but one who has more than most, and being separated from the hurt and suffering only by the geography of my birth, my identification with the “global community” motivates me to change and to give. I feel quite inspired by the idea that I can show love to someone I’ll never meet by ensuring they were paid a living wage for whatever I’m buying half way round the world.

Do I really think we as humans will ever get over greed and our need to out-do each other? I don’t know. I know I’m part of the problem – a bigger part than most if we look at the global scale. I see that as a generation we have a crisis of telos at this time – as Western civilization or at least British middle-class society a lot of us are a bit miffed – we don’t know where we’re going or why. Whether it was World Wars to fight, the dream of a hippie utopia, the “American Dream”, the 80s boom that was going to make us all rich or the 90s boom that was somehow different from the one in the 80s and was going to make us all rich, previous generations have had a plan for a better world (and revolutions to back them up) that I’m not sure we have right now.

I suppose it’s because we’re at a point right now where we feel that the system is broken but we don’t know how to fix it – that the train has come to a halt and we’re not sure whether we’re supposed to wait for it to spring back into life or get off and find our own way or even if the destination was such a wonderful place after all (or even existed).

With the access pipes to information and world news that we all now have in our homes, we’re perhaps more aware than any previous generation of just how complex the system is. Perhaps it is the awareness of this complexity that is starting to bring many back to a vision for our immediate physical communities – to the small and local, the sharing of life, getting stuck into the nitty gritty, the down and dirty of our hurts, our baggage, our imperfection, letting go of the façade of togetherness. Perhaps the new dream is for us to understand our connectedness to the people we pass on the street and in our day-to-days and to the people we never meet who make our clothes and grow our food whose hardship currently pays for our luxury. To understand that their loss is our loss and that through investment in the lives of others we build a community (local and global) that makes us richer ourselves.

I still have a long way to go. I’ve come to believe that ideals always make hypocrites of those of us that try to have some but I think it’s still important to try because our principles inform our journey by giving us an idea of where we’re trying to go what our destination might look like.

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Interesting development – Amazon are moving into groceries.

Apparently the market leaders Ocado have never made a profit in their 10 year history. I presume this is largely because of the expense of the distribution network which of course Amazon already have in place. At the moment it’s just non-perishable items (no meat or veg) but I presume they’ll need to invest in some refrigerated vans before long – I can’t see people bothering to order meat/veg/fruit/bread from Sainsburys/Ocado/Tesco and everything else from Amazon.

There’s still some work to do on the website too to get it a bit more geared towards the needs of food shoppers rather than book shoppers (ie a weekly shopping list).

Another of the strengths of the supermarkets is their own-brand, cheaper alternatives to much of what they sell. How will Amazon compete unless they have their own Amazon branded baked beans etc and perhaps their own even cheaper Amazon Basics/Value range?

All that said, I wouldn’t bet against Amazon – they’ve  gone from being just a book seller to being the first place I look for books, music, DVDs and electricals so why not food?

Another important question is whether they will keep the “buyer reviews” functionality for the food section. I look forward to reading people enthuse about a particular loo roll or packet of crisps!

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Why More Equal Societies Almost Always Do Better
Richard Wilkinson and Kate Pickett
11 May 2010, 19.30-20.30
St George’s Bristol

Peace and the Plundered Planet
Paul Collier
12 May 2010, 18.00-19.00
At-Bristol, Bristol

How Are We to Live?
With Sarah Bakewell, John Cottingham and Michael Foley
13 May 2010, 19.30-21.00
Arnolfini, Bristol

The Future of Capitalism
Will Hutton
24 May 2010, 19.30-20.30
St George’s Bristol

Pandora’s Seed: The Unforeseen Cost of Civilisation
Spencer Wells
26 May 2010, 18.10-19.10
Watershed Media Centre, Bristol

The Story of Stuff
Annie Leonard
26 May 2010, 19.40-21.00
Watershed Media Centre, Bristol

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Ann Pettifor writes the following on her Debtonation blog today:

The implications are clear. It took years – from 1929 until the 1940s – and a World War, before the US cleansed itself of the 1930s debt sludge.   Japan is still trying to purge itself of debts built up in the 1980s.  18 years after the Japanese ‘debtonation’ of 1990,  the economy is still  the weakest of all the OECD countries. Eighteen years after the property bubble burst, Japanese house prices are still falling!

Will it take 12-18 years for the US economy to recover, after purging debts equivalent to 350% of GDP?  On this reckoning: more than likely.

…and George Monbiot is saying what many of us UK taxpayers are starting to think on his blog today:

For the first time in my life I resent paying my taxes. Until now I have seen this annual amputation as a civic duty – like giving blood – necessary to sustain the life of a fair society. Suddenly I see it as an imposition. Its purpose has reverted to that of the middle ages: subsidising the excesses of a parasitic class. A high proportion of the taxes I pay will be used to bail out companies which, as the Guardian’s current investigation shows, have used every imaginable ruse to avoid paying any themselves.

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This is a response to John‘s post titled “We Need Radical Green Policies” in which he suggests that the way to make people live sustainably is to hit them in their wallets. This is a topic on which I have quite a lot to say!

I agree with John that the only way to persuade more than a minority of people to make material changes to the way they live is to make it expensive to be wasteful. At the moment sustainability for the common man is costly in both time (eg sorting your recycling) and money (eg taking public transport which usually takes longer and costs more than driving (except within London)). Given a choice between two options of equal cost where one is “greener”, I’m sure most people would choose sustainability. Unfortunately that isn’t a choice we are often able to make much at the moment in a world where the price we pay for many products does not reflect their true cost (I’m looking at you Primark) so we are used to paying prices that don’t factor in the long term environmental (or human) cost. In that environment, it is very hard for the sustainable option to be priced competitively.

Unfortunately, one big problem with making it expensive to pollute is that many of the ideas that are thrown about (such as increasing fuel duty) hit the poorest in society hardest (those that can already barely afford to heat their houses) while we, the middle class responsible for much of the problem, can afford to buy our way out of having to face up to the inconvenience of changing the way we live. Unlike John, the increasing price of petrol made no difference to the way I drove. Even at the peak of petrol prices, it was still a cheaper (and much quicker) way to get to London than taking the train and on a Friday night after work, I just want to get there as quickly as possible. As John says, his behaviour changed out of motivation to save money more than out of motivation to save the environment. For me the petrol price didn’t reach the point where my own personal cost/benefit analysis motivated me to change my behaviour to save either! I need to be incentivised just like everyone else.

As John implied, government policy on climate change all comes down to discount rates – how you balance the costs/benefits of action now with the costs/benefits of action later. For us, the benefits of convenient and cheap travel now will certainly result in costs down the line but, unlike in business, it’s very hard to estimate those costs and it will be someone else who pays the price anyway. For all the money parents spend on giving their children the best future they can through education, health care etc, we haven’t yet found a way not to steal from them by using up as many resources as we can from the pot that we share with them.

I’ll take this opportunity to recommend the New Economics Foundation. They’ve been talking for a while about a “triple crunch” – the financial crisis, climate change and increasing energy prices. Interestingly, at the moment the recession caused by the financial crisis has resulted in a reductions in energy prices but this will only be temporary. However, in the long run, as non-renewable fuel prices go up again (as they surely will being a finite supply in a market with demand growth that shows no signs of stopping any time soon) and as renewables technology is refined in efficiency and lowering cost of production, green electricity will eventually become competitive and then cheaper in real terms (ie excluding the green subsidies).

Hopefully this will be the case in other areas where we need to move towards sustainability too (manufacturing, transport, water supply, etc).

Through innovation in policy and technology we need to make saving the world not only possible but easy!

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