Sunday, 14 September 2014

Too small to matter?

Earlier this week a note was sent to all the usual broadcast media.  That I am aware not one has commented or picked up on it. Just today I came across a piece from the other side of the world that gives a very interesting  light on the contents.

Jersey Organic Association 
“Small changes, big difference” is the slogan of the Soil Association's Organic September campaign. It is ironically appropriate to the organic market in Jersey, for both consumers and producers. The recent proposal from the Environment Department for ongoing support for organic producers most definitely feels like small change.

The payment offered to the producers is £11 per vergée split over 2 years. To qualify, the seven or eight local producers will have to be organically certified and supply accounts. Soil Association certification costs a minimum £400 per year for a licence, and accountancy costs would probably be more. For a number of those growers, the payment over two years won't even cover the licence for a single year and for the smallest the payment works out at less than £1 per week. In Germany and France, annual maintenance payments for organic producers can be 900Euro per hectare, approximately £100 per vergée .

For consumers this is also a loss. There are many varied reasons people choose organic, but concern for the environment is one. Many of us want local produce, knowing it has been grown to the best standards of protection for our own wildlife, environment and biodiversity. Already we are witnessing a decline in the area of organic land in the Island. There will be consequences to the continued neglect of this part of our economy. I predict that two of the local producers will have either given up organic status, or possibly left farming altogether, by the time the policy is reviewed in the Rural Economy plan of 2016. That would leave local consumers with less choice.

A small change making a big difference indeed, in the wrong direction.

Mark Forskitt

Chair, Jersey Organic Association

I should clarify.  I don't qualify for any of these payments.  My land is organically certified, but I am not considered commercial, and do not qualify.  Obviously I am not one of those who might go out of business as I am not technically in business to begin with !

A couple of smaller growers going out of business won't make much of a dent on the size of the economy, it wont affect tax revenues much.  But just how far are we prepared to see one of the few legs of our our economy wither?  How much choice are we happy to see removed from the local population.

Here's the contrast  Hong Kong has numerous parallels to Jersey.  It is one example of where we might very well end up if we continue with  growth and eating away at green zone and agricultural land.  They had a problem with farming becoming non-viable in the face of land prices and wages from the burgeoning financial economy.  "By 1980, 40 percent of farmland in Hong Kong was reported as abandoned and rice paddies made up less than one percent of what was in use. Today, a total of just seven square kilometres (2.7 square miles) is actively farmed." That's out of a total of 426 sq m, a touch  under 10 times the area of Jersey.

"But the number of organic-style vegetable farms has increased from a handful of trailblazers in the 1990s to several hundred today -- of which 130 are certified as fully organic.

While still flown in to the semi-autonomous southern Chinese city, homegrown organic vegetables now make up 12 percent of the 45 tons of vegetables the city produces daily." How does that compare with us?  Who's looking to our future, our food security, our land and ecology?

Thursday, 11 September 2014

Say when.

I did not have an invite to attend the Chamber of Commerce pre-election debate. Doubtless my views on growth would have been most unwelcome at an event billed 'How do we promote growth? What are the implications? What are the Social and Environmental impacts? ' Did you spot the underlying assumption?

The chamber are not alone in this. If you have a spare £75 to attend the Institute of Directors annual debate, you can be enlightened by an esteemed panel on 'Should Jersey Relax Its Immigration Policy?; which goes on to ask 'what sort of impact a relaxation of immigration volumes would have on island life, and how a policy might be articulated that balances the needs of businesses, economic growth and islanders'. See it's there again.

 Politicians do the same. This is from the Treasury minister's blog 'The treasury principles include..... Competition - property taxes should support the competitiveness of the economy and promote jobs and growth; '

 It is the sine qua non of Jersey government, the underlying unimpeachable, beyond question assumption: growth is good, desirable, the principal imperative.

Fortunately there was quite a good running commentary on twitter of the Chamber of Commerce debate. I was struck by a couple of the post event comments along the lines that there seems to be no way to resolve the problems. My logical head wants to point out what should be obvious when such a scenario arises : check your assumptions and review your constraints. Is it really true that growth is necessary, is it really the case that you need to increase the population to achieve growth? For many years I have held the answer to both of those questions is no. I find it of note that the view has gained considerable ground in the last decade, to the point where it is now possible to discuss it without simply being declared an economic ignoramus, or dangerous lunatic, possibly both.

 How does a concept like growth gain such an insidious hold on us, collectively? I think the answer is two fold. One part is in human psychology, the other in the nature of a society and particularly the experiences of those who influence and make decisions.

 In psychology related terms we have two well known observations. First, people tend to believe numerical evidence more readily than quantitative evidence, even though the latter might be better evidence Believe me, I was a research engineer, its true. They also like to have simple ways to rationalise and evaluate complex systems and data. It is far easier to point to a single measurable quantity such as GDP or GVA and see its value increasing as a good indicator, than it is to think through the interconnected web of resources and impacts. It is so much easier for a politician to sell growth than it is to debate the physical resource allocation that economics is really about.

 The second factor is that there are circumstances , not in government, where growth is almost always validly seen as good. It is not hard to grasp that for business owners growth is an indicator of success and unless handled badly (eg cash flow failure) is for them a desirable, enriching thing. Transposing that perception into government is easy, but it is incorrect. What is good for a business is not necessarily good for a society. A lot depends on externalities.

 A business is broadly in inward looking entity. Generally unless constrained by law, it is not concerned with what goes on outside of itself. Historically that lead to pollution and contamination problems as enterprises exported the waste and an external body picked up the costs of dealing with it. It is also the case that if a business grows by taking market from another and driving it out of business that is an externality. There is no cost born by the growing entity, but the tab for the resulting unemployment of former employees of the ceased business falls on the government. Similarly if a business decides to shed a stable but unprofitable operation in favour of a growing option, many of the costs are borne by society. Government does not have the same luxury. Civilized societies cannot simply shed 'excess' 'unproductive' people, any more than they can simply pollute their neighbours without consequence. Decisions in government are different from those in business, with different constraints, objectives and consequences. It is much more a zero sum game than for a business. Assumptions that are workable , even useful, in business are potentially a hindrance when applied to governance of a society.

 Organisations like the Chamber of Commerce and Institute of Directors promoting growth comes as no surprise in the light of the above. Of course we have many people of a similar background in the States. I have even heard people state that we need a States composed only of (successful) business people! What a disaster that would be; we already have a dearth of scientists, philosophers, artists etc to give a balance of outlook and experience.

 The inappropriate transference of the concept from business to government is not the only problem with growth. There are many. I do find it irritating when the term is used as some vague expression almost like a magic potion that when swallowed will simply make things better. What such people often mean is they want the expected and desirable results of economic growth , such as higher employment. Economic growth doesn't necessarily mean that will happen , it is quite conceivable of a situation where one has growth and fewer employed people.

 How growth is measured or determined is a further issue. Typically gross domestic product or some derivative of that is used. It is a measure of size, but it is crude. All paid activities count positively to size, even when they are clearly destructive in nature. Car accidents are a good example, obviously undesirable, but making a contribution towards GDP. David Suzuki has another example: that a corporation polluting a river. If the river has become polluted, an expensive program will be required to clean it up. Residents might buy expensive bottled water rather than cheaper tap water. Suzuki points to this new economic activity will raise GDP, and though the GDP has risen overall in the community the quality of life has decreased.

Third in my concerns over the use of growth as a measure of success or progress of a society is that it is significantly correlated with resource consumption. Logically when dealing with finite resources there has to be a limit to consumption, growth only hastens the depletion. I believe we are rapidly approaching a strongly resource constrained world, be it agricultural land, fresh water, oil or wood. We have faced single resource depletion before, such as whale oil, but to face several occurring concurrently is beyond humanities experience. Of course not all activities entail much, if any, material consumption or waste production. There is one hopes no limit to love, compassion, art , knowledge or understanding. It is a concept so important that it has its own term – sustainable development

 There is also a philosophical point about growth that really needs to be made. I observe that we live in an age of immense material wealth compared to any other in history, at least for us in the 'developed' world. So wealthy that we discard more useful resources than most have ever had available to them. We have a society that frets and consumes resources to treat the symptoms of overindulgence, especially in health care. There is surely a point where our material appetites are satiated. There is a point, I hope, where we realise we do not need more stuff, we don't even want more stuff. It is more possible than most realise. If you find it hard to believe, and you might want to look up the Endowment Effect eg

I have a simple question for those who want more growth. What is the criterion, the point at which we have grown enough? I have asked it numerous times of those who espouse growth and growing the economy , and never yet heard a solid answer. That ought to indicate something. The implication frightens me.

Monday, 1 September 2014

Utterly incomprehensible ineptitude

I am astounded that two director level staff from the Health department have been drafted in to collate evidence for the , ahem,  'Independent' CoI.  One of the two is a witness, the other probably should be.  That ought to be enough to rule them out. I cannot figure how anyone in their right mind could think that two people  from the department that back in June tried to deny  the CoI documents and only complied after a summons could in anyway be the people to do this sort of thing.

The very best spin you could put on it is that someone has been very inept thinking about how this presents to the world.  The alternative: there is something explosive to hide and someone is doing their level best to try keep it buried.

Juvenal had the right question.  Quis custodiet ipsos custodes?