Wednesday, 18 February 2009

Fair, green and local

Emma Rothschild documents, in searingly succinct fashion, the changes that the US economy has seen since the 1970s. For US, read the UK.
The US has become more unequal since 1979, in income and amenities. It is less industrial, with only 9.6 percent of people employed in manufacturing in 2007, compared to 20.4 percent in 1979; more open to imports of goods and services, with imports accounting for 17.2 percent of GDP in 2007, compared to 9.9 percent in 1979; and more capitalist, with 7.5 percent of people employed in the private sector members of unions, compared to 21.2 percent in 1979. It is more feckless, with savings accounting for 0.6 percent of personal income in 2007, compared to 8.9 percent in 1979. In what Lawrence H. Summers has called the "new age of markets," it is also a richer country, of "market-led growth" in information and (until 2007) in financial services. The automobile industry has been one of the losers in the new American economy. US consumers spent less on new automobiles in 2007 than they spent on "brokerage charges and investment counselling"; in 1979, they had spent ten times as much.
This is the new economy. It has just collapsed. Ms Rothschild goes on to suggest a massive investment in local transport infrastructure with a view to making the car a luxury. At the core of her analysis is the need to combat transport inequality as a factor in wider inequality. The greening of the economy will have to match fairness with carbon reduction.

While it may be too much to expect every city to achieve the same as the zero-carbon planned Masdar City, both social justice and the environmental challenges we face demand a massive upgrade of our public transport infrastructure. From a social perspective, this will have huge benefits also and it will start to chisel away at our privatised lives and re-create notions of community that have been so damaged in recent decades.

Simon Jenkins repeats his insistence today that resources and powers over resources should be shifted to local government. Why not link the two things? Free Councils to raise finance through Business Rates and Council Tax, set them a target of reducing car journeys originating in their area by 2% per year and carbon emissions by 2% also and match any investment they make in public transport? You watch as green thinking spreads through every aspect of a Council's actions: its own services, education, health services, public transport provision, and planning spring immediately to mind. Moreover, the Council would be incentivised to generate a discussion about the way we live and that in itself would have an impact.

There we are: localism, fairness, and a cleaner economy at the same time.

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