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In the last few years, Labour has struggled to establish a distinctive approach to economic management, as the Conservatives ran deficits and accumulated debt at a rate even the most free-spending of Labour chancellors could only dream of. They even contemplated raising taxes. But now, the Conservatives are taking a clear bet on trickle-down growth. As Labour meets in Liverpool, it has a chance to spell out the opposite perspective, of promoting a thriving ‘everyday economy’. A special collection of articles in the journal Political Quarterly aim to spell out what this might mean in practice.
Trickle-down theory says that government policies should favour cutting-edge high-return sectors such as finance, promoting them by easing regulations and allowing those with talents for making megabucks to keep a large share of their gains. The government should pick winners, favouring them with investment incentives and tolerating the likelihood that some of its bets turn out badly, even though the costs are borne by the taxpayer.
The everyday economy approach says that the government should create the conditions under which ordinary people can lead decent lives. Many will flourish, and widespread small-scale flourishing is more valuable for building thriving communities than a thin trickle of wealth from a few square miles of central London. The foundations of everyday prosperity are decent jobs and a good supply of services in sectors that meet everyday needs for housing, food, health, care, education and social life.
The government has some well-established instruments for promoting the everyday economy, but the special issue proposes some new instruments too. Health, care and education need more spending, but they also need a shift of policy towards ensuring that these sectors can fulfil their foundational role by providing secure jobs with training opportunities and career paths, and doing away with the cut-throat uncertainty of competitive contracting and agency work. In the food economy, the influence of big business is all too evident in the failure to adopt policies that would promote healthy and sociable food production and consumption. Again, this means paying attention to the lives of those working in the sector, with its ubiquitous gig economy workers and ghost kitchens on industrial estates.
But the key contribution of the everyday economy approach, as promoted by Julie Froud, Karel Williams and their collaborators in Manchester’s Centre for Research on Socio-Cultural Change (CRESC), is to go beyond wages and working conditions to look at how people gain access to the services they need. This means looking more closely at how people (have to) spend their money on rent and energy costs, as well as their access to services which are free at the point of use. It means thinking beyond individual (‘private’) consumption to the conditions of life which we experience collectively, in the use of high streets, parks, roads and public transport. It also means thinking about sociability and community action in relation to food, as Colás and Edwards argue in their contribution to the collection.
Local governments up and down the country are putting everyday economy ideas into practice, as Lanning and Laurence show in their discussion of initiatives in Barking and Dagenham. Local governments face unprecedented financial pressure, but they have other collective organisational resources which they can bring to bear, for example in promoting better employment conditions and leveraging planning powers. Environmental controls can improve public health and save lives, with myriad consequential benefits in the everyday economy. As the Conservative government winds itself up for yet another attack on planning, it is time to speak out about the work being done by local governments under Labour control and make them part of the vision for a future Labour government at Westminster. It is not only good economics to pay attention to the everyday economy; it is also good democratic decentralised politics.
The CRESC team use the term ‘liveability’ to shift the narrow focus of conventional economic discourse beyond wages to living standards. Anna Killick cautions against abandoning conventional economics in talking to voters. They may deny that they understand much about the economy, but they want politicians to be clear and confident in what they say about economic policy. But the cost of living crisis has made it clear that Labour has to address the key things that make for liveability, even if it doesn’t embrace the term. For instance, the party was ahead of the Conservatives in realising that the energy market could not be left so weakly regulated that it could destroy living standards, but price caps are just a temporary solution. In this as in other areas, Labour might think of securing basic access with a social tariff, while looking to curtail activities of the wealthy that lead to wasteful high use (like private swimming pools, perhaps?) by levying higher prices beyond the base level.
These articles are just the first to be published in a special collection that will explore all aspects of the everyday economy, with further articles by Christine Berry, David Edgerton among others. The everyday economy approach is likely to become one of the dominant challengers to trickle down economics and it will be interesting to see how much support it gets, whether implicit or explicit, from the Opposition parties.