Saturday, 10 September 2011

Follow the money

Speech delivered to the Plaid Cyrmu conference on a motion about the Welsh economy.

The world has become a very different place since the global banking crash. 2008 saw catastrophic system failure and unsurprisingly, it's those who can least afford it who are now being asked to pay. It's clear that we can't go on in the old way. Capitalism is broke. The market has failed spectactularly and new thinking is needed if we are to get out of what is a very big mess.

It's not as though we haven't been here before. The depression of the 1930s only ended in the US with Roosevelt's New Deal and it took years. The Tories answer is for drastic and savage spending cuts and they plough ahead despite the warnings. Their strategy is for the market to provide private sector jobs to replace those lost in the public sector. We all know that strategy won't work in Wales - the market failed to provide jobs in too many places in the boom years. It'd be naive to believe it's going to deliver now.

The Greenprint was put together to offer propsals to turn around those economies where the market has failed. But the basic principles can be applied to any community. I doubt whether there is a single community in Wales that isn't feeling the after-effects of 2008.

In 1971, Leopold Kohr wrote a book called "Is Wales Viable", which tackles the economics of an independent Wales - the "can we afford it" question. Kohr proposes the creation of a home market - where people consume products from Wales, or the home community. Of course it couldn't be done for everything, but if a home market can be created for the basics - renewable energy and food, then we could not only improve our economic position, but we could build up resilience as well - to food and energy price hikes, which are pretty much inevitable.

You may have heard the phrase "follow the money". So much money is leaking out of the Welsh economy. Kohr would argue that we should plug those gaps, stop those leaks and take steps to keep the money within the local community. Local authorities are in a good position to take a lead on this. Procuring locally, supporting budding co-operatives, making attractive loan finance available, prioritising job creation and taking steps to keep money local would make a good start.

Co-operation is part of Plaid Cymru's DNA. In the early 1930s, DJ Davies and Noelle Ffrench championed co-operation not only as a way to overcome economic disadvantage, but also as a route to Welsh freedom. Many party members have set up and been involved in running co-ops over the years - co-operation and collectivism are a key part of what Plaid is about.

In the Basque Country during economically difficult times during the 1980s, the Mondragon Corporation was formed and is still going strong today employing thousands in manufacturing. One of the most successful post-2008 UK companies has been the John Lewis Partnership - a co-operative.

This new, post crash world needs new and different thinking.

The motion asks that Plaid Cymru prioritises job creation and the economy, and that we use our strength and influence at the local authority level to contribute to that aim. We can show that by building sustainable and self-sufficient communities and delivering real improvements, we can at the same time as contribute towards the building of a sustainable and self-sufficient Wales. Our nation is, after all, a community of communities. Please give your support to this motion.


Welshwalker said...

In principle, it is a good idea to have a much more 'co-operative' economy and you cite some good examples, in Mondragon and John Lewis. You also cite the New Deal as a solution that was used to get the US out of the Great Depression (although WWII had alot to do with that as well).
However, this is all very well but doesn't address the real issue of 'following the money' and that is banking reform. Capitalism is not 'broke' it is in it's exploitative (sub)prime as evidenced by the fact that the 'people' have and are paying for the depradations of the globalised capitalised banking system. When finance is 'localised' (using New Deal-type mechanisms such as credit unions) then co-operative and other types of business can flourish. Political leadership is now needed to force county councils and other public sector organisations to procure buy sell circulate money locally. This is not being done. I exactly quote below a typical example which I received today ... Although we're an EU funded project, we work within the stringent procurement regulations of both Swansea University and the Welsh European Funding Office, and are therefore not in a postition to show preferential treatment to companies based in Wales .
My question is why not? Why cannot the Welsh public sector show preferential treatment to Welsh companies? Every other country in the world makes sure they look after 'their own' regardless of the 'rules' - why do we in Wales have to commit economic suicide because of some naive idiotic bureaucratic cow towing?
If Plaid Cymru wants to show Leadership this is where you need to focus - not on 'green' or 'socialist' issues which you can do absolutely nothing about except mouth platitudes.

Nigel Bond said...

One thing that occurs to me that relates to this, especially during the Rugby World Cup, is that we're a nation of rugby clubs but, as far as I know there's not one Welsh rugby shirt manufacturer. Now I know it's a competitive market and I'm not necessarily saying that Wales should play in the shirt of a Welsh company - yet! But it's disappointing to see so many of our village sides wearing shirts made by Kooga, Cantebury and others.

You mean there's more??? said...

I left Plaid in disillusionment with the failed Chwith Cenedlaethol Project, one of whooms darlings was of course DET, or m'lord as he probably prefers to be called these days.

Capitalism is now presented as the sole option and really it is time to openly call it's defenders and proponents to account.