Traditional economics are failing to address the economic challenges we now find ourselves facing. Following the global financial crisis in 2007/2008, local government budgets were among the first to bear the brunt of austerity measures. Declining social care provision, unemployment, rising poverty and the loss of community facilities are just a few of the very visible marks of austerity which have fuelled the growing search for ways out of the vicious cycle of disinvestment that government cuts have brought about. It is this situation which has led to the growing interest in the concept of ‘community wealth building’.
Community Wealth Building (CWB) is a people-centred approach to local economic development, redirecting wealth back into the local economy and placing control and benefits into the hands oflocal people. Basically, the local council, in partnership with local residents, encourage ‘anchor institutions’, such as hospitals, universities, schools and other large-scale local employers, to spend more of their budgets locally, for example, by employing local contractors rather than outsourcing to large multinational companies. In turn, the local population and economy benefit as more of the wealth generated remains within the community.
There is no ‘one-size-fits-all’ model, meaning that each local experience of CWB may be different but what all the proposals have in common is their aim to improve the ability of communities to increase local asset ownership, safeguard jobs, create local prosperity and ensure local democratic control. It’s about moving in the direction of a different political-economic system to create an economy where we can all thrive.
Sounds good but there must be some drawbacks, right?
For opponents, there are three main arguments:
1. It’s protectionist and therefore inefficient - every council in the UK employing this strategy will make the UK poorer by not taking advantage of cheaper prices elsewhere.
A classic economists’ argument! In reality, local people do benefit from CWB. Admittedly, services may become a little more expensive but this is offset by residents earning more and experiencing a better quality of life. Another thing to consider is that shorter supply chains mean less environmental damage…
2. It could end up in cronyism when criteria other than just price are taken into account.
It’s impossible to compare a potential democratic economy against the idea of the current ‘squeaky clean’ system – you must at least compare ‘like for like’.
3. Too many meetings, most people don’t want to be involved in economic decision-making.
At the very least residents would have the opportunity to get involved – join the decision-making groups if you want to and not if you don’t. The actions of our community throughout the Covid-19 pandemic has shown that a new world is not a distant pipe dream but realisable now and communities which come together can shape a better future.