Sunday 20 April 2014

Crony capitalism and lemon socialism in East Devon........ The costs of "substantial growth and expanding business"

The prevailing assumption underpinning economic policy in East Devon and pretty much everywhere is that 'development' will 'provide jobs and homes':
Futures Forum: "The new build for the western growth area of the district will provide much-needed business and employment for the young families as they set up new homes."

How solid are these standard promises readily made by our politicians and commentators?


Firstly, how does it appear from Iceland?

In Icelandic, lemon socialism is known as "Sósíalismi andskotans", meaning "the devil's socialism", a term coined in the 1930s to criticize alleged crony capitalism in Landsbanki, which term has gained renewed currency in the debate over the 2008–2012 Icelandic financial crisis
Lemon socialism, or more precisely crony capitalism, is also referred to as Pilsfaldakapítalismi, meaning "skirt capitalism", pilsfaldur being the hemline of the skirt, and the term referring to children hiding behind their mothers' skirts after having done something wrong, to criticize the alleged lack of transparency in dealings and reluctance to deal with bad consequences by themselves.

Lemon socialism - Wikipedia, the free encyclopedia


We are constantly reminded that we need to 'support business':
American School (economics) - Wikipedia, the free encyclopedia

But to what extent is that 'support' simply 'subsidizing'? 
And what kind of 'distortions to the market' does this produce?

Corporate capitalism is built on subsidized inputs, and profitable in large part because of them. It achieved growth in the 20th century through the extensive addition of subsidized inputs, like subsidized fossil fuels and large tracts of cheap land ... rather than the intensive approach of using existing inputs more efficiently.
For example, subsidies to long-distance shipping infrastructure tend to benefit the firms with the largest market areas and the largest-scale production facilities shipping their output the furthest distance. It makes them artificially competitive against smaller, more localized — and more efficient — forms of production. It creates artificial economies of scale at levels where they would otherwise have leveled off, leading to an economy of artificially large firms serving centralized markets.

Center for a Stateless Society » Capitalism’s Running Out Of Water — And Everything Else
Center for a Stateless Society » “Free Market Capitalism” is an Oxymoron

The practical implications on the ground for 'economies of scale' have been addressed:
Futures Forum: Diseconomies of Scale... and public services

As have the true costs and benefits of 'investment':
Futures Forum: Greenfield vs Brownfield ... which is 'more expensive' ... and for whom?

East Devon presents a particular example of how to 'support business':
Futures Forum: Desperately seeking suitors for SkyPark


Our politicians promise 'more jobs' by 'attracting business' to the right place.

Here is comment on Starbuck's recently-announced relocation project:
Tax Research UK » Starbucks: another exercise in tax avoidance, this time deliberately promoted by George Osborne
Mark Steel: What a triumph! We’ve persuaded Starbucks to relocate its European headquarters to Britain. Mine’s an extra shot of tax avoidance - Comment - Voices - The Independent
Starbucks in Fight Club

Which brings us to East Devon's relocation project:
Skypark unsuitable for EDDC office location…on many counts | East Devon Alliance
Futures Forum: Knowle relocation project: moving to Skypark: £1 million


It's interesting how the bog-standard 'industrial park' has morphed into the 'hi-tech park' 
- often built on green-field sites:

PLANS for a huge business park near Southend Airport, creating thousands of jobs, are set to be go ahead within the next three to four years.
The aim is for the new business park to attract high-tech companies to move into the area and be a catalyst for businesses wishing to expand and employ more people.
John Lamb, deputy leader of Southend Council, said: "We’re keen for all these businesses to come together as a nucleus, high-tech business park. At the heart of it will be Anglia Ruskin University’s MedTech campus."

Business park only three years from lift off (From Echo)

A campaign group has conceded defeat in its long-running battle to stop a £25m business park being built in the Aire Valley after Bradford Council announced that work would start on Monday.
Diggers will move onto the Buck Lane site next week to start work on the bitterly-fought hi-tech development of 15 acres of green land in Baildon.
Action group Baildon Residents Against Inappropriate Development (BRAiD) objected to the plans for two years...

Campaigners admit defeat in Baildon business park scheme (From Bradford Telegraph and Argus)

To some it is a “thoughtful” design for a contemporary business park, while to others it is a “crinkly tin shed”. The first phase of a controversial business park is dividing opinions with its new redesign.
The 2,811 square metre unit would be the first building at Baildon Business Park, a flagship Bradford Council-backed scheme which has been given outline planning permission on green fields off Buck Lane.

Baildon Business Park design criticised as ‘crinkly tin shed’ (From Bradford Telegraph and Argus)

This seems to be the case too in East Devon:
Futures Forum: What is the difference between a 'business park'... and a 'retail park'... Part Two

And there is "the development of a world class Science Park" as "a significant element of the Exeter and East Devon Growth Point":
Exeter Science Park - Exeter and East Devon Growth Point 

But one can have too much of a good thing...

... the Met Office with its “super-computer” in Exeter (plans are afoot for the Exeter Global Campus, which represents a “once in a generation opportunity to co-locate world leading researchers with key commercial partners”.)
... £2.5 million for the Met Office Environmental Futures Campus to let research bodies and private sector businesses spin out from their next generation super-computer.

Yet another competitor for Skypark | Sidmouth Independent News
Westcountry bids for roads, nuclear and "app" cash from £2bn local growth fund | Western Morning News


Again, in the case of 'homes', politicians regard big building projects on green-field sites as a panacea. But are there not more efficient ways of using resources?

Living in larger, more spread out spaces generally makes public services more expensive. Since car usage becomes endemic and public transport often becomes significantly more expensive, city planners are forced to build highway and parking infrastructure, which in turn decreases taxable land and revenue, and decreases the desirability of the area adjacent to such structures. Providing services such as watersewers, and electricity is also more expensive per household in less dense areas.

Urban sprawl - Wikipedia, the free encyclopedia

And are there not more imaginative ways of using resources?

Builders are using relaxed planning rules to construct “enormous slabs of thousands of boxlike” homes in towns and villages as though they were “dropped out of a C130 Hercules”, according to the presenter of the television programme Grand Designs.
Kevin McCloud intervened as the Government prepares to publish the results of a national review of architecture and the built environment

Builders 'churning out same old boxes’, says Kevin McCloud - Telegraph

At the very top of Sidmouth, the developers of the 100-odd housing estate  promised better transport links - with the developer paying for the facilities. 
But a better cycle bridge and travel vouchers cannot negate the basic geography of the places where people live are too far from the places where people shop and work:

Although there is the promise of more 'transport links':
Representations by WYG on behalf of Persimmon Homes (SW) Ltd 

Besides, who is pushing for more housing estates?
Futures Forum: Persimmon, Sidmouth and "promoting well-designed housing that is sustainable and provides much-needed new housing..."

Why are politicians so attracted to 'big investment'?
UK Tax Avoidance: Politicians Slam HMRC for Being Too Lenient on Big Business
It's no longer enough to influence politicians, big business seeks literally to write the laws | Mail Online
The truth about lobbying: 10 ways big business controls government | Politics | The Guardian
Fight Club was right.When deep space exploration ramps up the corporations will name everything. (Reply #2) - Democratic Underground

Corporate Britain is in deep trouble. It’s no longer just the banks, or the energy companies: big business in general has lost the public’s trust. Given that a vibrant private sector is vital for creating jobs and growth, this is a highly regrettable state of affairs.
There are many reasons for the business-bashing, including the recession, falling real wages and an absence of strong pro-capitalist rhetoric from the Coalition. But the corporate sector could also do much more to restore its reputation by putting its own house in order, and seizing back the initiative.

My plan to save big business and bring back public trust - Telegraph

Similarly, in East Devon, there is distrust of 'big business' whilst strategic economic policy seems skewed in favour of 'big investment':
Futures Forum: "Statistics show us that small and medium-size businesses (including those in tourism) are our life blood."

Which seems to point to the lobbying power of the East Devon Business Forum:
The influence of the East Devon Business Forum on the Local Plan | Sidmouth Independent News
“The A3052 corridor” – When is discussing planning applications NOT discussing planning applications? | Sidmouth Independent News


And whilst 'lobbying' is indeed difficult to define
Futures Forum: "What is lobbying?"... "Openness and transparency is vital."
Futures Forum: Payments and patronage in East Devon
Futures Forum: District Council meets to consider issue of Lobbying ... Weds 26th February
Futures Forum: Lobbying: big business and big government in East Devon

... there is the question of what the planning authority 'gains' when it grants planning permission: 
Futures Forum: 'Planning gain' - the replacement for S106 cash from developers - the Community Infrastructure Levy - but is it still 'bribery' by a different name?


But what are the 'alternatives'...

The Transition Town movement has at its heart the notion of 'relocalisation':
Localisation and Resilience at the Local Level: The Case of Transition Town Totnes » Transition Culture
How transition works - Transition Town Totnes


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