Even the pound shops are closing down

via Blogs - New Start Magazine Online by Neil McInroy

This article is provided courtesy of the blogs feed at http://www.newstartmag.co.uk/blog

Economic thinking and economic development are chronically poor in considering specific local places and the social and environmental challenges they face.

We knew this before the recession, but now its becoming much more serious. This was clear to me last week when an experienced local council official said to me: “Neil, it’s grim out there, it’s as bad as I have seen it. Even the pound shops are closing down”.

The “even” in the above statement reveals the economic place story behind these closures. The local service economy and its febrile relationship to what local people need had reached the end game. It was bad before the recession, but now the last vestiges and rump of consumer demand for those bargains is insufficient to warrant the pound shop.

The economy of that place, buoyed up by public sector largesse, property boom, financial services and credit, was self-serving not place serving. It’s now spiralled downwards and collapsed. Place and social life is now left to pick up the pieces of empty shops and decay.

Long before we had pound shops, “bond vigilantes”, or casino capitalism, or even economic textbooks, we had economic thinking which did not make the artificial distinction between the “economy”, “place” and “society”. The 18th century enlightenment and its flourishing and fusion of arts, science, technology and government, produced thinkers such as Adam Smith, who, while acclaimed as one of the first economists, was actually just a plain old philosopher, trying to understand the world from 18th century Edinburgh, unpicking the moral obligations and ties around places, people, traders and markets.

Adam Smith would no doubt have thought it ridiculous and absurd, to attempt to understand a local economy or markets without firstly thinking about people, morality and society more generally.

So, fast forward 300 years. An economic crisis – and still economics and economic development are a world of abstract modelling, numbers, or understood through mathematical charts. It’s a world where BBC commissioned research, say Mansfield and Burnley [and lots of other places too], lacks resilience, because the (economic) data tells us so! This is conducted without any consideration of the entrepreneurial energy and untapped human capital, which abounds in these and in every other place.

We need an enlightenment for the 21st century. A new economic literacy, which rejects this half-cocked thinking and one-sided understanding.

Of course, traditional economic development activities like inward investment etc are important, but so is the essence of place, the people, social capital assets and local demand. We need economic development thinking which understands, cares for and serves the place and the people.

Hazel’s comment:

Common sense. there doesn’t seem to be a lot of it about these days.

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