We are presently in the middle of a debate in Whangarei about whether to turn an existing community-owned building into an Arts Centre – the projected costs ranging from $10-15 million, with around 25% to be provided from the local council. What got my attention was a recent article in the Northern Advocate by Nick Chamberlain of the Northland District Health Board advocating for one of the options. He says:
”Although we play a part, social agencies and even district councils aren’t going to “fix” Northland – it’s going to be innovators, entrepreneurs and businesses taking a risk, putting their faith in our wonderful region.”
What struck me was the obviously widely held assumption that the work of innovators, entrepreneurs and business is primarily to draw more tourist/export dollars into our region and that will somehow solve our social and health problems.
What sort of innovators, entrepreneurs and businesses hold to this kind of philosophy? I assume they are people who are already wealthy and who will now make large, risky ventures that likely require further investment from outside the region and from local or national government if possible to make them a reality. These ventures will also rely on selling to people from outside the region while potentially exposing those within the region to the risk of the failure of their ventures. This seems to be the kind of private/public partnership proposed for the Arts Centre. I can’t help but be reminded of the words of the new co-leader of the Green Party, James Shaw:
“We have an economy where profits are privatised but the risks – and the social and environmental costs – of that profit are socialised.”
The thing is, where is the connection between having rich tourists visiting Northland and fixing our social and health problems? Isn’t this the rhetoric that turns local culture into “tourist culture”? The reasoning that builds high-rise hotels on our beaches? Casinos in our cities? So long as it attracts the dollars it must be good right?
Where does the money from tourism go? Does it produce satisfying work for local people? Perhaps a few jobs like that. But often it just produce demeaning minimum wage jobs that pander to the whims of the wealthy tourist while diluting our true culture.
Can culture and art be industrialised and packaged for consumption and still be authentic culture and art? Or is it just the way to make a few people who are already wealthy more wealthy, or sending wealth out of Northland to the outside investors? Will these entrepreneurs employ local people at a living wage and use local goods and services or will they pay the minimum they can for local labour and goods, or more likely import cheaper labour and goods?
Is this the future we want? Do we need to attract money from outside of Northland to have a vibrant economy with full employment? Actually I would argue no. What we need instead is to generate our own “internal” economy within Northland. What do I mean by that? Is it possible to have a workable, largely local economy?
The key is to assess our assets and resources, define the goals we want to achieve with those resources, then enhance them through minimising leakage.
Assessing our assets and our goals
We have extensive and diverse resources in Northland. These are our true capital assets. Our natural resources include our soil, our waterways and water reserves, our seas, our forests, our plants, animals and birds (both domestic and wild), our history, our skill-sets, our experience, our culture and our other raw materials. We also have existing infrastructure in terms of power reticulation, roading, harbours, and modes of transport (vehicles, boats, planes etc). We have the land-form and the climate to produce all of our basic necessities. Most importantly we also have our people.
Whether we use of misuse our assets depends on our goals. Our goals determine the ends to which we dedicate those assets. If for instance our goal is the maximisation of short-term wealth channelled into the hands of a few people it would make sense to sell off our capital assets, or to exploit them as quickly as possible – to run our economy, our people and environment, as they say “into the ground”. Then a few of us could retire rich to some safer place leaving the rest with very little.
If our goal on the other hand is the long-term well-being of our place and of our descendants we would do our best to preserve and build up our capital assets. We would ensure we maintained diversity of skill-sets, diversity of agriculture, horticulture and manufacturing. We would preserve our waterways, ground-water, air and soil. We would ensure our fishing supplies and native forests were harvested in a way that increased rather than decreased their long-term viability. We would retain local ownership of our lands and businesses. We would ensure that irreplaceable resources like minerals were only used in a way that ensured maximum value for generations to come for the wellbeing of our region. We would put great care into passing on values, culture and skills to our young people so that they – our greatest assets – would have a future in the place they sprang from. We would minimise the leakage of our assets and resources.
How leakage occurs
Leakage occurs when resources from within a community are extracted out for less than fair value. Some would argue that exports of raw material are not leakage, as they allow us to import the goods that we need and cannot produce here. From an accounting perspective when we deplete our capital to gain depreciating assets or consumables we are going backwards. Say for example we sell a capital asset such as a house, and spend that money on say, a car or a holiday. In 10 years the car is probably worn out and the holiday is a distant memory and we have no house – even though the house and land is still there and probably has the same intrinsic worth. This is the story of Northland under our current economic thinking.
We are depleting our true assets, in exchange for consumables and depreciable assets. We are selling our land to investors who take most of the profits generated on that land out of the area and in some cases out of the country. We are losing the nutrition in our soils through exporting huge amounts of timber, meat and dairy. What do we get in return? Imported fertilisers and pesticides to pump out more and more production from our depleted soils. Our soils have become chemically dependant – a temporary fix at best that cannot replace years of depletion and exhaustion. True sustainable fertility and natural resistance can only be built up again through the long process of careful humus replacement and building up the depth of topsoil. Our human and animal waste pollutes our streams and harbours instead of those nutrients being carefully put back into the soil.
We import cars, tractors and machinery to run our farms – all depreciable. And we buy consumable goods – fuel to run our machines and the trinkets of consumer society. These end up in our landfills, in our oceans, in our waterways, in our atmosphere and in our soils making it harder and harder for future generations to survive in this place. Or we ship what waste we can overseas – some to be recycled but most ends up polluting some other unfortunate community. When we use credit from a overseas-owned bank we are effectively “importing” it – the profit derived from our fees and interest is going to the overseas owners.
We also deplete our assets when we fail to care for our young people. When they cannot find meaningful employment and caring, safe communities what future is there for them?
How do we reverse leakage?
Diversifying our production and moving back to more mixed-farming models is a way of reducing and reversing leakage. More raw materials processed locally will reduce leakage, along with a greater variety of goods produced locally. This production may be smaller-scale but higher-quality. Less reliance then needs to be placed on revenue from bulk exports as more goods are traded locally and what is exported is in a higher value state. More work is created locally through the diverse local industries required for the more complex and skilled economy that results. As a bonus, waste and pollution is reduced as transport needs are reduced, and a more diverse model uses “waste” from one industry as raw material for another (manure and animal bi-products as fertiliser for instance).
More diverse farming and horticulture is less intensive in terms of environmental impact. Sustainable forestry and dairying practices maintain and build up natural fertility, preserve soil and waterways, allow aquifers to rebuild, reduce the need for expensive imported chemical and mechanical interventions and work with the natural processes.
Reducing dependance on debt also reduces leakage. An internal economy is one where capital is supplied from within the region. Borrowing from outside of the region is leakage – overseas owned banks profiting when that could be retained in the local economy. Similarly investment that is sent onto the national or international stock market is leakage. Brokers and companies elsewhere benefit.
By moving to smaller-scale but more diverse and more value-added style businesses the need for the vast debt burden required by our current primary industries could be reduced. The costs of entry into farming and horticulture becomes affordable in smaller-scale operations. More people are employed in more diverse jobs.
Finding ways to link local investors with local borrowers vastly reduces leakage. With the development of local credit co-ops, peer-to-peer lending, local virtual-currencies and time-banks an internal economy can begin to thrive.
Finally, we reduce leakage when we care for our young people and for the most powerless members of society. The worst fallout of our global-industrial system is social. Our people who have been left without work and without hope as the global economy has gone into spasms is a terrible waste.
When our young people have gone to the big city, overseas or to prison what sort of legacy is left for future generations? If our goal is the long-term well-being of our place and of our descendants we have failed almost completely. Free higher education would be a great start, but it must lead into creative, fulfilling local jobs, business ownership and home ownership opportunities to create stable communities.
A well-functioning local economy cannot rely on “innovators, entrepreneurs and businesses taking a risk” unless those innovators and entrepreneurs are connected to the community and land and are passionate about the wellbeing of the community and the land – actively supporting social services and community welfare initiatives that empower those caught in the poverty trap. A profit motive alone will not care for the poor or for the young. The motive must instead be the long-term wellbeing of the community, and the creation of a sustainable economy to support that goal.
What are our choices?
What kind of community consensus do we need to create a system that is more that a vague hope that the most powerless are cared for through some sort of trickle-down from tourism or exporting of raw materials?
How do we make our foremost goal and the measure of our success to be the care of our people in empowering, dignified and culturally appropriate ways? Can this be left to the whims of a so-called market economy? Even when it is demonstrated that it makes no sense even just economically to leave people poor, uneducated and unemployed, the market economy alone has generally done nothing. It has left the job to “the government” or simply blamed the poor, uneducated and unemployed for their own plight then grumbled about having to pay tax for the social problems created.
The most obvious way to generate an internal local economy is of course to make a choice, wherever possible, to buy from local suppliers who also buy from, borrow from and employ other local people. The more local the supply chain the more leakage is plugged. The more leakage is plugged the more momentum is gained by the local internal economy.
Tourism may be a happy bi-product of a strong caring local economy, but to rely on this as our source of well-being is to make ourselves powerless victims of the international economy that really doesn’t care about us. But instead imagine focussing on a truly local sustainable culture, celebrating our uniqueness and sharing the good things we have with others in an attitude of hospitality and generosity. Imagine art and music made not for commercial gain but out of a flourishing of history and depth of community that has time and resources to celebrate together. Ironically that would be a great tourist attraction!
Imagine the wonderful unique goods we could make from our local materials – not just “crafts” for “tourists” but real food, clothing, utensils, furniture, tools and technology that has grown to meet our local needs using our local resources. With a thriving full-employment low-social-cost society we should be able to make an excess of goods that can provide an export income, but only after supplying local needs at fair prices. This would make our region a highly desirable place to live and to visit.
Would this kind of local economy provide us with not only basic economic resilience but also assist us in our goal for long-term well-being of our place and of our descendants – a meaningful sustainable community where there is a future for our young people? Could this model be the way to lift us out of our present health and social crises? Could this provide a basic level of provision in case of emergency or disaster?
I am not against the development of an Arts Centre at the town basin. Either option may well be great. But it will not solve our health, social or economic problems. Only a sustained, coordinated effort involving social agencies, district councils, innovators, entrepreneurs and businesses with a shared goal of enhancing our assets, reducing leakage so that all may thrive in a strong resilient localised Northland economy can guarantee a good future for us all.
by Clive McKegg