Localism v the State

All previous blogs have been leading up to this question – can the State, in its current form – the nation state –   cope with this crisis? I think there are at least three reasons to think that it might not be able to.

Firstly, it is suffering a crisis of legitimacy. Elites are being challenged at all levels of government from civil servants, to MPs, to leaders of national institutions like the BBC. People are wondering when and how national governments will solve the crisis. But, more fundamentally, they are also questioning whether governments can spend citizens’ money – collected through taxes – wisely. The chain of money going into the system, coming out again, and then being seen to clearly benefit people, is too long, indirect and convoluted.  Although support for many state-sponsored organisations like schools and hospitals remains strong, people are not always making the link between paying for these, and receiving the service they provide.

Secondly, the crisis is exacerbating the geographic inequalities and tensions between highly successful globalised hothouses of economic activity, and whole regions where economic activity is entirely linked to being a client ‘servicing’ the dominant city – either by providing cheap back office public sector functions, or, in those places with good natural environments within commuting distance, by becoming recreational playgrounds.

This is not just a result of different economic performance, despite the best efforts of the State to balance economic development regionally, but partly because the hothouse city wins political support – captures the State effectively. The State then prioritizes the needs of the dominant City on the argument that the goose laying the golden eggs must be kept in good health. Hence London gets Crossrail, new airports, investment in cultural institutions etc, whilst Manchester has spent less in the last decade on public transport than Boris plans to spend on London cycle lanes in the next.

Thirdly, the lobbying power of incumbent corporations has been directed at influencing the State. Given their growing economic power these corporations have effectively been able to stultify policy changes that present a challenge to their position.

To find our way out we need to go back to the ‘Crisis? What Crisis?’ question. Which, as I perceive it, is that we are locked into a production/consumption cycle that is necessary to maintain levels of employment and social stability – but which also leads to social disparity and environmental risks, and the dominance of markets by oligoplistic corporations that are highly and effectively resistant to change.

The State can’t change this because it has been captured. The alternative then becomes supra-national organisations with the political power to create change by matching the cross-boundary reach of the corporations. But – as currently set up – these lack democratic legitimacy. The other alternative is localised action, or at least a combination of the supra-national and local which squeezes the influence of the nation State between them.

I don’t suppose for a moment this transformation will happen through a flip to a new ‘steady state’ of radically different power relations, but I can see a shift over time. Gradually, institutions operating at the levels of supra-nation, city-region and neighbourhood will gain in power whilst the nation State will lose it. This change will be facilitated by the potential for network linkages between public administrations operating below that of the State, so that the nation State no longer becomes the most efficient way of sharing knowledge and controlling resources.

You could even then make the case that this shift in economic organisation will be accompanied by a change in the ‘goods and services’ produced across the economy. Since each city-region will look out for the interests of its citizens, the idea of public spending being ‘common purchase’ will be more readily recognised and supported. The ‘flourishing’ goods and services which can only be paid for through collective purchase become more readily realised. Co-production, locally financed social enterprise, social investing – all of these  developments become more practical at a city and local level where people can begin to see connections between what they put in an what they get out. And social organisation on this scale taps much more into a human scale of identity and self-determination. Legitimacy can be established, accountability held, benefits more easily seen.

How might change happen? Or perhaps more realistically, what will signify that change of this kind is taking place? Things like devolution pressures, the establishment of  government networks across city regions, local movements such as Transition Towns, the success of participatory budgeting pilots, smaller units of local government being trialled.

These signs are there – but they do not add up to a forecast. Nor do they amount to a policy prescription. It is merely a description of  benign change. And, to be sure, there are other, less benign, possibilities.

One is that the oligopolists take over – including taking over some of the functions of the State, which they decide to invest in both because they begin to find ways of making a profit from them, but also because they recognise an imperative to address social stability issues for their own self-interest.

A second possibility is that I’m wrong and the State does mange to gets it act together, becomes more assertive, more active, invests wisely in a an effective national infrastructure, regulates corporates, controls finance, creates a green energy plan etc. But my sense is that this is too tall an order – that the greater self-determination that comes from localism will be a more effective route to change.

This, then, is the great debate of times – the nation state v local solutions.

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