Big Society: The Trend Continues

I must say I'm enjoying all this "Big Society" malarkey. The debate about what in the hell it means, the irony of Liverpool City Council complaining it doesn't have to fund its involvement (which is the point, after all), the claims that volunteering is in decline, the claims that volunteering is doing just fine.

Wavy Dave must be pleased that it's all travelling in the right direction.

Because the big idea in the "Big Society", if there is one, is really for the Tories to make political capital out of a number of trends that have been building and converging throughout the past decade. They know that faith in our institutions has been in decline, that various facilitators are enabling us to personalise retailing, entertainment, travel, finance, politics and now public services. They know that everyone (except investment bank executives) is focused on sustainability and how to achieve more with less. They know these trends are not going to ebb away any time soon.

But who cares if the Tories try to claim the credit? That's politics. I'm all for having more Big Society debates. The more we focus on the problems of how to deliver public services more cost-effectively and efficiently, the better.

Office Of The Devil's Advocate

I fancy that the perceived utility of Devil's advocacy has largely suffered from a having bad name. Which is hardly fair, given both its effectiveness and its holy origins. Although the Catholic church saw the value in appointing a canon lawyer to argue against an allegedly saintly person's canonization, other institutions were too timid to follow suit. And when the Catholic church itself replaced the 400 year old role with a lighter weight "Promoter of Justice" in 1983 it 'opened the floodgates' to 500 new saints, when only 98 had been canonised in the preceding 83 years. The role of Devil's advocate might well have been overdone from time to time, but the watered-down replacement clearly didn't cut it as force for critical thought.

Of course, the advent of the lighter weight Promoter of Justice coincided with the secular trend of appointing 'independent' commissions, internal auditors and other functionaries to review, audit or otherwise evaluate our institutions. Yet, just as we have more saints, we also seem to have corruption and fraud on a grander scale than ever before, and the world teeters on the brink of financial meltdown [cue thunder].

The most recent example of such lightweight independent review is the IMF's Independent Evaluation Office assessment of the IMF's response to the financial crisis. The IEO has waited until 2011 to announce that the IMF was guilty of "groupthink" and a lack of critical thought between 2004 and 2008 and so failed to recognise and respond adequately to the sub-prime crisis. Which means the IEO hasn't been terribly effective either for most of the decade.

So it occurs to me that we need to reintroduce a force for unadulterated critical thought - for Devil's advocacy - in all our institutions. We could put a Devil's Advocate on each of our Boards, in Parliament, in the Cabinet and at the top of each of our regulatory authorities. Each DA's office would act as a lightning rod for critical thought about each institution. And as the DA's figured out how to destroy our institutions, we'd be able to respond to the threats and opportunities they'd identified (in the same way Jack Welch once challenged GE's business units to simultaneously destroy and adapt their own businesses).

Which is all fine in principle.

The Devil's in the detail.

Image from Ask Sister Mary Martha.

SNAFU at IMF's IEO?

Well, it's official. The International Monetary Fund suffers from "groupthink" and a lack of critical thinking... or at least it did between 2004 and 2008, according to its own "Independent" Evaluation Office (IEO).

The IEO defines "groupthink" (at para 42) as "the tendency among homogeneous, cohesive groups to consider issues only within a certain paradigm and not challenge its basic premises (Janis, 1982)." In this context, the IMF's macroeconomists agreed with those in the UK and US that advanced economies were sound, resilient, could allocate resources efficiently and redistributed risks to those able to bear them.

Street: our finances are as good as gold.

In this belief, "the IMF was overly influenced by (and sometimes in awe of) [their counterparts at the central banks]... perhaps a case of intellectual capture."

So what's happened since 2008?

Well, in between visits to the PIGS, I guess the IMF has been waiting patiently on the IEO's report. After all, "the IEO’s mission is to:

* enhance the learning culture within the Fund,
* strengthen the Fund's external credibility,
* promote greater understanding of the work of the Fund, and
* support institutional governance and oversight."

Which raises the obvious question: has the IEO fulfilled its mission in the period 2003 to date?

Or, in pukka, quis custodiet ipsos custodes?

Gordon's Crash

Knowing of my attitude towards this country's most recent former Prime Minister, someone cheekily gave me "Gordon Brown Beyond The Crash" for Christmas. By this morning, I'd only managed to wade through to page 50, as I tend not to dwell terribly long in the only place I could bring myself to store and read this particular opus. So I felt it was time to celebrate with some of my early reflections on the tome.

The cover is perhaps the most insightful aspect of this book so far. It is appropriate that Gordo's name appears in red, since this reflects his political bias, his obvious fondness for that side of the accounting ledger, and the state in which he left the country's finances. The grey background connotes Brown-blighted Britain's economic gloom. And the running together of author and title clarifies that it's more autobiography than observations on economic or political theory.

The contents itself draws a very thin veil indeed around the revolutionary idea that globalisation requires international governance (I know, I'm just amazed the idea never occurred to me before reading this book either). Key features of this 'veil' are the liberal use of the word "I" and saccharin praise for dozens and dozens of staff members, advisers and others who drank the Kool-Aid - so many, in fact, and so saccharin as to be patronizing. Which I guess is the point. Ultimately, these people lost Gordo the war, not him - an attitude we saw exemplified in his handling of the infamous exchange with a certain resident of Rochdale: "Who put me in front of that woman?"

Anyhow, having deftly skirted the reasons why the UK's banks were permitted to become under-capitalised in the first place, I'm up to the part where "As I arrived back in London on Saturday morning I went straight into the office to meet Alistair, who was planning to announce the nationalisation of Bradford and Bingley..."

I can't wait for another bowel movement.

Open-Loop Time Banks?

I spent Monday partly examining the practicalities of treating time as a currency at BarCampBank4.

In essence, 'time banks' for social care are no different to other closed-loop 'alternative' currencies ranging from loyalty schemes to gift card and store card programmes. Hureai Kippu, the Japanese system for earning the right to senior care by caring for senior citizens yourself, is often cited in this context. That specific model, which involves a nationwide clearing system for care credits, is being considered by various local authorities in the UK, though Age UK is among those who question its utility.

But we've had UK time-banking schemes since the '90s, e.g. TimeBank, TimebankingUK and Local Exchange Trading Systems or Schemes (LETS), the mutual aid barter network. The difference is explained here. So I it's clear there is something worthwhile that can be achieved by trading units of time to solve underfunded problems like personalised social care in its many forms.

However, we need to be cautious about 'open loop' time banks, even though this may bring welcome liquidity and funding to support an aging population with a giant pension deficit. There's a range of practicalities that stand in the way of time - or loyalty points, for that matter - becoming a 'real' or open-loop, freely negotiable currency or E-money. I'll cover these briefly below. But a more fundamental point is that I'm not even sure that opening up such currencies would add any utility to what's already feasible with any real currency, unless the underlying E-money system is somehow cheaper and more cost effective in moving money or other resources to where they are needed. And there are of course plenty of E-money systems that did not need to go to the trouble of creating a new currency to get going.

Other than funding the business itself, perhaps the main practical challenges to time banks becoming open-loop are achieving 'critical mass', enabling immediate redemption in cash, and tax. Issues of trust, privacy, data protection and so on seem secondary and surmountable so long as the upside to participating and disclosing information outweighs any perceived downside.

Achieving a 'critical mass' of people that will ensure adequate supply and demand for the type of time in question is an awesome challenge that deserves a post in itself.

The requirement for users to be able to redeem the time they have 'earned' or 'acquired' in cash at any time would go hand-in-hand with the need to be authorised as an E-money issuer, and to comply with various capital and prudential requirements, including safeguarding the cash corresponding to the outstanding time. Redemption in cash and safeguarding would seem to defeat the purpose of a time bank, founded as it is on the notion that participants deal only in time.

Finally, we are obliged to pay income tax on our earnings, as well as indirect taxes on sales of goods and services. And governments tend not to accept payment in anything other than their own national currency. While in a closed-loop UK time-bank for charitable purposes tax is not an issue, as soon as you enable redemption for cash or goods and services, tax would come into play.

For these reasons, I think time banks are very useful in allocating resources within a specific community, network or scenario, but not as an open-loop currency - at least not without substantial changes to the regulatory and tax framework.