On 2 February 2021, Mark E Thomas, Jeremy Stanyard and Owen Carlstrand discussed their work in The 99% Organisation with the members of the PA Association.
The video is here.
Below is an approximate transcript of the presentations.
Mark E Thomas
Good evening. Thank you very much for inviting me back to speak to you again.
Since I left PA, I have been principally involved with one major initiative: 99%.
This evening Jeremy, Owen and I are going to tell you about that initiative, and hopefully we can have plenty of time for discussion afterwards.
What is 99%? It’s a book and an organisation, with one single aim: ending mass impoverishment through peaceful means.
Mass impoverishment is when most people in society find themselves getting poorer year on year instead of getting richer. My parents, like most of their generation, were better off than their parents had been; I, like most of my generation, am richer than my parents; and when my children were born, I assumed that they would have a good chance of being better off than I am.
But, while I was still at PA, it began to dawn on me that things just weren’t working that way and that if we did not change tack, we were looking at the first generation in living memory to be poorer than their parents. If there is time afterwards, I will tell you the story of how that came about; but, in short, the more I looked at the data the more concerned I became about this process of mass impoverishment.
In the end, I decided to leave PA and to write the book 99%.
The book itself has three parts:
- the first part explores mass impoverishment, and what will happen to the UK if we continue on the path that we have been on for the last decade;
- the second part explores the reasons why we have not changed direction – which is principally because we have been persuaded that there is no real alternative; and
- the third part spells out what the alternative is and the types of actions we need to create to build an attractive future.
Most people are not aware of it, but in the UK, although the economy has grown since then, most people are worse off today than they were in 2007 – 13 years ago. That is not something I ever expected to see in my lifetime.
So the last 10 years have been dreadful. But the problem runs deeper than that.
And if we think about it, we can see from our own experience how different is the deal on offer to someone of 20 today compared with 40 years ago. In those days, if you were bright, the state would not only pay your university fees but actually give you a maintenance grant – you would leave without debt. And when you left, there were plenty of proper jobs available to you: jobs which would offer a reasonable wage, good security, attractive prospects and even defined benefit pensions. In those days, someone on average earnings would need to save up about seven or eight years to be able to afford the deposit on the average house. Now the equivalent figure is over 35 years.
Let’s just think about where we may be heading over the next few decades.
The median earner in 2019 took home around £25,000. If we extrapolate the pre-2010 trends (which were not great as they included the impact of the Global Financial Crisis and the Great Recession) we see that by 2050 the typical person would be earning almost £35,000 – which, while not luxurious, is dramatically better than today. We could be looking at a very attractive future.
But if we extrapolate the post-2010 growth and inequality trends, we see that, by 2050, we could have turned the UK from a prosperous northern European country into something whose profile is much more like South Africa today: a tiny wealthy elite who live surrounded by security to protect themselves from the mass of the population who are living in or not far above the poverty line.
In the past, when there have been crises, governments have taken radical steps to improve matters: in the US, Franklin D Roosevelt introduced a New Deal to end the Great Depression. That involved enormous investments in infrastructure and other job creation schemes in order to bring down unemployment and to create a future for ordinary people.
After the Second World War, with a war-damaged economy and a huge and now largely redundant army, Clement Attlee implemented the Beveridge report and invested to create the welfare state and the National Health Service.
We are still enjoying the benefits of these investments today. And yet there is no serious discussion of any kind of New Deal now.
Why not? One reason is that we have been persuaded that it is unaffordable. First the Global Financial Crisis, and now COVID have, we are told, left the government with “unprecedented debts” which will “will have to be paid back” so we have to be “realistic and responsible” about the prospects for any kind of government spending to preserve jobs and regenerate the economy.
And I used to believe this kind of argument myself, until I looked at the facts.
As you can see, our debt to GDP ratio today is around 100%. But far from being unprecedented, this is just about the average over the last 300 years. Even more striking is the fact that in 1820, before the Industrial Revolution really took off, debt to GDP was over 200%; and in 1945 it was over 250%. And yet the Industrial Revolution and the Golden Age Of Capitalism which followed these two peaks were the two most successful periods in our economic history.
We could afford to spend then, and the benefits were enormous. We can easily afford to spend now – and if we do not, that is a political choice not an economic necessity. In fact, it is economic illiteracy.
So if we do have freedom to act, what actions should we take?
Perhaps surprisingly, given the scale of the problem, the actions that we need to take are individually neither particularly radical nor enormously complex. In fact there are only five things we need to do.
The first action is a democratic reset. At the moment there is nothing in our unwritten constitution which prevents the government enacting a policy that it knows will be harmful for 99% of the population. It is simply taken for granted that they would never do that. The last 10 years show us that we cannot rely simply on taking it for granted; we need constitutional protection.
We also need far more in the way of checks and balances than are currently present. Looking at January’s events in the US shows how fragile democracy is, and how it risks being captured by powerful interests representing a tiny fraction of the population. All countries need to learn from the US experience.
The second action is also self-evident: we need to base policy on facts not myths. The dominant policy of the last decade has been austerity – and this was justified on the basis of the ‘state of public finances’: the level of debt to GDP. But as we saw before, as a matter of fact, this is no justification. Austerity was based on a myth, not the facts.
The third action builds on the foundation of the first two actions to develop policies which both grow the pie and share it fairly – so that everybody in society benefits.
Although it is true that policy formulation is complex, fundamentally there are only four types of policy. Every policy either grows the pie or it does not grow the pie; and it either shares the pie fairly or it does not.
That gives us this picture.
At the top right are the shared growth policies which both grow the pie and share it fairly. Take fundamental research, for example; we have been gradually funding less and less of this – and yet it is the engine of our future prosperity. Or education; or civil infrastructure; or healthcare – all of these things help everyone in society. We want to see far more of these.
At the top left are policies which do grow the pie, but they do not share the benefits fairly. Aggressive automation, for example, could enable us to produce lots more valuable goods and services, which might be good for society as a whole, but would also lead to many job losses. If we do nothing to balance these policies, the pie may grow, but many people will find their slice shrinking dramatically.
And this brings us to the need for the policies on the bottom right. These policies can be used to balance type I policies so that everybody shares in the benefit that growing the pie can offer. So if we did have aggressive job automation over the next 10 years, some of the casualties could be mitigated by retraining and direct job creation schemes, and some of the balancing would need to come from a strengthening of the safety net. A good policy portfolio is a balanced policy portfolio.
Finally there are the vulture policies which neither grow the pie nor share it fairly. A hard Brexit is an example. The government’s own analysis showed that a hard Brexit would be expected to shrink the pie. When that happens many people are bound to suffer, even if some hedge fund managers do extremely well. We simply should not implement vulture policies.
So if we look back over the last 10 years, we can see that the main reason for a lot of our problems is that we have had a preponderance of Type I and Type III policies, and far too few Type II and Type IV policies.
What would happen if we shifted policy formulation to produce a balanced portfolio of Type I, Type II and Type IV policies?
It would not create utopia, but it would bring us to that type of attractive world that we talked about before, in which the coming generations are substantially better off than today, and younger people have an appealing future to look forward to.
The fourth action is to invest wisely in the future. Because of austerity we have been unwisely under-investing, and there is a great deal of catching up to be done.
And finally, the fifth action is to ensure clean, competitive markets. This is to make sure that ethical businesses outcompete the unethical ones, rather than the other way round.
There is a conventional story of the role of business in improving the world. In this story, good behaviour is synonymous with good business. If you treat your customers well, they will be more loyal; if you treat your employees fairly, they will more than repay it with commitment and creativity; if you contribute to the rest of society, you will be rewarded as a good corporate citizen.
And there are certainly good examples of companies which have both behaved ethically and been successful. The top ten in the UK include: Pukka teas, Neal’s Yard, Triodos, and Ecover.
But if we look at the really successful companies, what do we see? Five huge companies now make up 20% of the market value of the entire S&P 500: Facebook, Apple, Microsoft, Google and Amazon. They are all under investigation by House judiciary’s antitrust subcommittee for anti-competitive behaviour. In addition, they all avoid taxes. Amazon is notorious for its treatment of its workers. And Facebook has been complicit in abuses of democracy. Are these the five most ethical companies in America? I hope not.
So, what is really happening here? In practice, one of the easiest ways for a business to be competitive is to externalise its costs: to pollute without paying the costs of clean-up, to avoid taxes, to underpay staff – and leave the rest of society to pick up the bill for all this. And so an ethical business finds itself at a cost disadvantage when competing with an unethical one. Amazon exemplifies the power of externalisation as a competitive weapon.
At the moment, the playing field is tilted against ethical businesses. We need to level it, to make sure that ethical businesses can outcompete the unethical ones.
Those are the five key actions.
And I have now given you a very brief summary of the book:
- what happens if we don’t change,
- the reasons for believing we can change, and
- the actions we need to take.
The book was published in September 2019, and of course, I hoped it would do well. And I was delighted when The Financial Times chose it as one of their books of the year.
But I was under no illusion that the book itself would have any impact on the UK’s future direction, so with a few friends (and my wife), I set up The 99% Organisation whose purpose is to raise awareness of these issues and drive policy change along the lines we’ve just been talking about.
This is a picture of what we are building. To achieve the kinds of changes that we have been talking about requires policy change, and there are 650 people in the UK who determine that policy: our MPs. If we can help them to formulate better policy and make better informed voting decisions, we will see fact-based policy for the benefit of the population as a whole.
But each MP is responsible, and responsive, principally to his or her own constituents, so we aim to set up local groups in as many constituencies as possible, and to do that we will need a large number of members – possibly as many as 100,000.
Membership is important because 99% is an entirely volunteer organisation with no employees, so our ability to do anything depends on having members. Our growth has enabled us to kick off five important projects:
- Local Action – the local groups are active in spreading the message in their own areas, in writing to local politicians and in gaining coverage in local media;
- APPGs – in addition to the local group contact, we are in contact with several of the all-party Parliamentary groups whose objectives align with ours: most notably with the Future Generations APPG;
- Externalisation – we have a joint project with Imperial College, the Impact Project and the IPPR looking at re-engineering the profit motive into a force for good (the fifth action we talked about before);
- Generation 99 – when we talk about the world of 2050, it is important to people like me, but it’s a lot more important to people who are under 30 who will still be at the peak of their powers in 2050. This project aims to energise and empower those generations to build the kind of world they want to live in. I’m not going to talk any more about this one because Owen is project manager, he is the expert, and he’s going to tell you in a minute;
- Herefordshire 2030 – unlike the other projects, all of which are ultimately aimed at producing top-down policy change, this project aims to see what can be done bottom-up in a particular area (in this case Herefordshire) in order to make the county greener, fairer, and more prosperous by 2030. I’m also not going to talk any more about this project because Jeremy has been running it and he is about to tell all.
I hope I have given you a flavour for what we are aiming to achieve with the book and the organisation: ending mass impoverishment, creating a world fit for future generations to live in: greener, fairer, and more prosperous than today.
As Mark has mentioned, one of the projects we are engaged in is aimed at getting the youth of this country to believe that they can make a difference. As you probably realise, whilst this may sound simple it is in fact complicated and difficult for a host of reasons. Our rationale for this project is well illustrated by these two slides, which I hasten to add are not shown for political reasons but merely to demonstrate a statistical fact.
In the Brexit referendum some 6 million 18–34-year-olds didn’t bother to vote. We don’t know why but reasons probably include discouragement, indifference, mistrust, inconvenience and maybe a feeling that it didn’t matter whether they voted or not.
Slide two shows that if they had voted in the same proportion as the 75-plus age group then the referendum would have had a different result. The moral of this story is you can make a difference if you take part.
So, we have set out to energise the younger generation. We have a number of problems:
- we are a bunch of middle class retired old fogeys who haven’t a clue what is really troubling anyone under 40 (we think we know but……);
- we don’t know what problem we need to address except in very broad terms;
- we can’t easily access the full demographic spectrum of young people;
- finding suitable characters who are motivated to be involved is difficult (as demonstrated by the proportion who couldn’t be bothered to vote in the referendum;
- those who want to be involved tend to be educated, middle class and very likely to be significantly privileged.
We have therefore set up a group, with school age, undergraduate and young working members, as well as the fogeys to carry out a series of interviews with people to ascertain what worries them, what they would like to see improved and what they see as their part in the process. We have so far carried out about twenty interviews.
The difficulty in this is amply illustrated by a real response to an interview done in Glasgow for a previous project. The subject was asked what they would like to change about their lifestyle and the response in best Para Handyese was something along the lines of “Pal we havn’ae got an effing lifestyle”. You can see both the problem and the sensitivities.
Our immediate objective is to define, using interview data, our mission which will allow us to design the project and in the longer run to hand the whole thing over to a group of enthused and eager youngsters enabling us to fade gracefully into the distance.
If any of you know of any eager (or not so eager) under 30s who would like to take part, please let me know.
The Herefordshire 2030 was launched in July last year with aim of establishing a set of policies and action plans to make Herefordshire greener, fairer and more prosperous and was launched in a meeting led by Mark and Matthew Taylor, Chief executive of our co-sponsor, by the RSA (Royal Society for the Arts, Manufactures and Commerce). Whilst central government policy clearly has a significant impact on the prospects of the county, this project seeks to stimulate ‘bottom up’ initiatives that can be implemented by local institutions and businesses, and local people.
Herefordshire was chosen as it is representative of ‘Middle England’ – neither particularly wealthy nor particularly poor…and because Mark lives there and has attracted many Herefordians to the 99% Organisation.
We have a team of some 30 people, all volunteers, some of whom are contributing significant chunks of their time; others are only able to offer limited support. And, as circumstances have dictated, all meetings are virtual. Despite these constraints, progress has been steady and enabled us to issue a data-rich interim report in December, based on the ‘four Es’ of our analysis – Economy (growing the pie), Equity (sharing the pie more fairly), Environment (doing so in a way that is more sustainable) and Enablers (underpinning actions to support progress). The report set out a series of hypotheses, many of which are to be tested in the next stage of work by ourselves and others to be taken forward by the council or other local bodies.
Some of the analysis carried out to date has been startling to someone as ill-informed as I clearly was before starting on this exercise. One example is the impact that agriculture (for which Herefordshire is famous) has in terms of carbon-equivalent emissions (translating the emissions of methane etc into the equivalent mass of CO2) relative to its contribution to the economy to the county, as this slide illustrates:
Another is the disparity of skills between the 10 most deprived wards and the average for both the county and England as a whole, with all that that implies in terms of income, health and life chances.
Since presenting the interim report to an open meeting, including county councillors, members of local pressure groups and business people, we are now taking forward a handful of the hypotheses to be developed and tested over the coming months.
These include further work on:
- the impact of agriculture on the environment
- investment to grow employment and opportunities in specific sectors
- skills building
- social and health issues
We look forward to giving you an update later in the year!
If you are interested to find out more about these or other 99% projects, look here.
And do sign up and join the 99% Organisation.