Mary Mellor

Community development finance : a neo market solution to social exclusion?

Financial exclusion is increasingly being recognised as an important aspect of socio-economic inequality where disadvantaged individuals and communities are isolated from mainstream financial services, particularly affordable and readily available credit. In the face of these problems, social policy initiatives have emerged that have travelled under various names: social investment, micro-finance, community finance and community development finance. These initiatives are seen as the basis of a ‘new economics’ that will create self-sustaining local economies. The government is also promoting community development finance as an aspect of community regeneration with the aim of providing credit to poor communities to stimulate local enterprise and thereby reduce dependency on state support. The same approach is being taken to grant-funded community and voluntary organisations to encourage them into a neo-market approach to the delivery of services. This article explores the phenomenon of community development finance and assesses its proposed role in community regeneration and in relation to the community and voluntary sector.

Consulting the community : Advancing financial inclusion in Newcastle upon Tyne, UK

Purpose – The purpose of this article is to highlight the multifaceted nature of financial exclusions, the range of potential needs that require addressing via financial inclusion policy and grounded initiatives, and emphasise that future “new models of affordable credit” must be framed by, and embedded in local communities.Design/methodology/approach – Documentation and analysis of an innovative participatory consultation that explored the perceptions and financial needs of a local population through use of participatory appraisal is used, one of a growing family of participatory approaches that is recognised as taking a “whole community approach” to conducting action research.Findings – Provides evidence of the range of services actually available to the “financially excluded” in a so‐called disadvantaged area, reasons for their use (or lack of), and the needs, wants, and/or desires to be fulfilled by any local “ideal” form of financial service provision.Research limitations/implications – The research ...

The politics of money and credit as a route to ecological sustainability and economic democracy

In recent years the role of money in society has been raised by ecofeminists, greens and ecosocialists. Ecofeminists have pointed to the gendered dimension of money systems which reward male-dominated and ecologically destructive activities, while much of women’s work and lives is marginalized or excluded. Ecological economists have criticized money accounting systems for externalizing environmental damage and treating nature as a free good. Although anti-capitalist critics have long explored the role of finance capital, this paper asserts that money and credit have played a stronger role in all economic systems—particularly capitalism—than has been previously acknowledged. As Glyn Davies has argued, “our lack of mastery of money is in large part the cause of widespread relative poverty and mass unemployment.” While not supporting the implicit assumption in Davies’ statement that controlling money could of itself ameliorate the problems of capitalist economic systems, understanding the role of money and credit could provide a possible route to an ecologically sustainable and just society through a democratized and socialized money system.

Visioning the Sustainable City

One of the dominant features of the 20 century was the rapid rate of urbanization. The first half of the 20 century saw the urbanization of most countries in Europe, Australia, North and Latin America, and Japan, although until the 1960s, three-quarters of the world’s population still lived in rural areas. The last 50 years have seen a dramatic growth in cities across the globe so that now the majority of the world’s population live in cities or urbanized areas. Over the next 50 years, this proportion is expected to rise to 75 percent.

Co-operative Principles for a Green Economy

Contemporary economies are dominated by a capitalist market whose aim is not to provision human societies, but to create a profit. Production cannot respond to human need on a democratic and equal basis, because it can only respond to effective demand*that is, people who have the financial means to purchase goods and services at a price that will generate a profit. There is no mechanism for society as a whole to express its needs on an egalitarian basis. Provision of necessities and public services have to piggy-back on profit-driven activities, while the public sector is forced to extract reluctantly paid taxes or other forms of payment in order to provide public welfare. A profit-led economy also demands continual growth, and people are urged to constantly produce, consume and, more recently, borrow.

Varieties of ecofeminism

Rosi Braidotti, Ewa Charkiewicz, Sabine Hausler, and Saskia Wieringa: Women, the Environment and Sustainable Development. London: Zed Press, 1994. Maria Mies and Vandana Shiva: Ecofeminism. London: Zed Books, 1993. Val Plumwood: Feminism and the Mastery of Nature. London: Routledge, 1993. Joni Seager: Earth Follies: Feminism, Politics and the Environment London: Earthscan, 1993. Vandana Shiva, ed.: Close to Home: Women Reconnect Ecology, Health and Development Worldwide. Philadelphia: New Society Publishers, 1994.

Who’s in Control? Job Creation Co-Operatives in a Capitalist Economy:

In Britain a new generation of worker co-operatives have emerged that differ from earlier phases of co-operative development in that they have been formed primarily to create jobs in response to the high level of unemployment. All the major political parties favour co-operative development and co-operative support organisations of various kinds have been set up at local and national level. This paper argues that such ‘job creation’ co-operatives and the organisations that support them have come under great pressure to prioritise job creation as against the formulation of effective and secure co-operative structures. This pressure arises because the policies surrounding co-operative development have not taken account of the severe economic pressures the co-operatives face and the consequent effect upon their ability to sustain the co-operative principles of ownership and control of the business by the people who work in it. In the light of the specific needs and problems of the new generation of worker co-operatives the paper argues that the concepts of co-operative ownership and control need to be reassessed, in particular in relation to membership. The distinction between a co-operative and a collective is also re-evaluated together with the need for co-operative structures to be replicated in other aspects of the local community.

The Financial Crisis

The financial crisis of 2007 2009 is remarkable for two things: the speed with which all the nostrums of free market economics were abandoned and the absence of any coherent alternative from the Left. The dogma of market supremacy was fatally fractured as country after country saw the virtual*if not actual*nationalization of the financial system. The roots of the crisis were complex, but at the heart was the deregulation of the financial sector that enabled a complex range of financial instruments and structures to be developed. Pressure for this came from the increasing financialization of economic life, particularly in the Anglo-Saxon economies. Capitalism was ‘‘democratized’’ through a combination of de-mutualization, privatization, and readily available debt. Houses were increasingly seen as financial assets rather than places to live, and people were encouraged to invest in pensions, the stock market, and other income-generating schemes, effectively turning their savings into risk capital. Huge levels of consumer debt and a collapse in savings masked relatively static wages. The large flood of money into investment funds, endowment mortgages (where the capital is invested in the stock market rather than repaid), pensions, and other financial instruments swelled the stock market as these huge sums searched for a home. Like all asset booms, the early gains tempted more investors, fuelling even further rises until the bubble burst. It is not without irony that it was the poor who brought down the financial system. The search for everincreasing speculative returns saw increasingly crazy financial instruments and inflating assets. This imploded when a huge pyramid of debt-related instruments pivoted on the shaky foundations of financially vulnerable households.

Money – The Neglected Agent of Change

In a money-based society access to money must be a human right. To be denied that access is to be denied the right to sustenance. Since money is created out of nothing there is no logical reason why it should be borrowed from banks, then circulated through commercial production before being taxed into social use. A more logical way would be to issue the money to the people, individually or collectively, who could then choose their provisioning priorities... exposing the vacuous and deeply exploitative reality of money issue and making proposals for putting such a simple yet sophisticated mechanism in the hands of the people would be a revolutionary act. (60)

The Newcastle Employment Bond: Investing in Local Communities

Concern with social exclusion and neighbourhood renewal has often focused on economic regeneration and new ways of stimulating employment or selfemployment in local economies. One recent initiative has been to raise private money through a bond with the social aim of creating local employment. This paper explores the Newcastle Employment Bond, its structure, the philosophy behind it and the motivations and expectations of the people and organisations who invested in it. The paper asks whether the Bond can be seen as a model of ‘Third Way’ thinking, providing an alternative to state funding of social exclusion and employment initiatives or reliance on purely profit-oriented economic regeneration.