I’ve been worrying about the management of assets for years now. Not how the wankers working for financial institutions manage assets, by which I mean mismanage assets of course, though they and their behaviour form a particularly reprehensible subset of what I’m thinking about. What I mean are the more general issues of ownership and control and justice and returns and sustainability that flow from a consideration of the total assets we as a society have at our disposal. ‘The Economics of Enough’ includes an extended anthropological thought experiment (in the style of William Golding’s ‘Clonk Clonk’, a short story available with ‘The Scorpion God’ in which the women of a Rift Valley matriarchy invent language and alcohol 70,000 years ago) that explores how and why we accumulate assets and what they mean to us in practical, social and psychological ways. I’ve concluded that the accumulation (and management) of assets is one of the four principle determinants of how our current economy functions, and that a transformation in what we look for from accumulation, and the results we hope for from its management, lies at the heart of progress towards an economy of enough.
It’s not the sort of thing one gets to talk about everyday, even in the aftermath of the most monumental asset management screw up for a century or so, so it was with some delight that assets cropped up for me in three very different ways in the past few days, thereby providing the impetus for this missive.
Appearance number one was via a meeting to discuss consultation responses to the draft London Plan with (amongst others) the Development Trusts Association. The DTA is an outfit I don’t know especially well, but have been aware of and impressed by for a long time, ever since the wonderful George Nicholson of Coin Street Community Builders took the piss out of me in a meeting before explaining how wrong he thought I was about more or less everything. The DTA brings together organisations that have, at heart, a fairly simple idea: that communities are more likely to thrive and be healthy if they have ownership and control over their own assets. Rather than being dependent on the local authority, or a supply of regeneration funding, or a private institution, a community that owns – say – a row of shops, or a set of business starter units, or a housing estate will not only have a very particular kind of stake in their community, they will also have an income stream to be spent as they see fit. Rather than pay dividends, or subsidise council services or whatever, the returns on community-owned assets are (automatically) ploughed back into that community.
Appearance number two happened when I finally got around to reading the backlog of Prospect magazines that seemed to have built up since the summer, and I encountered a piece on the Gates Foundation. The Gates Foundation, as I’m sure you’re aware, is what Bill and Melinda Gates do with all the squillions of dollars they made from Microsoft. They support a range of predominantly health-related charitable causes around the world, particularly focusing on HIV. With annual spending exceeding the budget of the World Health Organisation, it must surely be better that they do this with the money than, say, buy even bigger yachts on a regular basis.
Nevertheless, there are problems. The Prospect article, for example, wonders why the Gates Foundation doesn’t just try to eliminate HIV in the way that Microsoft eliminated Netscape, ahem; and there have been numerous critical comments in the past two or three years, in both hyperspace and the mainstream media, over the governance and decision-making processes that characterise the Foundation.
The problem is much more general, however, and it concerns any and all philanthropy. The problem is in two parts. Part one is that philanthropy (on anything other than the domestic scale) relies upon an historic exploitation of something or someone. Someone, somehow, had to become filthy rich before they could be philanthropic with their assets, and to have become filthy rich they had to have exploited either a human or a natural resource. What is the relationship between that exploitation and the subsequent use of the resources? Making money from software might look reasonably benign, so we might be reasonably relaxed about what subsequently happens to those accumulated assets.
But what if the money had been made from, say, plundering the earth’s natural resources? Oil, say, or diamonds. Does it make a difference? If you personally were to receive a grant from a philanthropist, would it matter to you how they made their money? Where is the boundary between acceptable and unacceptable?
What if they had made their money through slavery?
Part two of the problem is that there is precisely no democratic control whatsoever over what a philanthropist might do with his or her assets. Fine, at one level: they own the assets, it’s entirely up to them what they do with them.
Except that, at a certain scale, philanthropic behaviour makes a material difference to environmental and social outcomes. The reason people get their knickers in a twist about the Gates Foundation is precisely because the sums of money are so vast: they are big enough to crowd out other spending and they are big enough to make or break national-scale initiatives. Imagine if your community was dependent on the Gates Foundation for some reason – and then one day they changed their mind. What could you do?
The US has a much stronger tradition of philanthropy than either the UK or the rest of Europe, of course, so maybe they’ve got it sorted over there, but with organisations like New Philanthropy Capital promoting the idea that ‘high net worth individuals’ should be going down the philanthropic route it seems to me we need a rather better framework. Governments are in a position to take a strategic overview of what a nation needs, and to manage assets accordingly. If we don’t like it, we can vote for a new government. Philanthropists can indulge their pet preferences as they see fit, and there is no reason to suppose that the net impact of a supply of philanthropy will in any way match need. In fact, given the preference for photo-opportunities and good media coverage, it is quite obvious that some causes will be more attractive to the arriviste philanthroper than others.
My third experience of the asset question occurred in Richmond Park, a place I visited for the first time fairly recently. At the western edge of the park, on a brow with commanding views and very near to Ian Dury’s bench, there is something called ‘Henry VIII’s Mound’. It is, unsurprisingly, a mound, quite small, perhaps three metres across, built atop the brow some five hundred years ago. Stand on the mound facing north east and one is confronted by a ‘protected view’: a view of St Paul’s Cathedral, slightly more than ten miles distant. It’s an extraordinary thing. In the foreground, the trees have been carefully pollarded and pruned to ensure a broad viewing channel to the edge of the Park itself; while, in the middle and distance, there are no tall buildings that would obscure the Cathedral.
The protected view has been in place since 1709.
Even as a write it now, having had a few weeks to allow it to sink in, it virtually takes my breath away. For three entire centuries, nobody has been allowed to build anything that would prevent someone standing on a mound in Richmond Park from seeing a cathedral in central London.
‘Nobody has been allowed’? Says who? And here’s the asset question. The Park is a ‘royal’ park: it is owned by the Crown. The cathedral is owned by the Church of England – the head of which is (at the moment) the Queen. Down here we may have had capitalism and representative democracy and elections and wars and all sorts of turbulence and comings and goings, but up there there has been serious long run asset management. It’s impressive; and oppressive. Want to build a building here? Sorry mate, no way. I know you own the land, and would create money and jobs and housing if you built it, and I know it’s a free country and all that, and yes I know you and your community voted for a council that shared your outlook, but I’m afraid that greater powers are at work: there’s a mound thataway and a cathedral thataway and you’re simply not allowed to get in the way.
You can see how conflicted I am about all this. My soul says, without hesitation, that this view is extraordinary. It is, simply, amazing that this exists, that it has existed for centuries. And, at the same time, it is simply amazing (the other way) that despite all that has happened in human affairs in the past three centuries, a monarchical ownership and control structure remains in place.
Would a democratically accountable local authority ever have managed to protect a magnificent view for three hundred years? Could a community trust have done it? If I want something to endure for a very long time – if I want something to be truly sustainable – does that mean I need an inviolable institution? Or a wise philanthropist? And if I want that, I simply have to give up on the idea of control and ‘trust’ them?
Or, if I want control, democracy, accountability, I have to run the risk that everything will change and that the beautiful and the magnificent will be as vulnerable as everything else.
Perhaps there is some ideal mix, a balance of institutional forms and forces that maximise the chances of long run sustainable outcomes. Over this I shall mull. In the meantime, and to conclude, who’d have thought that that the word ‘assets’ has its origins in the Latin for ‘enough’? I wrote an entire book about ‘enough’ that concluded that a big part of the answer was ‘assets’; but if I’d started with ‘assets’, enough would have been there all the time.