Friday, 30 January 2009

Free Market economics

As everyone probably knows, understanding economics is not my strong point. However, having survived being self-employed for over 40 years, and created a relatively successful organisation from next to nothing, I have learned a few things along the way. The first thing I would observe is that the idea that a totally free market is a good way of letting the world run its affairs is probably daft. It is difficult to pinpoint any period in history where it has actually worked. And the reality is that the current so-called 'free markets' like the 12th century in England, are actually far from free -- they are heavily skewed in favour of a select few, who make vast profits.

The second observation I would make, is that small may not be always beautiful, but huge is certainly disastrous. To me it is blindingly obvious that there are limits to growth, and that when corporations get absolutely huge, they are bound, at some point to collapse. The only reason for them getting so big appears to be in order to justify vast salaries for the people who run these behemoths. Does anyone think to ask how 'efficient' or sensible it is to have to spend vast millions sorting out the trail of problems left behind when these huge companies collapse? Surely the only huge corporations that should exist have to be state owned? That way vast profits cannot be creamed off into private pockets, but can be reinvested for the public good? And when the mega-corporations get so big, the whole argument about competition collapses anyway -- they become de-facto monopolies. There were very good reasons for nationalising railways, water companies and power companies with monopolies. And very flimsy, selfish reasons for privatising them. And not good for the environment either. Perhaps if capitalism is to survive, a limit to capital needs to be imposed. That way when collapses occur, then they will not bring down whole economies.

In the course of developing the World Land Trust, I have seen that there are important economies of scale. But as we grow, I also see a loss of flexibility, a loss of dexterity and innovation. The trick is to keep a balance. But I am certain that there is a limit to growth, beyond which the organisation loses sight of its original vision. A point at which the number-crunchers take over. As I have mentioned elsewhere, business methods are introduced, and 'efficiency' is measured in purely financial terms. Despite the spectacular growth of the World Land Trust in the past few years, so far we are keeping our enthusiasm and our vision. But stopping it becoming another 'corporate conservation organisation' is the challenge ahead.

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