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August 26, 2009

Civil Society should get organised

The Third Sector in Scotland shares many core values with the churches; the unions and other civil institutions. We would all have more influence on public debate if ‘Civil Society’ spoke with a distinctive organised voice on major issues – like the trashing of our banking system and its replacement.  Stephen Maxwell makes the case

Stephen Maxwell, TfN

From sub prime crisis to credit crunch to global financial meltdown to economic recession to the beginning of global recovery. All in two years.

The speed at which a financial crisis advertised as the most severe since the 1930s has apparently moved through its cycle is breathtaking. Champions of the existing system – and these include virtually all developed country governments concede that the after effects of the crisis, particularly high unemployment and its long tail of social consequences, will persist. But they claim that their emergency actions have averted the danger of a long haul depression on the scale of the 1930s, and look forward to a resumption of business more or less as usual.

For the defenders of the system an additional advantage of the speed at which the cycle has turned is that the critics have not had time to develop a persuasive alternative let alone promote it to the wider public. Apart from calls for curbs on bankers’ bonuses, proposals for the separation of retail and wholesale banking, customer representation on bank boards, and the creation of a publicly owned banking sector through the outright nationalisation of RBS and Lloyds, have failed to gain a hearing beyond the pages of the Guardian or the Opinion supplement of The Sunday Herald. More radical proposals, such as for the development of a community banking alternative to the commercial sector, have failed to reach much beyond the columns of the minority radical magazines.

Civil society is fully implicated in this failure. For the past decade or more third sector zealots have been talking up civil society in general and the voluntary sector in particular as the vehicle of a new wave of social mobilisation inspired by a shining vision of an empowered democracy of active citizens. But the global crisis has found civil society so far lacking a distinctive organised voice. As the sceptics predicted it has continued to speak with the many voices of its organisational diversity, perhaps the only common feature a tone of increased desperation at the social costs of the existing system.

But Scottish civil society has an opportunity to contribute to the so far exiguous Scottish debate. (The reasons for the poverty of Scottish debate lie too deep in Scotland’s institutional deficits to be excavated here). The parliament’s economy committee is carrying out an inquiry into the impact of the global financial crisis on Scotland and how the country should respond. Its invitation for submissions is no doubt aimed primarily at Scotland’s financial and business community, but despite some tendentious questions – for example “how can we ensure that Scotland’s financial sector retains a global perspective and does not retreat into a purely localised lending regime?” The committee’s agenda provides plenty of scope for alternative perspectives from the third sector.

The range of groups with a locus to respond is wide – anti-poverty groups, urban and rural regeneration groups, financial mutuals including credit unions, housing organisations and campaigning groups, social enterprises, charity banks, groups supporting unemployed and other economically vulnerable people. Indeed any organisation whose members are feeling the impact of the economic recession triggered by the failures of key UK and Scottish financial institutions and of the UK regulatory system charged with securing their stability could respond.

Ideally, interested organisations should collaborate in developing their responses but a 11 September deadline precludes that.

So here’s an entirely personal template for voluntary sector submissions: the role of the existing

financial sector in creating and sustaining gross inequalities; the human and economic costs of such inequalities; the need to create a Scottish financial system which serves the urgent social and environmental as well as economic needs of Scotland; the underdevelopment throughout the UK of the mutual and community based financial sector compared to other developed economies including the US and Canada; the need for a UK and Scottish strategy to redress that underdevelopment; the role of a not for profit financial institutions; the failure of the UK regulatory system to protect the established Scottish mutual sector and the stability of other key institutions; a Scottish say in the regulation of a reformed Scottish financial sector.