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May 29, 2019

Bank backs sector

It’s not unusual to read that the many problems we face in society today are linked to a chronic underinvestment in the institutions of civil society. What is unusual is when the person delivering that critique is the Chief Economist of the Bank of England. In a wide ranging speech on the impact of the current technology revolution, Andy Haldane argues we need to completely rethink the concept of work in terms of it always being paid (even admitting he’s intrigued by the Universal Basic Income) and argues the voluntary sector must finally grasp the benefits of digital.

Patrick Butler, The Guardian

Andy Haldane, chief economist at the Bank of England

Much of the discussion of the fourth industrial revolution relates to the disruptive impact of artificial intelligence, robotics, biotech, and big data on the world of work and business. It could lead to huge gains in productivity, wealth creation and human happiness. Equally, it may kill millions of jobs, fuel social tensions, and widen inequality. Civil society’s place in this massive societal shake-out, reckons Andy Haldane, is relatively unexplored – but it will be profound.

Haldane, the Bank of England’s chief economist, is regarded as a “maverick” thinker among central bankers on account not only of his views on banking and financial regulation, but society more widely: from poverty (“scarcity of money reshapes your brain and reshapes your decision-making”) to the importance of trade unions. The engaging, comprehensive school-educated west Yorkshireman was dubbed one of the 100 most influential people in the world by Time magazine in 2014. Said to be in the running as the Bank’s next governor, this week Haldane delivers a “mini-manifesto” on the future of civil society.

Its role in the next epoch, he says, will be the one it has always played at times of great social change: to provide a stabilising force, and support individuals and communities displaced by technology. By civil society he means not just charities, but also faith groups, trade unions, volunteers, carers and grassroots movements for social change, like #MeToo or Extinction Rebellion. The sector’s other task is to help prepare citizens for the seismic eruptions ahead, providing a sense of purpose and meaning – community glue, if you like – as an antidote to the conditions that have helped fuel Brexit and populism.

He is clear that civil society – neglected politically and financially – is not currently in a fit state to fulfil this role. “The reason we have the triple threats of disconnection of people from society, mistrust of institutions, and the rising tide of populism is because we have structurally underinvested in [civil society],” he says, citing former Indian central banker Raghuram Rajan’s book The Third Pillar. “We have let the local community pillar break down and wither.”

One way to renew it would be to make it more visible and prominent, he says. It is not taken seriously like the private sector, or even the public sector, because we don’t measure it. In 2009, Haldane helped found a charity, ProBono Economics, which lends volunteer economists to charities to help them measure the social value they create (or don’t create). The Office for National Statistics should scale this up, measuring the social contribution of the sector as a whole to highlight the value of its social contribution, Haldane believes.

‘Work is what you do for others; art is what you do for yourself. I like that. What could be more ‘doing things for others’ than volunteering?’

This is partly cultural, he argues: we don’t see volunteering as “work” because it is unpaid. We need a broader conception of what work means. “Someone offered me the Stephen Sondheim definition of work, which is basically ‘doing things for others’. There is no connotation of income. Work is what you do for others; art is what you do for yourself. I like those. What could be more ‘doing things for others’ than volunteering?”

The second step is for the voluntary sector to reboot itself by grasping the benefits of technology. Charities, he says, are by and large late adopters of tech. “I would love a stronger partnership between the technology sector and the voluntary sector to harness that technology. It strikes me this would be win-win for both sectors”. The third is a new framework for civic service, embedding volunteering in people’s psyche at an early age in school, and nurturing it throughout their working life by treating it as a core part of a career progression, indivisible from paid work, and rewarded accordingly.

The fourth industrial revolution will deliver billions of hours more free time to people who live longer, he says. But if we want the millions of people whose jobs are taken by robots to volunteer, how do we reward them? Does the social security system – obsessed with the seeking of paid work as a condition of receiving state benefit payments – accept that civic service might fulfil that condition? And what might be the implications for the paid labour market of a mass army of volunteers? Would there be a role for a universal basic income?

“I don’t know what I think about universal basic income to be honest … that’s the god’s honest truth,” says Haldane. He says he’d rather duck the issues of its feasibility and financing. But he is intrigued by its potential desirability. Work is valuable because it gives people a sense of purpose, and because it signifies to others that you are making a contribution to society. If a basic income was “earned” through linking it to volunteering (which would be recorded on a digital civic service “passport”) it would in theory meet both those requirements. He cites the Young Scot charity, which encourages citizenship and volunteering and rewards it, in part via a shop discount card, as evidence the idea is feasible. “If civic service is interlaced within a 100-year life and 70-year career, then your Young Scot card shouldn’t stop at 26, it should extend until you are 95.”

He accepts the politics of an expanded civic sector are not straightforward. He is dismissive of David Cameron’s “big society” idea as “an essay question that was never answered”, and one that was “polluted” by its perception as cover for major public spending cuts. His view is that a renewed civic sector would exist alongside a “more socially purposed corporate sector” and a state and public sector that provides insurance and infrastructure support.

The boundary between paid work and volunteering, he accepts, is politically contested, requiring “careful thought and management”. But if the direst predictions of the fourth industrial revolution come to pass, it can’t be ducked. “We know that organisations who draw on volunteers, like the NHS, have found a way of navigating through this, so I don’t think it is beyond the wit of humans to think about this. But if this is the direction of travel, those issues will need to be confronted head-on, maybe to a greater degree than has happened so far.”