Preface

Why would anyone want to write a book about economics if it is not their trade? And more to the point, why would anyone want to read it? I had better start with the first question and perhaps that may also supply an answer of sorts to the second.

The motivation is straightforward enough. Since childhood I have been conscious of both gross inequalities of wealth and of dangers to the environment, thanks to my parents who were very engaged in these issues. They helped run a local World Development Movement¹ group which met in our house. They were also alarmed by the risk of nuclear war – a very present risk in the 1960s, and still so today although we tend to ignore it.

My father was interested in the intermediate technology ideas described in the book ‘Small is Beautiful’ by E F Schumacher, and he bought early books analysing environmental limits, such as: ‘Population Resources Environment’, published in 1970, and ‘The Limits to Growth’ commissioned by the Club of Rome and published in 1972.[1, 2, 3] My parents did not press their views on me, but rather the material itself was convincing. At university I joined a group called Third World First² and looked to various socialist alternatives to solve these problems; subsequently once in work, I involved myself in my spare time in the British trade union and labour movement.

While my political views have evolved since then, those early concerns about inequality and the environment, seem just as valid as when my parents’ activities inspired my initial interest some 50 years ago, and indeed even more so. The constant root of those problems appears to be the economy, which astonishingly even in wealthy countries and despite ever more sophisticated technology, continues to leave a substantial part of the population struggling to make ends meet, and likewise is unable to protect our planet’s ecosystems if doing so threatens profit or ‘growth’. The ambition of this book is to spell out why this is so, working from basic principles of what an economy is and why it works the way it does. Then in a second part to the book, there are some suggestions for what we might do to improve things.

By profession I am an engineer and have always loved designing and building things. In my teens I experimented with electronics and simple computer circuits: this was 1970 when nobody had a home computer and trying to build your own seemed like the only way to acquire one! I began my working career as a mechanical engineer, but after a few years switched to digital electronics and software, generally working in what is called ‘research & development’, which in practice has meant designing things and getting them to work. Engineers are used to studying how systems work, and we base our understanding on the physics of the real world: my hope is that this approach is also applicable to gaining an understanding of the economy.

All my UK employments have been in private industry – usually large companies. Many of the great British engineering firms of my childhood have disappeared over the last 30 years – broken up, with the bits that remain now in different and often foreign hands. Names like ICI, GEC, British Leyland, Lucas, British Rail, British Steel, Cadbury’s, EMI, BOC. In the 1970s if you bought a car, TV, radio, or washing machine in the UK, it was likely to have been made here by a British-owned company. Observing Britain’s de-industrialisation, on occasion first hand when my own job was affected, raised questions about why it was happening and whether it was inevitable or should be resisted.

From 1987 in mid-career, I worked for five years for a UK aid agency, teaching in the national engineering university of Nicaragua.⁴ Nicaragua was then the second-poorest country in the Americas. It was fighting a counter-insurgency war in its border areas and the USA refused to trade with it. Nicaragua had support from some western European countries, from a great many development charities, and from the Soviet Bloc. The socialist Sandinista government fell in the 1990 elections, ending the war and blockade, and was replaced by a centre right government. Throughout all of those years, economics was a continuous source of debate and there were frequent dramatic policy changes. There were periods of rampant inflation and two changes of currency: one of these went from 10 Cordobas to the dollar at its introduction to something like 50 million to the dollar, before being replaced.

A constant question was: in a small Third-World country, what can you hope to manufacture locally? My electronics engineering students and my colleagues needed experience and some paid work to top up salaries. Seeking work and placements for them, I visited many local industries, both private and in state hands. In factories and in daily life I came across the products of the Soviet Bloc which were interesting to compare with their western equivalents: machine tools, vehicles, domestic goods such as soap, fridges and canned food, and the medical equipment in a hospital donated to Nicaragua by East Germany⁵ – seen as a patient, undergoing an urgent appendicectomy which saved my life. I had the opportunity to make a working visit to a Cuban university, and also managed a three-day stopover in the Soviet Union when flying with Aeroflot to the UK; in both countries fascinated by the economic and technological differences.

One of the results of my years in Nicaragua was that I returned to the UK with a strong respect for private enterprise and the difficulties of state management of businesses, particularly where the state is weak or inexperienced. That experience, combined with my working life in the UK being entirely in the private sector, means that despite an interest in socialism I am not ‘anti-market’. My aim is to understand why the economy behaves as it does, and hopefully, based on that understanding, some changes might suggest themselves - though almost certainly not a totally planned economy. Furthermore, I began to write the notes that led to this book in the early 1990s not long after Eastern Europe had eagerly thrown off communist rule and the system in the Soviet Union itself had spectacularly self-destructed.

Concern for the environment was brought into sharp focus in Nicaragua where I saw both the rain forest and adjacent degraded land where the forest had been cut down. During my stay I met a number of biologists working there, who taught me more about the natural world and our place in it. Concern that we are well on the way to making our planet uninhabitable has made me a supporter of Friends of the Earth and Greenpeace, and is another motivation for examining the economy and its effect on our planet.

These then are the experiences I bring to the task. Naturally, I have also studied a number of conventional economics texts and found much to learn and a great deal of interest in them – so it is with a good deal of nervousness that I share these writings, for fear of being mocked for challenging the experts. There are however numerous books published purporting to give various alternative views of economics, so possibly one more is not putting one’s head too far above the parapet.