The Three Pillars of Community Economics

Alastair McIntosh

Throughout the 1960s many delicious species of fish such as haddock, whiting, and cod could be caught on handlines baited with shellfish in our sheltered sea lochs on the Isle of Lewis. As I grew into my early teens I was allowed to put to sea alone. At first my mother would be anxious, especially on windy days when white horses rose up on wave crests, indicating a gusty Force 5 wind. ‘Don’t worry,’ my father would tell her. ‘There’ll be at least three telescopes trained on him, and if there’s any problem, the boys’ll be right out.’

And that was the way of it. The simple activity of a youth going fishing connected in with the human ecology of the whole village. The mussels used for bait might have been gathered by Norah on the low tide a couple of days earlier. The old men were unpaid coastguards. Everybody had a useful role.

Whenever I came back with a good catch, I’d share it out as I cycled home through Leurbost. Few people then had fridges; still fewer freezers. There was just no demand for them. Neither was there money to buy such hardware. If you had a supply of something perishable, you shared. When your neighbours had a surplus, you received. People’s ‘deep freezes’ were, in effect, the village itself — with the advantage that what you got was always fresh and there was no need for nuclear power stations or defrost disaster insurance policies.

I now understand that the society I was privileged to be a part of was based upon an economy of mutuality, reciprocity and exchange. These qualities mattered to us at least as much as cash transactions did. The social thinker Ivan Illich has called such a system ‘the vernacular economy’. This is, he says, like our vernacular, or mother tongue. It is a way of doing and being that is learned, effortlessly, through the culture. Often we do not realise that we have it until it goes. However, it would seem to me that if such principles can be communicated afresh, they could be of value to community groups everywhere that are trying to develop what E. F. Schumacher called ‘economics as if people mattered’. Allow me, therefore, to explore the economic workings of what I have just described.

In the Hebridean vernacular economy, people understood themselves to be responsible for one another. Everyone was their brother’s and sister’s keeper. At the deepest level of care is mutuality. As the owner of a fishing boat, let’s say, I will give you fish simply because I have plenty and you have need. It would be nice if you could give me some eggs in return, but only if you’re able so to do. If you can’t, because you are too sick, too old, or just a bit feckless, somebody else will see that I have eggs. The fact that I have a need will get around, because gossip is the oil of oral culture. It lubricates relationships and we slander its character when we, the children of written truth, unthinkingly predicate it with the adjective ‘malicious’.

Now, my giving you fish comes from a sense of obligation, because we are mutually part of the community. Likewise your giving me eggs. And nobody keeps a formal score of things because the village economy is centred around seeing that everybody has sufficient. In this system sufficiency is the measure of prosperity. Surplus is for sharing before trading, and the joy is in the giving, not the accumulating. Our ‘poverty’, if it is that, is a dignified frugality, not the degrading destitution of economies where an elite harbours all the resources to profit from artificially maintained scarcities.

Let’s move on now to the second pillar of the vernacular economy:

reciprocity. Here I catch the fish and you, let’s say, still produce eggs. I agree to give you fish if you keep me in eggs. However, in this conditionality we measure only the function and not the degree of our sharing. If the fishing is bad, you still give me eggs. If the hens are moulting and therefore not laying well, I still give you fish. What we see here is a communal division of labour system. It differs from mutuality only insofar as it makes explicit that there are no free lunches and everybody must play their part. Usually, in a vernacular society, relationships will be reciprocal when people are fit and of an economically active age, but mutuality comes into play as a safety net when they are unable to care for themselves. In Scotland folklorists have called this the ‘Highland Welfare State’. And we might note, in passing, that many of the older British co-operative insurance companies called themselves ‘mutual societies’ — at least, they did before privatisation became all the rage.

The third vernacular pillar — and we’re seeing a spectrum of economic understanding emerge here — is exchange or barter. Here the principles of measurement that lie behind cash economies drop into place. In a barter system, I give you, say, one fish in exchange for three eggs. In other words, goods and services have a price fixed in terms of other goods and services. Goodwill is no longer the primary driving mechanism, but we are still sufficiently connected to each other for the economy to be personalised. The immediacy of exchange means that, most of the time, we can see where our produce is coming from and we know who makes it. This helps to maintain norms of social and ecological justice.

The problem with barter is its rigidity. If I have fish to trade but you don’t want eggs, we cannot do business. That is where, fourthly, cash enters the equation. It lubricates between supply and demand for goods and services. Money is, at its most primitive, just an accounting system. It records our obligations to one another using banknotes and other bills of exchange as IOUs. These are given legitimacy, normally, by a government bank in which people have confidence. That confidence demands faith. The focus of such faith, however, has moved away from an immediate relationship with a home community and a local place. Mainstream modern economics is, in consequence, based on financial realities. These, at their core, are social and psychological expressions of power rather than being faithful reflections of ecological reality. That’s how financial and ecological economics differ.

During the twentieth century the Isle of Lewis underwent an economic transition such as more ‘developed’ parts of the world had experienced much earlier in history. The island shifted along the spectrum of mutuality, reciprocity and exchange, headlong into the cash economy. Once surpluses were shared and this yielded goodwill. Mutual dependency was the glue that facilitated social cohesion. Now, because money (unlike fish and eggs) does not rot, it can be invested, yielding interest, a dividend or capital gains. Money thereby takes on second-order characteristics over and above its primary accounting role: it makes money out of itself. This has the effect of shifting benefit away from the community and towards individuals. It assists the concentration of wealth, and that leads to an increasing rigidity in access to resources for the majority.

Whereas the vernacular economy is necessarily mindful of the human and biological processes by which goods and services come into being, the new way capitalism reduces human labour and nature’s providence to figures on the London or Tokyo stock exchanges. It hammers whole ways of life into speculative chips, drip-feeding a casino economy. Such is the essence of neo-liberal globalisation: competition subsumes the cooperative relationship. Government is forced out of the economy, but money then takes its place as king and it cares little for community or environment. Plutocracy — government by the rich — yields inevitably to oligarchy government by the few. Reverence falls by the wayside, having become an irrelevance. People know that something is wrong. But it’s hard to see what’s wrong, and the world goes on, after a fashion.

Alistair Macintosh

This is an extract from Soil and Soul: People versus Corporate Power (Aurum Press, £12.99)

— Extract published in The Social Crediter, December 2002