26 July 2022 Parks | Debt
Remaking a public park // The invention of consumer debt
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1: Remaking a public park
There’s a fascinating story in the Sheffield Tribune, a newsletter-cum-newspaper about the city, about the transformation of an open space, the Deep Pits Park, from being a dumping ground to being one of the city’s best public spaces. It’s written by David Bocking.
When I say a dumping ground, one of the interviewees remembers counting 130 burnt out cars on the site as recently as the mid-1990s.
Since parks are increasingly important, for all the reasons we know about, it’s worth spending a bit of time unravelling what they did to remake the space.
Flowers in bloom at Manor Fields. Photo: Green Estate.
It wasn’t cheap: it cost £2 million, paid for with European and national regeneration grants. The design took in issues that included water run-off, the area’s history, safety, and aesthetics:
Designing beautiful fences kept out joy riders and also helped to make the park so visually appealing that no one in their right mind would consider vandalism. They also made use of the location’s older history by harnessing the landscape of deer park and coal mines to turn the space into something stunning that locals would love.
The park is part of the city’s drainage system, and water is captured in channels that run through the park, held in the landscape, and cleaned by ponds and vegetation as it runs down the hill:
(A)fter heavy rain, when surface water gushes off local rooftops onto the street, it’s captured by channels and cleaned by vegetation and small ponds as it runs down the hill. If water levels are high... larger ponds start to appear on some of the banked flat ground used for football and picnics in the summer... The Manor Fields SUDS (Sustainable Urban Drainage System) is designed to slow and clean the flow of surface water into the city and help prevent flooding by holding rain water on the hillside.
To encourage use of the space by locals the landscape team, based at the University of Sheffield, used seed mixtures that were designed both to germinate in poor soil and produce rich displays of flowers for much of the year. There’s apparently been sone criticism of using garden seeds rather than local plants, but it seems to be working:
(A)s (part-time park manager) Ted Talbot wanders round the park, he observes native birds foot trefoil, heather and rosebay willowherb mixing with cultivated daisies, the fluffy “lambs ear” or Staychs garden plant and the striking “giant white fleece flower” planted as an experiment to fight it out with brambles while flowering like mad.
“This is not a National Park or a protected landscape, so we can be a little more liberal with our use of garden flowers,” says Ted. He tells me that since we’re in an urban park setting, anything that provides food, shelter and nectar already starts to help insects, birds and mammals.
The park has won awards, and has succeeded in creating a valuable public asset in a historically deprived part of the city. One of the factors in this seems to be down to its ownership and management:
(R)ight from the start it was managed by the Green Estate social enterprise, set up to look after Manor Lodge, Manor Fields and several other local green spaces to benefit the people of S2. Green Estate gets a council grant towards some of its landscape work, and also raises money from commercial landscape management, green waste disposal and venue hire.
Of course, the British government’s reckless social experiment in starving local authorities of cash over more than a decade means that a lot of public assets—like parks and libraries—are cut back to the bone. But we know that mixing socially in green spaces is good for our wellbeing, while trees and vegetation cools a city’s air and ground during heatwaves.
After years of austerity to the public sector, local authorities inevitably focus on non-statutory services, like museums, libraries and parks, when they have to make cuts, says Ted.
“I see no practical evidence that this is turning into anything other than a catastrophic decline in the funding of parks and countryside. But it is an archaic approach if you do the maths on preventative health and keeping people out of the NHS.”
2: The invention of consumer debt
Debt structures our lives in all sorts of ways, and these have been extended over recent years, as a whole generation of British university graduates can remind us. There’s a short piece at JSTOR Daily—looking at the evolution of debt in the US—that reminds us that the commercial provision of debt for households is a relatively recent phenomenon.
In the nineteenth century, Hyman points out, if an individual needed credit, they turned to friends, loan sharks, or local merchants. For corner grocers and country stores, these loans were money-losing propositions with no interest charged. Any institution with a lot of money lent it not to consumers but to businesses.
And what changed that was the emergence of the motor car as a mainstream market phenomenon.
This changed with the rise of the automobile. In the 1920s, finance companies emerged as middlemen, borrowing from banks and lending to car dealerships, which could then extend financing plans to individual buyers.
“For the first time, money from the core of capitalism, the consumer banks, was invested, albeit indirectly, in consumer debt,” (historian Louis) Hyman writes. “What began with automobiles spread to vacuum cleaners, furniture, radios, and nearly every kind of durable good desired in the great boom of the 1920s.”
That didn’t go so well, of course. The Wall Street Crash led to the Depression. The US government had to step in—also inventing the giant savings and loan, known colloquially as ‘Fanny Mae’, to underwrite mortgages held by banks.
With the post-war consumer boom, the market for debt grew and grew. General Electric had created a subsidiary called GE Credit Company to help consumers pay for its products (kitchen appliances and so on). By the 1960s, this had become a behemoth:
In the 1960s, GECC took on a life of its own, offering revolving credit to finance all sorts of products while also running various retail companies’ credit operations. By 1969, one in twenty-five households was using GECC credit in one way or another, and the division eventually grew to provide the majority of GE’s profits.
And after Jack Welch took over GE in 1981, when he basically turned it into a finance company rather than bothering too much about the company’s manufacturing core, it came to provide most of GE’s profits.
(Jack Welch by Mike Licht/flickr. CC BY 2.0)
When I was a journalist in the 1980s, Welch was regarded as a role model for the business community because of the way he had improved the profitability of GE. He was nicknamed ‘Neutron Jack’—because he eliminated people and left the buildings intact—which tells you most of what you need to know about his management approach. In practice, he presaged most of the destructive business practices associated with ‘shareholder value’ that have gutted businesses in the last 40 years, and as it happens he’s the subject of a critical new book by David Gelles. The slightly over-excited title and sub-title tells you pretty clearly where he’s coming from:
The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy.
There’s an interview with Gelles at Forbes where he explains his argument. But it turned out that the pursuit of ‘shareholder value’ was also the pursuit of ‘short-term value’, and that driving a business by narrow financial metrics was not a sustainable way to run it, even if it did wonderful things for the size of executive bonuses and stock options.
GE’s decline after Welch’s departure was almost as sharp as the rate of decline in Welch’s reputation as a business leader. (John Kay tells a similar story about the decline and break-up of ICI in the UK, once an industrial behemoth, after the board decided to pursue shareholder value as a central business principle). Managers who cut their teeth at GE went on to run Boeing, and Gelles traces a direct link to Boeing’s disasters with the 737 Max.
Of course, the rise of the idea of ‘shareholder value’ and the rise of consumer debt are two sides of the same coin. The book tracks an 80-year period from just after the Second World War which matches the history of debt as the centrepiece of Anglo-American capitalism. Of course, something that can’t go on for ever won’t go on for ever, and trying to use debt to drive the economy broke it in 2008. A memorable quote from Hyman traces that turn back to the 1970s:
“Whereas in the postwar period, the 1 percent paid the 99 percent in wages,” Hyman concludes, “After 1970 the 1 percent increasingly just lent the 99 percent money.”
Gelles sees the process of moving away from this as a generational transition—and that it’s going to take a generation to repair the damage. As he says in his Forbes interview,
Maybe we’re at that moment in a pendulum's arc where it pauses and starts to begin its trajectory back in the other direction. I hope we're there because we need to reset... We're starting to see that Welch’s philosophy has led us to a moment where cities in the middle of the country are hollowed out, communities across the country are starved for resources, and the tax base is unable to fund things like education and infrastructure.
These are choices we've made. We can make different choices that create a different kind of economy.
j2t#351
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