Saturday, 21 March 2009

Litter and mutual building societies

In the last few days, there have been two stories featured in the news that have something in common. One was about a local litter problem and the other about the re-establishment of mutual societies. You are probably wondering what on earth connects these two. The answer, I think, is that they show us what can happen when individuals decide to take action and organise locally.

The BBC reported that Yvonne Froud was so frustrated with the litter caused by her customers that she is asking the children to write their names on the wrappers of sweets they buy with an indelible marker pen.

Today, the FT, reports that Alistair Darling is exploring how to help mutuals develop and looking at offering more support to credit unions.

Froud's scheme works because her shop is situated in a small village. She knows the name of all the children. If they write a false name she will know. If she finds a wrapper on the ground she can easily trace the culprit. She can also apply her own sanction: deny them the merchandise she sells or ask them to do some 'community service' and clean up some rubbish.

If Froud didn't know their names she couldn't run her scheme. If she didn't own the shop she would not be able to decide to forgo revenue for the sake of her local area. These things are crucial. She is in control of what she wants to do and has knowledge and the power to do it. The scheme would not work in a large town let alone a city.

Mutuals were developed to answer a need. They came from their local areas to support people and help them with their financial situations. The recent rise in credit unions reflects the continuing demand for such services.

Mutual building societies were given the option of demutualising in the 1980s. Many went down that road, pushed by their owners who saw that they could earn money once their stake was transferred into shares. Some like the Nationwide Building Society resisted.

Putting aside the irony that now central government is going to have re-create a local initiative because central government allowed the mutuals to change their status, both examples show how individuals with knowledge and expertise of their surroundings can react and contribute to their community.

Each case is different. The same method can't be applied everywhere. But the principles behind both instances can be. Self-organisation by communities can address problems in ways appropriate for those communities.

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