Book review: Fintech Revolution, by Sofie Blakstad and Robert Allen

I don’t really understand blockchain. I have a working knowledge of what it is and and does, but if I have to explain it to someone else, I am soon lost among the merkle trees. Since we’re hearing more and more about it, along with many other financial technologies, I could do with a proper introduction. Hence Fintech Revolution: Universal inclusion in the  new financial ecosystem, by and , a book I have been waiting for.

Blakstad and Allen are perfect guides. They’ve worked in a string of major banks and advised on digital banking at the highest level. They’re also practitioners, currently CEO and chief strategist at , the Copenhagen-based small business platform. They invite the reader to treat the book as “a how-to guide to building a bank, or as a guide to the evolution of alternative finance, or as a commentary on global socio-economic change driven by technology.”

Their particular interest is inclusion – how new services are reaching those who have previously been outside of the banking system. That’s 40% of adults around the world, many of them working and doing what they can, but with no bank account or access to finance. To mainstream banks these customers haven’t been worth the risk, but that’s left a niche that new tech companies can fill with specific services. Perhaps the most famous is M-Pesa in Kenya, the mobile phone based payments system. Then there’s accounting software like Quickbooks, which has reduced costs for small companies. There are blockchain systems that can support sustainability outcomes, including , which I generate myself on my roof. There are challenger banks, peer-to-peer loans, crowdfunding, and alternative currencies such as Bitcoin and Ethereum.

The last of these have been hijacked by speculators, but that hype is a short-term distraction from the deeper revolution going on behind financial technologies. Around the world, people are leap-frogging traditional banking to benefit from leaner, more equitable finance. Like renewable energy, it is more democratic, decentralised and in many cases resistant to state control or elite capture. The whole sector could receive a major boost if the next financial crisis causes a flight into digital alternatives, and eventually fintech could even prove an existential threat to high street banks.

The authors have structured the book with a series of chapters on the underlying trends, and then chapters on new responses. This is useful, as the reader gets a sense of the technologies emerging in context, seeing how the failures and gaps in the traditional banking sector have created new opportunities. I’d have liked a few more detailed case studies, and perhaps some background explainers on key technologies. The book dips into business-speak from time to time and can occasionally be technical, but the authors say at the outset that it’s a book to pick and choose from. So, yes to chapters on ‘leapfrogging banks in emerging markets’ and ‘green fintech’ for me, and no thanks to ‘case managed and core standardised capabilities’, whatever those are.

A book like this will inevitably capture a moment in time in a fast-moving field, so if you’re going to read it, make it soon. I certainly found it helpful, even if I still don’t really understand blockchain.

  • Fintech Revolution is available , and .

Review: Will China save the planet? by Barbara Finamore

The future of the climate depends in large part on China. As the world’s biggest emitter of greenhouse gases, the policies that China pursue as a nation affect all of us. In the past, it’s very much been a climate villain. It was China that killed any hope of a deal in Copenhagen in 2009, and their rush into coal power made every attempt to lower emissions elsewhere look pointless. But that view is out of date, and China now leads the world in solar, wind power and electric vehicles.

This story isn’t well known. It’s not been widely reported, and lots of the key information is in Chinese. Not many environmental NGOs have a presence in China, and it’s not easy to follow developments. So this little book by Barbara Finamore looked like a must-read. She’s a strategic director at the Natural Resources Defense Council, with 25 years experience in environmental law and energy policy in China, and her book is a very good guide.

There are just five chapters, one each on climate diplomacy, ending coal dependency, promoting clean energy, electric vehicles and green finance. It explains how China came to see how vulnerable it was to climate change, and that addressing it was completely in its national interest. Coupled with a crisis in air pollution, the government has tackled climate change with a rare urgency and sense of purpose. China’s regional governments have slowed things down, but the huge investments that have been made in solar power, wind and battery technology have lowered prices and accelerated the transition worldwide. We’re all benefiting from Chinese investment.

‘What’s the point of reducing my carbon footprint when China is building a new coal power station every week?’ used to be a regular excuse a decade ago. Here’s the updated version: “Every hour, China now erects another wind turbine, and installs enough solar panels to cover a soccer field.”

Finamore contrasts China’s approach to that of the US, now the only hold-out against the Paris Agreement. China is leading in green technology because it spotted the opportunities. Technologies that were going to be vital in the 21st century were being ‘bypassed’ or even deliberately suppressed by other countries. Donald Trump has slapped tarriffs on solar panels and threatens to destroy the industry in the states. The British government is set to cut the solar industry off at the knees for the second time in a decade as it withdraws all support for domestic solar. We’re being held back by vested interests and out-dated ideas. China has chosen the future.

We can’t conclusively say that China will save the world, of course. The book is honest about the challenges China faces to integrate all this renewable energy. There are false incentives that have led regions to install energy infrastructure that can’t even connect to the grid. Coal regions are fighting back, just as they are in America and Australia. But there’s so much good news here, and through its investments and sheer economies of scale, China has already made a huge contribution to the technologies that are driving the energy transition.

  • Will China Save the Planet? is available , and .
  • Feature image by

Water-storing pavements for cooler cities

Cities are hot. It’s well known that the concentration of vehicles and industry, the absence of greenery and the swathes of concrete and tarmac can make urban areas warmer than the countryside – the urban heat island effect.

Since the city is hot, residents install air conditioning. But AC works by extracting heat from the buildings and pumping it to the outside, so it makes the problem worse. As incomes rise, and as global warming increases, the world is headed for an air conditioning crisis. According to the IEA, will make climate targets impossible to meet. So how do we reduce the heat island effect, and thereby reduce demand for AC?

Green space is an important factor, including green roofs and walls. I like the ‘vertical forests‘ that architects have been experimenting with. Another strategy is to paint roofs white to increase the amount of heat they reflect. The problem can also be reduced by controlling traffic numbers and raising efficiency standards.

These I had heard of before. One thing I hadn’t considered was a proposal in Bill Dunster’s book ZEDlife. He suggests that rainwater should be captured and stored in concrete tanks underneath the pavement. There are several advantages – it addresses water shortages, providing water for flushing toilets, or for water features or irrigation of parks and gardens. Rainwater can also be used for car washing or in construction. It could help to ease pressure on drains during storms, perhaps working as part of a water plaza. And it could be used in cooling.

The tanks would fill through porous concrete above, which would top them up without letting in any dust or debris. Adding a solar canopy over the top of the sidewalk would allow people to walk in the shade, while the water tanks beneath their feet cooled the pavement.

The book has the technical details of how this could be done. There are also notes on adding bead insulation, integrating it with heating and cooling within buildings, and their own ice slurry cooling system. Does anyone know of anywhere that this has been done?

Book review: Overripe Economy, by Alan Nasser

One of the metaphors Katherine and I use in our book is that of an overripe economy – how we’re at risk of letting the fruits of growth rot before we get to enjoy them. I hadn’t seen anyone else use that particular comparison until I saw the title of Alan Nasser’s new book, . I thought I’d better check it out. I’m running through the copy edits this week. If Nasser had any particularly pithy fruit-related quotes, I’d be able to jam them in.

As it happens, the metaphor is used as fleetingly as we use it ourselves. In a nutshell, “secular stagnation, bubble-driven slow growth, declining living standards and growing inequality” are what Nasser considers to be the “abiding features of mature, overripe capitalism.” It’s late stage capitalism, captured by finance and being stretched by automation and globalisation. Inequality is surging, the middle classes are falling behind, and elites are capturing more money and power. This ‘exhausted’ capitalism “can be prolonged only at the expense of democracy and of material and psychological security.” Unless something radical is done about it, austerity and stagnation are the new normal.

In fact, Nasser argues that capitalism that benefits everyone is the exception and not the rule. Most of the time the wealth does not flow to ordinary people, but to the elites. There are just two periods in America history when downward redistribution was working and everyone was gaining – the roaring 20s, and the postwar period from 1949 to 1973. The rest of the time, wealth has gone to the wealthy, and living standards have been boosted by debt and credit to give the illusion of progress.

The book explains this through a chronological histroy of American capitalism, from the boom years of railroad building, through the great depression, the post war settlement, crisis, Reaganomics and so on. As a socialist scholar, the book highlights the roles of unions and the labour movement, showing how collective bargaining and labour power was able to win concessions, and how it has at various times been suppressed. There’s a lot of little details here that I hadn’t heard before.

Later chapters cover the more familiar territory of the financial crisis, automation, and globalisation. You can see the conclusion coming: what America needs is “organized working-class resistance”, wrestling the means of production back into public hands, and a new democratic socialism. Perhaps if Bernie Sanders had won the primary, we’d be seeing right now what American appetite for that might really be.

Those conclusions are par for the course. What I found more disappointing is that the environment is completely invisible in the book. No mention of climate change, waste, resources, or pressure on the natural environment. As far as Nasser is concerned, the American working classes are underconsuming. They need higher wages so that they can stimulate demand and break free of stagnation. But further American growth isn’t wise or ethical in our hot and crowded world. We need more imaginative solutions than that.

“Every industrially mature capitalist society reaches a critical developmental stage” Nasser writes. “At that point the kind of real economic growth that brings secure employment and living standards to the majority, much less to every working household, slows down.” Correct. That point of maturity is what I call Arrival, and it presents us with a choice. I argue that what comes next is a switch to a postgrowth economy that embraces quality rather than quantity, inclusion rather than endless enlargement. But for Nasser, it’s all about handing responsibility for wealth creation back to government to deliver that endless neverending more.

  • Overripe Economy is published by and is available , and .

The Economics of Arrival – about our book

I’ve mentioned it a few times, but I’ve haven’t yet given you a proper introduction to what I’ve been working on with over the last couple of years. Now that the publishing details are all confirmed, let me correct that. Our forthcoming book is called , and it’ll be available from Policy Press on the 15th of January 2019.

The book covers many of the themes of the blog, but wrapped around the central concept of ‘arrival’. That’s the reality that in the world’s most developed countries, decades of economic growth have already achieved what previous generations hoped for. We have arrived, and it’s time for a new challenge – how to make ourselves at home with this prosperity, and make sure that everyone is included.

It’s a vital question, because in pursuing ‘more’ past the point of a generous enough, we risk losing everything we’ve already gained. Inequality, climate change and fractured politics are already undermining the prosperity that we worked so hard to achieve.

Embracing a postgrowth economy isn’t about limits or self-restriction. It’s a success story: the work of growth is done. It’s time to talk about improving rather than endlessly enlarging, to shift from quantity to quality.

The Economics of Arrival is more researched and scholarly than the blog here, thanks to Katherine’s robust academic credentials. It’s packed with positive solutions and real life examples that demonstrate what we’re talking about, and it offers new language for describing the possibilities of a postgrowth future. It’s got a great foreword from Kate Raworth of Doughnut Economics, and we’re delighted to be with a too.

I’ll say more about the book and its messages when we get nearer to publication, but if you’re so inclined, you can