Firstly, on Monday, we had very upbeat local press and TV reports "Aberdeen to lead in economic recovery" This is from local TV station STV.
Aberdeen has been named one of the “cities to watch” as it is predicted to help Scotland come out of the recession and be protected from the effects of the Government's spending cuts.
The Grantite city is best-insulated from the economic impact of the government's spending squeeze and the best-placed to grow out of the economic downturn, the Center for Cities said.Well, that sounds like great news! We noticed that local newspaper The Press and Journal (P&J) displayed street banners which said something like "Aberdeen: The Economic Dynamo That Will Pull UK Out Of Recession". (To be as fair as possible, the actual headline was marginally less hubristic "Aberdeen a key city to power UK recovery". Yet the following day we saw: City council confirms 900 jobs to go. And the day after: Double-dip fears grow as recovery nosedives. So, what's really going on? This needs a closer look...
The articles on the Monday spoke to and of a certain hubristic character in Aberdeen, one which we've mentioned before, and one which novelist Christopher Brookmyre fingered in his novel A Big Boy Did it and Ran Away.
Europe's Oil Capital. Honestly. The first time he heard the expression, he'd assumed it was a bit of self deprecatory humour. That was before he learned that there was no such thing as self-deprecatory humour in Aberdeen, particularly when it came to the town's utterly unfounded conceit of itself. It was a provincial fishing port that had struck it astronomically lucky with the discovery of North Sea oil, and the result was comparable to a country bumkin who had won the lottery, minus the dopey grin and colossal sense of incredulous gratitude. The prevalent local delusion wasn't that the town had merely been in the right place at the right time, but that it had somehow done something to deserve this massive good fortune, and not before time either.We remember similar reportage in May last year when Aberdeen was given a "Top Rating" in an international survey for quality of life. What the local press failed to report then was the context of the survey. While rightly saying that "London is the only British city placed higher than Aberdeen", what the report did not say was that only 2 towns in Scotland were included in the survey; Glasgow and Aberdeen. In the the rest of the UK, the report only included the four towns Belfast, Birmingham, London and Oxford. We all know that the results would have been very different if had included the likes of Manchester, Edinburgh, Cambridge, Bath, Bristol, Cardiff, Leeds, York, Norwich, Brighton, Portsmouth, Southampton, Leicester, Swansea, etc. all of which were excluded from the survey.
Moreover, a little look at what exactly the purposes of the survey were proved enlightening. The survey was undertaken by global
Human Resource experts recommend hardship payments for international workers coming to Aberdeen.But that wouldn't play well to our civic hubris reality distortion field, would it?
Returning to this week's overblown press reports of Aberdeen's economic dynamism, we note that the stories were prompted by this press release from the Centre for Cities "think tank". We can see that both the STV and P&J reports have simply cut-and-pasted text from the press release into their reports. This process is known as "churnalism", a practice exposed in depth in Nick Davies book Flat Earth News. The book was reviewed at the time in The Independent Newspaper as painting "a damning picture of a dysfunctional national press which is spoon fed by government and PR agencies and incorporates wire copy into stories without the most cursory fact checking." Clearly this practice is as widespread, if not more so, in the regional press as in the national.
The Centre for Cities think tank (or "policy institute") declares itself as independent and non-partisan. Fair enough. In the same declaration they say that they are committed to improving the economic performance of UK cities - but there is no immediate mention of the social, environmental or communitarian aspects of the urban sphere. Cities are, of course, more than just the sum of the businesses which operate in them. The Centre for Cities does recognise this, and in their report "Grand Designs" heralds and recommends a wholistic approach to urban liveability, which they recognise as a prerequisite of improved economic performance. They say:
- Local and national politicians should accept that using regeneration plans to ‘go for growth’ hasn’t worked in every urban neighbourhood and can have negative as well as positive consequences on a city’s economy and residents.
- A new way forward might mean building a park rather than a science park, or turning tiny terraces into larger homes, rather than knocking them down and building one bed flats. Communities should be given the power to decide on plans, testing out the neighbourhood planning approach expected in the Localism Bill.
For instance, the report is completely correct to point out that unemployment is low in Aberdeen when compared to the national average. But this is also true of other areas which are either rural or have a large agricultural hinterland and, therefore, primary-sector economies. Orkney, for instance, has lower unemployment than Aberdeen. It doesn't make Aberdeen a place with an especially dynamic or diverse and nimble economy. Check out our earlier post about Dutch Disease. Primary sector economies (agriculture, fisheries and resource extraction) have a lower equilibrium (or 'natural') rate of unemployment than economies based upon manufacturing, retail and services. In this second category a higher equilibrium rate of unemployment is required to maintain the profit rate. As the economy approaches full employment, wages are bid up and a crisis of profitability ensues (UK 1960 - 1973). In primary sector economies, no such 'reserve army of labour' is required, as wages are determined by yields and commodity prices, while the profit rate remains constant.
The Cities Outlook 2011 report compares Aberdeen with Milton Keynes, Reading, Leeds and Bristol. We feel that this is not comparing like with like. These other cities have diverse economies based on businesses which operate in secondary sector (value-added manufacturing) and tertiary sector (services). These four other cities create their prosperity and wealth via the judicious operation of capital combined with innovation which creates value. In Aberdeen, our primary sector economy dictates that we primarily sook what wealth we have from beneath the seabed, the value of that wealth being determined on international markets which no amount of local innovation or judicious operation of local capital will influence.
The Centre for Cities made a category error when they linked Aberdeen with these other four cities. Our local press has compounded and exaggerated this error, and indeed today continues to do so, calling for next generation broadband connectivity to "let Aberdeen lead [the economic] recovery". We are exasperated that this boosterism based upon fallacy continues to characterise our town, both in the local press and amongst credulous bloggers who's cupidity is such that they allow it to amplify their gullibility.
Now, let us not be misunderstood, there's much to be proud of in the business sphere in Aberdeen. But there's no need to try to enhance these good things with slavish cant which actually misrepresents reality. To do so devalues that which is genuinely good and praiseworthy. To do so undermines our standing amongst our competitor regions. And to do so undermines calls for the greater support from central government which will be necessary if we are to progress successfully through the transition to renewable energy. The rebalancing of our economy means changing from reliance on primary sector activity into exploiting secondary and tertiary sectors in the burgeoning renewable energy market. This will not be easy.
Despite all this, the reports are right to an extent. High oil prices do mean that the immediate and medium terms looks like being a profitable time for our local primary sector industry. However, affluence for some is not the same thing as wealth for our town as a whole. Aberdeen is already one of the most socially divided towns in the UK, with the most uneven income distribution in Scotland. The immediate economic prospects for our town suggest that this trend will only continue.
A handful of extremely wealthy tycoons and their executives will give our town a veneer of affluence, while the remains of the city and its society rot away beneath. Outsiders like the Centre for Cities might continue to see the veneer. Aberdonians will have to live with the rot.