The 2015 Perth Writers’ Festival – and John Lanchester’s ‘How to Speak Money’

The program for the 2015 Perth Writers Festival was released last weekend with star authors including John Lanchester, Hilary Mantel (via satellite), Elizabeth Gilbert, DBC Pierre, Bob Brown and Joan London. I’m going to be in Perth speaking about my new book and I’m extremely excited to be interviewing John Lanchester as well. Lanchester is one of my favourite writers on economics and finance. He’s the author of the best book about the 2008 global financial collapse – IOU: Why Everyone Owes Everyone and No One Can Pay, as it was called in the USA (its UK title was Whoops) – and the novel Capital, among several others.

UnknownI’ve just started his new book How to Speak Money: What the money people say – and what they really mean, which will be the focus of our conversation. Lanchester is a compelling writer with a gift for simplifying economic doublespeak and untangling financial obfuscation – and he’s very funny. He’s also wrestling with one of the most important subjects of our times: money. As his book says, ‘Money is our global language. Yet so few of us speak it.’

One of the book’s two epigraphs is a brilliant quote from one of my favourite economists, John Maynard Keynes (in a classic Lanchester move, the other is from Some Like it Hot). Here’s part of the Keynes quote:

‘The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.’

Indeed. And here’s how Lanchester introduces his subject:

‘When the economic currents running through all our lives were mild and benign, it was easy not to think about them, in the way that it’s easy not to think about a current when it’s drifting you gently down a river – and that, more or less, is what we were all doing, without realising it, until 2008. Then it turned out that these currents were much more powerful than we knew, and that instead of cosseting us and helping us along, they were sweeping us far out to sea, where we’d have no choice but to fight against them, fight hard, and without any certain sense that our best efforts would be enough to get us back to shore and safety.

‘That, in essence, is why I’ve written this book. There’s a huge gap between the people who understand money and economics and the rest of us. Some of the gap was created deliberately, with the use of secrecy and obfuscation; but more of it, I think, is to do with the fact that it was just easier this way, easier for both sides. The money people didn’t have to explain what they were up to, and got to write their own rules, and did very well out of the arrangement; and as for the rest of us, the brilliant thing was we never had to think about economics.’

As well as my interview with John Lanchester (Money Money Money, 4-5pm on Sunday 22 February), I’m talking about my new book Six Capitals in two sessions at the Perth Writers Festival: The New Super Heroes (2.30-3.30pm on Saturday 21 February) and Gripping Truths (10-11am on Sunday 22 February). I hope to see you there.

And in other news, apart from this Perth festival and other talk fests, I’m back in serious writing mode until the spring, so I’ll be blogging here somewhat sporadically.

Posted in Can accountants save the planet?, Six Capitals | Leave a comment

Women in Love – a work of very great genius OR insufferable, tedious, impenetrable, so bloody difficult?

WomenInLoveHaving blogged about Women in Love yesterday I later found myself listening to its great champion – novelist and literary scholar Howard Jacobson – discuss it on the First Tuesday Book Club in 2011, along with philosopher AC Grayling and the regular crew of Jennifer Byrne, Marieke Hardy and Jason Steger.

I was mesmerised by Jacobson expounding on Lawrence and his novel’s genius. He called Lawrence ‘the most extraordinary genius of the English novel’ and called Women in Love ‘a novel of excruciated beings’. He said:

‘It’s about people at the very end of their tethers. One of the reasons that it drives some people mad … is because the language is so extreme and wild and at times chaotic. None of that bothers me because … it’s trying to render people in a way that the novel has not rendered them before … Character, I’m not sure he even believes in character. It’s a novel that’s trying to find where we are as human beings, what we are as human beings, at a particular time in history, too. We are at the end of our tethers because the First World War has happened. The world has collapsed and Lawrence is thinking about how we rebuild this world, not politically and economically, but emotionally and spiritually. How do we rebuild ourselves?

‘But for me it goes on living, not as a historical document, because I happen to believe that we actually are continuing, we are still at the end of our tethers and don’t know who we are or how to find ourselves, we don’t know what language there is to describe who we are – and this is a novel that attempts to find it.’

I was completely absorbed by this, by Jacobson’s sense that Lawrence was thinking about how to rebuild this world destroyed by the First World War. Lawrence like most people thought this war would be over by the end of 1915, which is why he called his earlier novel finished in March 1915 The Rainbow, to herald the forthcoming peace and the promise of a new beginning for England and for the modern world. When peace did not come, Lawrence wrote: ‘I’m afraid I set my rainbow in the sky too soon, before, instead of after, the deluge.’ And so he wrote a sequel – Women in Love – about the deluge. I was particularly struck by the way Jacobson distinguished the fact that it was emotional and spiritual rebuilding that Lawrence was thinking about, not political and economic. This seems to me to get to the crux of this novel and of Lawrence’s work in general. And it is profound work indeed. I think Jacobson is right to say that we, (western) women and men, are still doing this work – or, that we are still at the end of our tethers and that this is work that still needs to be done, emotional and spiritual rebuilding.

So I was utterly dismayed to find that not one of the three regular readers on Australia’s only television show devoted to books and reading could stomach Women in Love. Jason Steger was ‘ambivalent’, Marieke Hardy called it ‘insufferable’ and Jennifer Byrne said ‘I struggled like crazy’.

AC Grayling called it ‘a work of very great genius’.

Byrne said ‘It’s so bloody difficult, Howard.’

Jacobson said ‘So what if it’s difficult. It’s a book. Do you want it to be readable? You want it to be unputdownable? You want to be able to read it in 5 minutes? It can be hard work because it’s asking you to think.’

Byrne halted the conversation mid flight (time ran out), concluding that Jacobson and Grayling see Women in Love as a ‘novel of ideas’. She then asked: ‘But is that enough? These days, do you actually need to make it a good novel, a good novel that you can understand, that makes sense to you …?’

Jacobson said he caught Byrne on the verge of saying ‘Shouldn’t it be a good read?’ – ‘And,’ he continued, ‘you know what we would all think about talking about wanting a novel to be a good read, when a novel can be so much grander than that.’

Hear hear Howard Jacobson. A novel can be so much grander than that. It can be Women in Love – or War and Peace.

My dismay over the fact that not one of the regular readers on this book show could enter into Women in Love in any fruitful way has only compounded my heartbreak over this show’s treatment of four great novels in November 2013. It so happens that Howard Jacobson made the documentary Brilliant Creatures shown on the ABC last year. It was about four supreme Australian thinkers, the great Germaine Greer, Clive James, Robert Hughes and Barry Humphries. I’ve not yet seen Brilliant Creatures, but I was intrigued to read Myf Warhurst’s review of it in the Guardian. She says it all, really, about these thrilling, scintillating Australian minds – and about the dullness of today’s media landscape in comparison. She wrote:

‘The show also reminded me that those with rugged, robust and inquiring minds like the aforementioned foursome are rapidly disappearing from our media landscape. And they probably won’t be replaced. … This vigorous lot challenged the status quo at the time. Of course, this meant they weren’t always loved. But they didn’t seem to care much that many Australians thought they were “up themselves”.

‘Compared to those heady days, the current lay of the land looks pretty dire. Public figures are more likely to be applauded if they appear to be just like us. In this new age of TV, likeability is the king, never mind that it’s dull.’ She’s talking about the plague of cooking and renovation shows, but without the visiting brilliance of Jacobson and Grayling, I’d be adding this book show to the list.

Howard Jacobson and Germaine Greer

Howard Jacobson and Germaine Greer

Posted in Classics, Novels, poetry, book news | 7 Comments

‘don’t you really want to get married?': DH Lawrence’s Women in Love

imagesIn 1913, having recently eloped to Europe with a married woman, DH Lawrence began work on a novel which would encompass his vision of 19th-century English provincial life. Set in the Midlands, it focused on the changing fortunes of the Brangwen family, farmers in a region being slowly overrun by coal mining, and on the associated problems faced by modern men and women as their traditional ties to the land were increasingly severed. As Lawrence wrote at the time: ‘I am so sure that only through a readjustment between men and women, and a making free and healthy of this sex, will she [England] get out of her present atrophy.’

Originally called The Sisters, the manuscript became too big for a single work, and Lawrence turned it into two novels. The first, the story of three generations of the Brangwen family, was published as The Rainbow in September 1915. Two months later in a notorious trial, it was prosecuted for obscenity for its immoral portrayal of sex, and the publisher was forced to withdraw it from sale. Crushed by the trial and filled with despair by the continuing world war he had expected would end in 1915, Lawrence returned to his Brangwen saga in 1916 and reworked the remaining material into a fierce and powerful sequel he eventually called Women in Love.

Determined to make sense of the destruction of the war years, Lawrence struggled through his novel to articulate his vision of marriage and sexual love for the 20th century. Women in Love takes up the story of the two Brangwen sisters, Ursula and Gudrun, now sophisticated, worldly women. It opens with Ursula embroidering and Gudrun drawing as they sit together in the window-bay of their father’s house.

Ursula and Gudrun in Ken Russell's film of Women in Love

Ursula and Gudrun in Ken Russell’s film of Women in Love

The first words come from Gudrun, who asks her sister, ‘Ursula, don’t you really want to get married?’ Ursula replies that she doesn’t know, ‘It depends how you mean.’ Like most things in Lawrence’s world, marriage no longer has a fixed meaning, and Ursula’s ambivalence to marriage is one of the driving forces of the novel: ‘When it comes to the point, one isn’t even tempted – oh, if I were tempted, I’d marry like a shot. I’m only tempted not to.’

Ursula’s contrariness compels and frustrates her lover, the school inspector Rupert Birkin (based on Lawrence himself). She resists Birkin’s urge to dominate her and there is a chance these two might find the quivering, delicately balance union of independent beings – ‘two single beings constellated together like two stars’ – that Lawrence believed was possible between men and women. But Gudrun’s passionate affair with the mining magnate Gerald Crich is an expression of something much darker in the human psyche and of the broader dissolution of the war years. Their relationship is founded on a shared, magnetic coldness – as a pet rabbit struggles in Gudrun’s hands, Gerald sees, ‘with subtle recognition, her sullen passion of cruelty’.

Gudrun and Gerald

Gudrun and Gerald

On finishing Women in Love in November 1916, Lawrence said the novel frightened him because ‘it’s so end of the world …’ As Lawrence’s friend John Middleton Murry acknowledged (despite not liking Women in Love), Lawrence was one of the few writers who ‘struggled with the spiritual catastrophe of the war in the depths of their souls’. Lawrence did not find a publisher for Women in Love until 1920. When it finally appeared in London in May 1921 it was attacked by the conservative, jingoistic newspaper John Bull as ‘a loathsome study of sex depravity leading  youth to unspeakable disaster’.

DH Lawrence

DH Lawrence

David Herbert Richards Lawrence was born in Nottinghamshire in 1885, the fourth child of a barely literate coal miner and his educated, religious wife. Aged 12 he won a scholarship to Nottingham High School in 1898, but left school at 16 to work as a clerk in a factory. Forced by pneumonia to give up his job, Lawrence found work as a teacher in 1902 and began writing poetry in 1905. Writer Ford Madox Ford published Lawrence’s poetry in English Review and recommended Lawrence’s first novel, The White Peacock, to publisher William Heinemann who published it in 1911.

Soon after, Lawrence fell passionately in love with the German aristocrat Frieda Weekley, who was married to a professor at Nottingham University College. The lovers eloped to Germany before moving to Italy where Lawrence began The Sisters. Following Frieda’s divorce, they were married in London in 1914 in the Kensington Registry Office. Their witnesses were writers Katherine Mansfield and her lover, John Middleton Murry, who moved with the Lawrences to Cornwall. Here Lawrence worked on Women in Love, drawing the charged relationship between Birkin and Gerald Crich from his intense love for Murry. So potent is the homoerotic undercurrent between the two men that in Ken Russell’s 1969 film of Women in Love, the wrestling scene between a naked Alan Bates as Birkin and a naked Oliver Reed as Gerald caused a sensation on its release. (The film also starred Glenda Jackson as Gudrun, for which she received the Academy Award for Best Actress in 1970).

Lawrence and Frieda

Lawrence and Frieda

Lawrence and Frieda were expelled from Cornwall in 1917, accused of spying for Germany on the suspicion they were supplying provisions to the German submarines along the Cornish coast, and forbidden to leave England. Disillusioned with England and believing life to be elsewhere, after the war they moved to Italy and never lived in Lawrence’s homeland again. They spent the years until Lawrence’s death in 1930 travelling the world in search of a better life, visiting the United States via Sri Lanka and Australia (where in six weeks Lawrence wrote Kangaroo, published in 1923). In 1925 they returned to Italy, where Lawrence began Lady Chatterley’s Lover, which was published privately in 1928 and banned the same year. He died five years later in Vence, France, aged 44. Lady Chatterley’s Lover only became freely available after 1959 (in New York) and 1960 (London).

Women in Love is an extraordinary novel, for many reasons. Particularly striking are Lawrence’s intense, nuanced probing of human relationships and the dazzling precision with which he observes the natural world and transforms it into a language to evoke the almost inexpressible knowledge of his blood. Here he describes Ursula watching Birkin throw stones into a moonlit pond:

‘Ursula was aware of the bright moon leaping and swaying, all distorted, in her eyes. It seemed to shoot out arms of fire like a cuttlefish, like a luminous polyp, palpitating strongly before her … Then again there was a burst of sound, and a burst of brilliant light, the moon had exploded on the water, and was flying asunder in flakes of white and dangerous fire.’

‘Oh, there is something so loveable about him and his eagerness, his passionate eagerness for life – that is what one loves so,’ said Mansfield of Lawrence. The passionate eagerness of Lawrence the man is everywhere apparent in Women in Love – both in his character Birkin, as well as in the vitality of his writing and the urgency with which he insists on his vision, rhythmically pounding it out like a preacher:

‘And why? Why should we consider ourselves, men and women, as broken fragments of one whole? It is not true. We are not broken fragments of one whole. Rather we are the singling away into purity and clear being, of things that were mixed.’

In 1913 DH Lawrence wrote to a friend: ‘My great religion is a belief in the blood, the flesh, as being wiser than the intellect … All I want is to answer my blood, direct, without fribbling intervention of my mind, or moral, or what-not.’ For Lawrence, sex was the key to understanding life and the universe: ‘I shall always be a Priest of Love and a glad one.’

Birkin (Alan Bates) and Gerald (Oliver Reed)

Birkin (Alan Bates) and Gerald (Oliver Reed)

Posted in Classics | 1 Comment

Happy New Year! Books that change your life – and novels you live

Last year I was asked to write about four books that had changed my life. Despite the hundreds of books I have read and loved, it was a strangely uncomplicated task. I scribbled down four immediately – and revised only one a few days later. The list was published in the Sydney Morning Herald‘s regular column on the subject last November. All the books that – seriously – changed my life, that made me different from what I might have been given the world in which I grew up, caused me existential angst, soul wracking, the books that THREW ME, I read before I was 20. The four books were, are:

9780141025117But I realised last week – when a friend told me she’d started reading War and Peace and had fallen into it so utterly that she could function in no other part of her life, and I told her it was my all time favourite novel – that the books that most change your life are not necessarily the books you most live in, or even the books you most love. Well, certainly in my case they’re not. Because War and Peace is my favourite novel, perhaps my favourite book of all time (along with the Iliad and the Odyssey and probably King Lear). But it didn’t even occur to me to include it in the list of books that changed my life. As if that category is almost too functional, too utilitarian, for a book such as War and Peace. Perhaps such books don’t so much change your life, as ARE your life. I think George Orwell says something similar when he writes so astutely and plainly (and yet so profoundly) about the joy of Henry Miller in his essay ‘Inside the Whale':

‘But read him for five pages, ten pages, and you feel the peculiar relief that comes not so much from understanding as from being understood. “He knows all about me,” you feel; “he wrote this specially for me.” It is as though you could hear a voice speaking, a friendly American voice, with no humbug in it, no moral purpose, merely an implicit assumption that we are all alike. For the moment you have got away from the lies and simplifications, the stylised, marionette-like quality of ordinary fiction, even quite good fiction, and are dealing with recognisable experiences of human beings.’

I’ve read War and Peace so many times – and have already written about it here – but thinking about it last week, returning to its irresistible opening pages, made me immediately buy the new translation by Richard Pevear and Larissa Volokhonsky to read when I am again free to read as I please, round about October 2015. I’ve been meaning to read it ever since it came out, having read their translation of Anna Karenina a few years ago, as mentioned here, which brought the novel to life – especially Anna’s devastating passion for Vronsky and its terrible unravelling, as well as the wonder that is Levin – in whole new ways.

My other all time favourite novel – and there really are so many, including Don QuixoteMoby-Dick and Wuthering Heights, all of which just sprang to mind – but my other ALL TIME favourite novel is DH Lawrence’s Women in Love. At the same time as I was reading Anouilh and Marx, I was devouring every single thing that DH Lawrence ever wrote, and Women in Love is my favourite of them all. And as with War and Peace, it was a book I lived, and lived in.

Women in Love

Women in Love

DH Lawrence has few fans these days. In 2013 The Guardian‘s Sam Jordison called Lawrence’s Sons and Lovers ‘sloppy, repetitive and even silly’. Although he did also concede that ‘Lawrence does have something special’. I’m not sure I personally know a single person who professes to love Lawrence. But writers Howard Jacobson and Geoff Dyer both love and have written about him. And I was very pleased to read two weeks ago that Rachel Cusk (who’s new in my reading sights and whose book Aftermath will join War and Peace in my reading for next October) said of Lawrence, ‘I would so love to have had him as my friend.’

So, Happy New Year! To ring in the new year DH Lawrence’s Women in Love is up next.

DH Lawrence

DH Lawrence

Posted in Classics, Novels, poetry, book news | Leave a comment

Two big books for 2014: Capital in the Twenty-First Century by Thomas Piketty and This Changes Everything by Naomi Klein … and a poem and a memoir

The two biggest books I’ve read this year, in a year of reading dictated mostly by my work, are Thomas Piketty’s Capital in the Twenty-First Century and Naomi Klein’s This Changes Everything. They are big in every way, in their thinking, their innovative synthesis of vast amounts of disparate material, their size. Both tap the zeitgeist, both became bestsellers, both say things well that need to be said: Piketty that the returns on capital tend to exceed the rate of economic growth (or income, in his model) and that this is responsible for the rising inequality we all so palpably feel, and that since the 1980s we have increasingly privileged the owners of capital over wage and salary earners in our tax structures; Klein that our present economic practices driven by the pursuit of profits and GDP growth, and powered by carbon-based fuels, are destroying the planet and must be changed.

This Changes EverythingI like Robert Manne’s review of This Changes Everything in the latest issue of The Monthly. Manne thoroughly summarises Klein’s enormous and often expansive arguments and tales from the cutting edge of climate change, and gives an excellent appraisal of her book’s achievement. I particularly like his opening observation:

‘Unless it turns out, through a miracle, that virtually the entire cadre of the world’s scientists who work in the area of climate are fundamentally wrong, the only people these future generations will be able to look upon with respect are those who saw the monstrousness of what we were doing and who gave their lives to the climate cause. One such is the Canadian leftist, Naomi Klein …’

And his conclusion – regarding the enormous changes that are required in the face of climate change – where he writes:

‘None of this will happen without a revolution in the way we think about our relations with the Earth and with our fellow human beings. Naomi Klein understands all this as clearly as any contemporary thinker, which is why I regard This Changes Everything as among the most brilliant and important books of recent times.’

I agree. (And say something similar in my review of Klein’s book for The Australian.)

9780674430006Piketty is that most rare of contemporary economists: one concerned with and well versed in history, the long term, and one who writes with verve and clarity (which is no mean feat over almost 577 pages). He also has a disarming frankness which is endearing, such as when he confesses the idealism of his proposed solution to the inequality of returns on capital versus income:

‘the ideal policy for avoiding an endless inegalitarian spiral and regaining control over the dynamics of accumulation would be a progressive global tax on capital. Such a tax would also have another virtue: it would expose wealth to democratic scrutiny, which is a necessary condition for effective regulation of the banking system and international capital flows. A tax on capital would promote the general interest over private interests while preserving economic openness and the forces of competition. The same cannot be said of various forms of retreat into national or other identities, which may well be the alternative to this ideal policy. But a truly global tax on capital is no doubt a utopian ideal.’

Piketty is also – hooray! – scathing of his discipline’s over-dependence on mathematics:

‘To put it bluntly, the discipline of economics has yet to get over its childish passion for mathematics and for purely theoretical and often highly ideological speculation, at the expense of historical research and collaboration with the other social sciences. Economists are all too often preoccupied with petty mathematical problems of interest only to themselves. This obsession with mathematics is an easy way of acquiring the appearance of scientificity without having to answer the far more complex questions posed by the world we live in.’

Despite his aversion to the abstractions of mathematical economics, Piketty’s historical insights and revelations come from number crunching. (And he acknowledges the importance of numbers: ‘Refusing to deal with numbers rarely serves the interests of the least well-off.’)

Among the highlights for me – beyond his general theory about capital versus income – is Piketty’s analysis of our changing attitudes to taxing capital income versus labour income, especially in Britain and the US concerning progressive estate tax. He says ‘both countries distinguished between “earned income”, that is, income from labor (including both wages and nonwage compensation) and “unearned income”, meaning capital income (rent, interests, dividends, etc) … This distinction is interesting, because it is a translation into fiscal terms of the suspicion that surrounded very high incomes: all excessively high incomes were suspect, but unearned incomes were more suspect than earned incomes. The contrast between attitudes then and now, with capital income treated more favourably today than labor income in many countries, especially in Europe, is striking.‘ In other words, today as many so palpably feel, the tax burden on labour in some countries is greater than on those whose incomes derive from their wealth. How did it happen that this former (more egalitarian) suspicion of unearned incomes has gone the way of the welfare state?

For me Piketty’s historical analysis is more powerful than his proposed solutions to the problems he unearths, which mostly require unimaginable (to me) levels of political resolve, financial transparency and global cooperation. And given the urgency of climate change and its inextricable link to the imperatives of capital, I was dismayed to find Piketty dealt with this subject only as an aside, in a two-page section called ‘Climate Change and Public Capital’. This despite his acknowledging that:

‘The public debt … is not our major worry. The more urgent need is to increase our educational capital and prevent the degradation of our natural capital. This is a far more serious and difficult challenge, because climate change cannot be eliminated at the stroke of a pen (or with a tax on capital, which comes to the same thing).’

In other bookish news, I’ve been floored by a poem and am now engrossed in a memoir. I’ve been longing for poetry all year – the need became especially acute because I’ve been so immersed in accounting and economics – but nothing could penetrate my accounting brain, not even TS Eliot’s Four Quartets, the poems I always return to. Until on 17 November Mireille Juchau tweeted these lines:

Whenever I visit my mother
I feel I am turning into Emily Bronte

my lonely life around me like a moor …

Anne Carson

And I was gone. I found the poem – ‘The Glass Essay‘ – and devoured it. And have been returning to it and digesting it ever since.

And thanks to an irresistible (because it features a bookish girl) trailer for the film Testament of Youth, I’m now reading Vera Brittain‘s riveting memoir, which is also a big book – and which The Times called ‘A haunting memoir for a lost generation.’ Among its many pleasures are its complex 1930s syntax, its often labyrinthine and many-claused sentences, rarely seen in today’s prose. Here’s how it opens:

‘When the Great War broke out, it came to me not as a superlative tragedy, but as an interruption of the most exasperating kind to my personal plans.

‘To explain the reason for this egotistical view of history’s greatest disaster, it is necessary to go back a little – to go back, though only for a moment, as far as the decadent ‘nineties, in which I opened my eyes upon the none-too-promising day. I have, indeed, the honour of sharing with Robert Graves the subject of my earliest recollection, which is that of watching, as a tiny child, the flags flying in the streets of Macclesfield for Queen Victoria’s Diamond Jubilee.’

Testament of Youth, still from the 2014 film

Testament of Youth, still from the 2014 film

Posted in Economics, Environment and the planet, Novels, poetry, book news | Leave a comment

Natural capital: is translating nature into the language of economics the only way to make it count?

photoAlong with questions about the nature of the corporation – monster and psychopath or historically-contingent legal person capable of evolving? – Six Capitals was driven by the question of how to make nature count, so we don’t continue to destroy it in our endless pursuit of more GDP and profits. The accountants’ solution to this question of nature is to redefine it as natural capital.

I’ve been planning to write about natural capital here for some time, initially prompted by Tony Abbott and Joe Hockey’s refusal to countenance the discussion of climate change at the G20 conference in Brisbane, a forum they wanted focused squarely on economic growth, as if the two were separate issues. But Barack Obama, Angela Merkel, Xi Jinping, Francois Hollande and other leaders scuppered that plan. Climate change became one of the G20’s talking points and was included in the G20 communique.

What I’m really interested in is the debate that continues to erupt around natural capital accounting in the UK. The concept of natural capital has been around at least since 1973 – when the term was first explicitly used by British economist EF Schumacher in his book Small is Beautiful – but it only made its first formal appearance on the world stage in 2012. Here are some highlights in the recent history of natural capital:

- in 2012 the United Nations gave natural capital equal status to the GDP, officially adopting a new statistical standard to account for natural capital. This was the first new UN standard since the advent of its GDP accounting standards in 1952.
- the same year 40 financial institutions, including the National Australia Bank, signed the Natural Capital Declaration to promote the private sector’s use of natural capital accounting by 2020. At the launch the World Bank’s Rachel Kyte said: ‘Let’s look back in twenty years from now and remember that this was the time when we changed the way we accounted for nature.’
- in 2012 at the Rio+20 conference on sustainable development over 50 countries and 86 companies committed to valuing natural assets, including Walmart, Woolworths and Unilever.
- in 2013 the inaugural World Forum on Natural Capital was held. The second World Forum on Natural Capital is being held in Edinburgh in November 2015.

So, things are proceeding apace for natural capital.

What is natural capital? The World Forum on Natural Capital defines it as ‘the world’s stocks of natural assets which include geology, soil, air, water and all living things’. It continues:

‘It is from this Natural Capital that humans derive a wide range of services, often called ecosystem services, which make human life possible. The most obvious ecosystem services include the food we eat, the water we drink and the plant materials we use for fuel, building materials and medicines. There are also many less visible ecosystem services such as the climate regulation and natural flood defences provided by forests, the billions of tonnes of carbon stored by peatlands, or the pollination of crops by insects. Even less visible are cultural ecosystem services such as the inspiration we take from wildlife and the natural environment.’

The problem with our current accounting systems – both national and corporate – is that they don’t account for natural capital, they don’t value living nature, and so it is invisible.

For many accountants (like Michael Peat), ecological economists (like Robert Costanza), bankers (like Pavan Sukhdev), ecologists (like Mark Everard) and environmentalists (like Tony Juniper), the best way to make nature visible is to translate it into the dominant global language: economics. In this language nature becomes ‘natural capital’.

It is exactly at this moment – the very conception of nature as capital – that journalist and environmental activist George Monbiot recoils from the new accounting paradigm. And it is also at this moment that I find myself torn between the two sides of the debate, which first erupted in 2012 with Monbiot’s article on biodiversity offsetting (an offshoot of natural capital accounting) and continues to blaze.

In April Lynn Crowe, Professor of Environmental Management at Sheffield Hallam University, responded to Monbiot’s article damning natural capital accounting ‘Can you put a price on the beauty of the natural world?‘ (published on 22 April 2014, Earth Day) and Tony Juniper’s reply ‘Framing natural capital: economy and ecology are not in competition‘.

She said: ‘As ever, I find my heart in complete agreement with George, but my head is wavering towards the Tony Juniper position.’

Although I wouldn’t express it in quite the same way (head versus heart as if they were so easily separable), I find myself similarly torn between the logic of these divergent views. Their range was well expressed by Lynn Crowe herself, Robert Costanza, Joss Tantram and Tony Juniper in ‘Is natural capital a neoliberal road to ruin?’, published by the Guardian on 1 August 2014 in response to Monbiot’s speech ‘Put a price on nature? We must stop this neoliberal road to ruin‘.

On her blog Crowe said of Monbiot’s ‘perceptive comments': ‘I agree with many of his concerns about policies such as biodiversity off-setting and similar approaches which appear to ignore the intrinsic value of nature. But I don’t believe we can blame the tool for the way it is used by others. The powerful have always abused their position, and no doubt will sadly continue to do so. We can only continue to lobby and campaign to try to bring about change where necessary.

‘I believe an ecosystem approach is still a powerful technique for framing our decisions about the use of natural resources which reflects the integrated nature of our environment and society generally.’

The rapid rise of natural capital accounting is helped by the fact that it’s easier to gauge than the other new capitals (intellectual, human, and social and relationship capital). There are now rigorous metrics for carbon and measures for water usage are being developed. Its language is now spreading into the broader environmental conversation. For example, it makes possible the spectre of ‘stranded assets’ in relation to the stocks of carbon held by fossil fuel companies, an idea being used by financial analysts as well as by Bill McKibben’s 350.0rg to call for investors to pull out of fossil fuel companies.

Natural capital is on the agenda at the Accounting Frontiers Forum – ‘Beyond the financial: Re-thinking the capitals in practice and assurance’ – being held next Thursday 11 December 2014. Professor Roger Burritt and Michael Spencer will be speaking about natural capital accounting.

I also learnt (from Sally Hill of Wildwon, which hosted the B Lab meeting last week) about a conference being held by the Australian Institute of Environmental Accounting in Sydney’s Customs House next May. I’ll be writing about it when more information is available.

I think the question of how we value and account for nature – or, how we make nature count – will be the most important question of this century. And given the rapid rise of natural capital accounting, I think anyone who cares about the future of the planet should pay attention to it right now.

Litchfield National Park, west of Darwin

Litchfield National Park, west of Darwin



Posted in Can accountants save the planet?, Six Capitals | 15 Comments

How Brisbane’s worst storm in decades turned my Avid Reader event into a street party

Last Thursday at 5.45pm I set out to Avid Reader bookshop in Brisbane for my conversation with Radio National’s Paul Barclay. My hotel lobby was crowded with people taking refuge from the storm which had just ravaged Grey Street outside. There was no public transport, no taxis, no way of contacting the bookshop. I decided to walk. This is what I found.

Grey Street, Southbank

Grey Street, Southbank

Grey Street, Southbank

Grey Street, Southbank

Russell Street, West End

Russell Street, West End

Avid Reader bookshop

Avid Reader bookshop

Avid Reader is in Boundary Street, West End. At 6.15pm last Thursday night one side of the street was a blaze of lights. The other side was completely blacked out, the power cut. As this picture shows, Avid Reader was on the other side, shrouded in darkness.

But inside were Avid Reader’s fabulous Fiona Stager and Krissy Kneen, wondering if it was still possible to run the conversation as planned, as was the intrepid Paul Barclay, his sound recordist and several people who’d braved the storm for the event. Paul and I ended up recording our conversation in the ABC studios the next day, but on the night of the storm we all stood in the street drinking wine and had a party. It was fantastic, despite the chaos.

And here’s how Avid Reader usually looks.

Avid Reader

Avid Reader

Next up I’ll be writing about natural capital (the new ‘It Capital’) and the Accounting Frontiers Forum being held by the Chartered Accountants of Australia and New Zealand on Thursday 11 December 2014. By happy chance, the conference is called ‘Beyond the Financial: Re-thinking the Capitals in Practice and Assurance‘.

Posted in Six Capitals | 2 Comments