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To beat the far-right we need to boost Wales’ foundational economy

17 Jun 2019 8 minute read
Image by Pexels from Pixabay

Duncan Fisher, Co-editor at

The fact that a majority in Ebbw Vale came out against EU membership despite being awash with European funding has baffled many and been the subject of online humour verging on mockery. How did things go so terribly wrong?

I believe the problem is that people’s everyday lives were not sufficiently touched by investments. The spending did not improve that part of the economy at the centre of everyday life – the local shops, the buses, the takeaways, our five-a-day fruit & veg.

If this part of the economy sinks, we are adrift, and there follows a sense of abandonment, even if glittering investments can be seen all around.

So, I was instantly interested to learn that Wales is leading the way in tackling this core problem and that the Welsh experiment is being talked about way over in London as a potential solution to the existential crisis being faced across UK, Wales included.

The talk is about the “foundational economy”. As the grandson of the economist who invented the term “tertiary economy” about 100 years ago to describe the service sector, I have a rather emotional connection with new economic definitions, particularly ones that make instant sense!

The foundational economy is that bit of the economy sandwiched between the core economy (how we care for each other in our families – the bit that economists ignore and don’t value) and the tradeable economy (industrial investments that seek minimal employment, lowest possible wages and the quickest possible profit – the bit that economists and governments obsess over).

The foundational economy is the bit that keeps us safe, secure, civilised and connected with each other, as we carry on our daily living. It was overlooked in Ebbw Vale and in so many other places in Wales and beyond.

And the foundational economy is huge – 40% of the entire UK economy.

The economists who invented the term warned back in 2013 that ignoring this part of life would lead to the emergence of the far right (see the manifesto). They could never have predicted just how much their prediction would come true.


The Welsh Government is going about this experiment in an innovative way. It wants people really to understand the ideas – it wants discussion in the media and among community organisations. (This is going to require some work: the narratives are not quite ready for mass inspiration!)

It wants local experiments rather than projects with promises of pre-determined outcomes that crush creativity. It wants the experiments to be disruptive and politically mobilising. It wants to engage local radicals and activists who can invent solutions.

Such localisation is a political imperative in the face of the rise of the far right. If the Government can pull this off, then it will indeed be a revolution!

Building the foundational economy requires collective creativity, local partnerships and social innovations. It requires a stronger social contract between “grounded” businesses – embedded in the region by ownership, supply chains and skills – and local communities.

The customers of a locally grounded firm are not just consumers, but active citizens who can negotiate their spending in ways that support the common good and quality of life.

As the Manifesto for the Foundational Economy says:

“In a dismal national context of slow failure and continuing relative decline, the aim is to imagine how we can develop foundational activities to create employment, build stronger supply chains and networks and provide a more local basis for decisions about how products are sourced and distributed, how services are managed and how assets are controlled for social value, which includes taking the future seriously.”

The reference to “taking the future seriously” opens up the whole issue of sustainability. As Greta Thunberg has told the world, it is time to panic. Immediate and radical local action is needed.

The foundational economy, the biggest part of the national economy, needs the most serious attention to sustainability. Radical decarbonisation must be at the heart of every local experiment.


By far the biggest part of the foundational economy is food, overshadowing things like energy, communications and travel.

Food buying accounts for 39% of the foundational economy. It constitutes an average of 16% of spending by the poorest households and 9% of the richest households.

In 2011, the average amount that each person spent on food was £23 per week. So, in a community like my own in Crickhowell, with just 2,000 inhabitants, that’s £2.4million a year, the vast majority of which is spent by driving up and down the A40 to supermarkets that spirit money far away from the local economy and block local producers from accessing household demand.

Much of food production is as industrialised and alien to a local/regional identity as any other industry producing tradeable goods, with minimum wages, minimum employment / maximum mechanisation, short-term priorities and maximum environmental externalities to be endured by local communities.

But there are new models emerging around the world of extremely high output small-scale organic farming – Bec-Hellouin in France, Jardins de la Grelinette in Canada and Ridgedale Farm in Sweden.

These show how we will feed the world in the future, through a massive expansion of local production and consumption in ways that are more profitable than traditional farming (particularly if you include the externalised costs), and much more sustainable, not just sustaining the soil but regenerating it and storing more carbon in it.

Reconfiguring the local food economy, substituting imports with locally produced food, would immediately shift a local/regional trade balance in a positive direction.

“Food supply is central to the quality of life and security of the population” states the 2013 Manifesto for the Foundational Economy.

What is more, food production is the sector of the foundational economy with the biggest carbon footprint. Agriculture contributes 10% of greenhouse gases in the European Union, and that does not include production and transport of food over countless miles.

Decarbonisation in both food production and food distribution (which means fewer food miles) is a radical necessity.

There needs to be a massive push to grow food firms that are grounded in the local economy – creating local supply chains, local employment and local pride through local branding. Local firms have to work together to strengthen their hand, so that they can supply bigger local consumers, such as schools, hospitals and local Government.

There is a great example of this starting to happen in Bristol, Fresh Range, where small food producers are starting to deliver on large local Government food contracts.

A report by Professor Kevin Morgan at Cardiff University back in 2016 recommended changes to Welsh food policy that would support this different approach:

  • He questioned the increasing dependence of local food producers on exporting produce to be processed and retailed elsewhere, despite growing demand at home for locally produced food.
  • He recommended more support for community schemes and more development of local market opportunities, both through retail and public sector procurement.
  • He also called for more attention to the climate change issue – and this was three years before Wales declared a climate change emergency.
  • He recommended more support for small-scale production, including organic and agro-ecological production and more sustainable horticulture.
  • He called for less intensive and higher quality alternatives to red meat, which consumers are increasingly being encouraged to avoid.


I recently was privileged to be a guest of the food project, Bäuerliche Erzeugergemeinschaft Schwäbisch Hall, in Germany. (There is an English language overview on Food and Agriculture Organisation website.)

It is a breathtakingly impressive example of the foundational economy in action. In Germany, unlike UK, there has been a much stronger national focus on supporting local development.

The project, which started with a handful of farmers in 1988, has grown enormously. It now owns and runs a large pork processing factory producing a wide range of processed meats from pork raised by local farmers.

It set up a foundation that bought the region’s castle, now run as a hotel and conference centre, serving food to die for. (So the local farmers now themselves own the property of their former landlords.)

The project has built a chain of local supermarkets and food halls, which were heaving with people every time we visited one. The organisation heavily emphasises organic production, works to get a fair price for all products, builds marketing capacity, works to improve farm incomes and promotes regional development.

Suddenly in Wales, with a new policy of focusing on the foundational economy, there is a prospect of something like this happening here.

It is time to mobilise stakeholders in Wales to try this out. The folks in Schwäbisch Hall will help and inspire as we start the long and ambitious journey towards a transformation of the local food economy Wales.

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