Having done virtually no field work this year I’ve had more time away from the minutiae of individual projects to follow some of the broader themes I find interesting and relevant. As the year draws to a close, I was asked “what have you been thinking about?” and so I found myself pondering what has been — if not to try and figure out what might be, to at least take stock of where we’re at.

I continued to follow Milford Bateman’s critique of microcredit, both of its excessive claims and of its apparent damage. This year he turned his censorious gaze to South Africa, which he describes as “one of the most calamitous financial sector interventions in South Africa’s short post-apartheid history.” He reports that more than 60% of all active credit consumers in the country are defined as being over-indebted, and total household debt equals some 75% of disposable income.

This follows his equalling scathing reviews of the impact of microcredit in Bosnia & Herzegovina (2012) and Latin America (2013). His key point is that microcredit does nothing more than hollow out local economies, as without adequate investment in supporting SME development it can only recirculate existing limited cash flows amongst an unsustainable number of (typically) service-providing, rather than productive, microenterprises. Without an increase in local purchasing power — generally obtained from expanding employment by SMEs — those microenterprises will never have enough customers for long-term business success.

His empirical analysis is quite a contrast to the anecdote-based strategies we’ve had to rely upon to demonstrate the supposed good that microcredit has been delivering. Why does the negative seem so much easier to convincingly demonstrate?

I like Bateman’s advocacy for savings & credit cooperatives (in the form of credit unions), as it mirrors the belief in community-based cooperative structures I developed in my first working years. So it was with pleasure I read the New Economics Foundation’s (NEF) findings on the value of credit unions as an effective tool for achieving increased financial inclusion. The NEF is a UK-based think tank “promoting social, economic and environmental justice to transform the economy so that it works for people and the planet.”

The NEF had undertaken a similar examination of cooperative banks earlier in the year, determining they too provide greater benefits at a community level than mainstream commercial banks. As a natural evolution of credit unions (at least in mature industrialised economies so far), I think cooperative banks should be the long-term solution for vertical financial inclusion.

So it was very disappointing when, shortly after the NEF’s report, the UK Co-op Bank nearly collapsed. If there was one good outcome, it was the unequivocal conclusion that a governance structure that limits the accountability of leadership and management to the cooperative’s members is a recipe for problems.

Tangentially, the NEF provided additional support for the whole idea of community-based activities as a means to build social capital. Whether it be cooperative membership or participation in the varied forms of savings groups we discuss here, it seems the move to direct involvement in the “means to production and distribution” (to quote an old philosopher hero of mine) is generating increased well-being and stronger communities. They might be writing primarily about the sort of society represented by the UK, but I think the benefits of participation arise regardless of the particular activities involved.

The message that it’s back to business as usual for the world’s banks — as if the GFC had never happened — was well established before 2014. However, I enjoyed a couple of commentaries on just how fundamentally weakened the financial system’s regulatory environment has become. This is not so much an issue of the rules themselves, but concerns more the behaviour of the enforcers.

Bill Black, with a long history in the US of spearheading litigation against fraudulent and corrupt financial institutions — especially during the savings & loans crisis of the 1980s — has some interesting observations on the more recent absence of prosecutions against bankers. He was speaking on the sidelines of the annual conference of the US-based Institute for New Economic Thinking (INET).

Another comment on the staggering (to me) sums of penalties levied against banks — $230 billion in the US since 2009; $100 billion in Europe; another $70 billion expected over the next two years — was that these fines are simply making no difference. In the overall scheme of things, the “banksters” and their shareholders react with “little more than a shrug.”

Worse, they remain as powerful as ever in twisting the arms of legislators to dilute existing rules to allow them to return to taking crazy risks. Whilst promoting its credentials as a supporter of the financial inclusion goals of microfinance, Citibank convinced US lawmakers to remove a risk-limiting rule only introduced in 2010. Are they planning to repeat the behaviour preceding the GFC, with all its implications for those now suffering the consequences?

All of this is taking place within the context of the system of market-based capitalism that once was thought to be an essential part of the “end of history”. My interest in the work of NEF and INET arises from they way they question the value of the neoclassical version of economics that has dominated the global agenda for so long. (I like Bill Black’s coining of “theo-classical”!) So I settled in for the long-haul to watch Joseph Stiglitz elaborate his agenda for changing the economic theory underpinning critical policy decisions.

More easily digestible is Jeffrey Sachs’ argument for making economics all about sustainable development. His logic seems like plain common sense to me.

Sachs has gone beyond trying to bridge the gap between theory and practice just within the realms of academic and political discourse. This year he got into a stoush with Bill Gates about his Millennium Villages project. Gates commented on a book exploring the project by suggesting Sachs had overreached himself with the ambitious multi-sectoral focus of the project. Sachs hit back, asserting that Gates had been taken in by an “error-filled and out-of-date book.”

Understanding the nature and causes of poverty has always been a particular challenge. For every explanatory analysis there’s another suggesting more profound, and therefore more difficult to address, socioeconomic factors. So I find it interesting that inequality has become a central topic of the ‘is the system working/broken?’ debate, almost as if it were a new idea. Perhaps it’s the first world’s increase of ‘in your face’ poverty thanks to the GFC and the subsequent austerity policies that has repositioned the agenda?

The NEF, amongst others, has put forward the case for adopting reduced economic inequality as one of the sustainable development goals — due to be finalised by the UN in September 2015.

Finally, as we Eurocentrics continue to be bombarded with WW1 — the ‘Great War’; the ‘war to end all wars’ — memorabilia, I’m bracing myself for New Zealand’s (and Australia) ennoblement of our part in the Gallipoli Campaign. This was a particularly pointless activity that took more than 137,000 lives over eight months and resulted in precisely no change in the course of the war. Characterised by strategic and execution errors — the phrase ‘lions led by donkeys’ was most apt here — Gallipoli has come to represent for Kiwis and Aussies alike a defining moment of our early nationhood.

I was raised in the ANZAC myth; faithfully rising before dark to witness the remembrance commemorations at dawn each 25 April. But I agree with Jeffrey Sachs in his observations on what a waste it always is. Living now less than 300km from the Russian border, I hope 2015 will not see a repeat of any of the foolish imperialist adventures of the last two decades, let alone the last century.

Otherwise, with no more idea of what the next year will bring than any of the other pundits out there, let me wish you all the best in your lives and work in 2015.