The Flywheel Economy

Many discovered gardening during the covid lockdowns. Seed sales soared; demand was sky high. In May 2020, the Managing Director of the UK’s Seed Co-operative, David Price, was quoted by BBC News as saying seed sales had risen six-fold on the previous year. Many seed sellers were worried about inventories and a crisis of supply for future years.

I was one of those new generation of gardeners pushing up demand for seed. The confined situation of lockdowns, an unvaccinated and uncertain world with a contagious virus rampaging, proved enough encouragement for me, and many others, to take-up an outside hobby closer to home. It was soothing. It was meditative. I learnt to stay quietly and observe my plants, and how the ecosystem interacted with them.

One morning, I watched a caterpillar creeping along a leaf of one of my citrus trees, happily munching away and creating a series of holes. Suddenly, a hornet swooped in with SAS-style swiftness and agility and captured the caterpillar. In that moment, for the first time, I saw a hornet as something other than a threat and a pest. Indeed, watching it in operation, I could see it was an important balancing part of the ecosystem, helping my fruit tree to survive and thrive.

I became interested in permaculture. The kids and I watched “The biggest little farm”, a fantastic documentary film telling the story of a couple of city dwellers who escape city life to buy a farm where they attempt to bring in sustainable agricultural practices. I read up on the work of Bill Mollison, permaculture’s founding father and watched greening the desert videos with Geoff Lawton’s great work in Jordan. I started learning about the importance of water resource management and soil health. The more I learnt, the more I started to see similarities and analogies with my work as an economist.

The Correlation

In his fascinating book ‘Messy: How to be Creative and Resilient in a tidy minded world’ Tim Harford cites the great music producer Brian Eno, who says, “I think of myself as a gardener, and I think of culture as a garden – which is to say, I’m not interested in imposing my taste on what should happen. I’m interested in setting up situations where things can grow, and then seeing what happens.”

I believe the same principle applies to good economic policy making. Our approach should be to intervene thoughtfully and like a gardener in our economies, not to suggest we never intervene or should remain in low value sectors. We respect what is organically growing and what is fruitful, and we help to nurture and support it. Occasionally we may have to make a major intervention, but we do so mindfully and with thought to how it fits within the entire economic ecosystem.

As an economist working in Nigeria and Pakistan, I saw some brilliant examples of the power of economic ecosystems. The positive lessons, for example, from Yaba tech cluster in Lagos, where the synergy of young, talented graduates with a social enterprise tech-incubator (the Co-Creation Hub), and a State Government willing to give no-objection to a fiber-optic cable company digging up the road, led to one of the most innovative and energetic tech clusters in Africa. Or in Punjab Province in Pakistan, where Small and Medium Enterprises got together through the Sialkot Chamber of Commerce and Industry. They started with setting-up a dry port, and later went on to build and finance Sialkot International Airport, taking their international trade and commerce to a new level.

These are examples of economic ecosystems that start to develop positive economic flywheels, that reinforce and support growth and prosperity. The role here of the economic policy makers is no more than that of a gardener or a steward. Their role is to actively support the good growth and prevent anything from undermining it.

My conclusion

Yet, I have also experienced examples of where governments have seen their role as being far too prescriptive. Imposing a synthetic vision for an economy that struggles to situate itself within the natural economic ecosystem. Often protectionist industrial policy can fit into this category. We can see examples in the longstanding and distracting rhetoric surrounding toothpick manufacturing in Nigeria, which policymakers used to justify currency controls, and in the protection guarding the automotive industry in Pakistan. Neither country achieved competitiveness or productivity gains through these types of practices.

My assertion is that economic policy makers and economists should view ourselves fundamentally as gardeners. We should look to steward productive and competitive economic ecosystems that harness economic flywheels like the tech sector in Yaba or sports equipment and leather products in Sialkot. In fact, what I term the ‘flywheel economy’ is what policymakers should be striving for. We could benefit with borrowing more from permaculture principles as we search for creating more sustainable economies for the future. The more that economists and politicians can start viewing the economy as an ecosystem, and their role as a gardener, the more likely we are to achieve sustainable and transformational growth and prosperity.