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human activity and the destruction of the planet


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An obsession with GDP and economic growth is acting to worsen climate change

An obsession with GDP and economic growth is acting to worsen climate change.

A number of progressive economists have been pointing out the facts relating to this statement for the last few years.  Yet, political leaders across the world still seem to be deaf to their words and obsessed with a need to find ways to fuel economic growth through a market economy and promoting austerity, and then praise themselves for doing it, even though their austerity measures affect the poorest in society and damage the environment.  It is part of an adherence to a competitive world, in which one’s own country must come out on top.  This blinkered approach encourages the manufacturing industry, much of which uses fossil fuels, and trading across the globe, in order to balance the difference between imports and exports – what is termed ” a balanced economy”.  I deal with the issue in Chapter 7 of my book, which can be found elsewhere on this website.

fioramonti

In the UK, this approach was perhaps pioneered by Margaret Thatcher and her crony in the US, Ronald Reagan.  But it was later picked up with enthusiasm by Tony Blair and developed further, until it became an obsession with economists.  According to George Monbiot, they are using the wrong mathematics and this approach is both outdated and harmful to the environment. See:

George Monbiot (2015) Guardian 24th November 2015.  “Consume more, conserve more: Sorry but we just can’t do both.”

A number of progressive economists have been saying a similar thing for a number of years.  Perhaps the late Richard Douthwaite was the first to say this in his book “The Growth Illusion” (1999) but there have been others too:  Molly Scott Cato MEP (“Green Economics”), Kate Raworth (Doughnut Economics and also “Old economics is based on false ‘laws of physics’ – new economics can save us” Guardian 6th April 2017), Ian Fletcher (“Free Trade Doesn’t Work”), Paul Krugman  (“How did economists get it so wrong?” in the New York Times), Pat Conaty and the New Economics Foundation among others (full details of each in my references section on this website).

The current UK Shadow Chancellor, John McDonnell MP, also wrote a booklet about this in June 2007, whilst a member of Tony Blair’s “market economy party”.  It is entitled “Another World is Possible” and shows amazing foresight about the consequences of market economy politics, which we are living with now. He was courageous to write this, at a time when Blair was pursuing another path.

AWIP

“Another World is Possible”  (2007) is published by the Labour representation Committee, PO Box 2378, London E5 9QU.  ISBN 978-0-9555771-0-9.

This excellent booklet includes a section entitled “A Planet Plundered for Profit” in which McDonnell states that “we cannot tackle climate change unless we address the system which has caused it…….the wasteful consumption of the wealthier nations has brought environmental impacts, which…. disproportionately affect the poorest countries….The UK has a wealth of natural resources that lend themselves to renewable energy production which, once set up, are low cost to run and cause no pollution… a programme of investment in renewable would not only create thousands of jobs in engineering and manufacturing sectors that have declined in recent years….”

According to Kate Raworth in her Guardian article, “Things are not going well in the world’s richest economies. Most OECD countries are facing their highest levels of income inequality in 30 years, while generating ecological footprints of a size that would require four, five or six planet Earths if every country were to follow suit. These economies have, in essence, become divisive and degenerative by default. Mainstream economic theory long promised that the solution starts with growth – but why does that theory seem so ill-equipped to deal with the social and ecological fallout of its own prescriptions?”

In May 2017, Lorenzo Fioramonti*, Professor of Political Economy, University of Pretoria, wrote an article for The Conversation, republished in Quartz. He opens: “GDP as a measure of growth fails to account for damages caused to the environment by industrial activity”. In his new book “Wellbeing Economy: Success in a World Without Growth” he points out that the “growth first” rule has dominated the world since the early 20th century. No other ideology has ever been so powerful: the obsession with growth even cut through both capitalist and socialist societies”.  He asks the question, “What exactly is growth” and further expounds the idea that it is not a silver bullet to success.  Further details of this concept in his book are summarised in:

https://britain2020.wordpress.com/2017/07/04/fioramonti-growth-is-dying-as-the-silver-bullet-for-success-this-may-be-good-thing/

Kate Raworth has also circulated her latest blog, which contains a video, which tries to explain the issue in easily understandable terms, using puppets.  She hopes that this will be used in secondary schools and in teaching economics undergraduates that the GDP/growth model does not work:

Economic Man vs. Humanity: a puppet rap battle

by Kate Raworth

An economist, a songwriter, and a puppet-maker walked into a recording studio. What do you think came out?. . . An economics puppet rap battle, of course.

One of the most dangerous stories at the heart of 20th century economics is the depiction of humanity as rational economic man. In my book Doughnut Economics I decided he needed a portrait so I drew him, standing alone, with money in his hand, ego in his heart, a calculator in his head and nature at his feet. He hates work, he loves luxury and he knows the price of everything.

Now here’s the most fascinating (and unnerving) thing I discovered while researching the history and influence of this character. The more that economics students learn about him – from Year 1 to Year 2 to Year 3 of their studies – the more they say they value traits such as self-interest and competition over traits such as altruism and collaboration.

The implication? Who we tell ourselves we are shapes who we become.

Over the past year I have been contacted by many economics teachers around the world – especially those in secondary schools – who want to encourage their students to critique this text-book model and offer them a far more nuanced understanding of human behaviour.

So that got me thinking…

I teamed up with the brilliant puppet designer Emma Powell and the ingenious musician Simon Panrucker and, with funding from the Network for Social Change (big thanks, folks!), we created this video – Economic Man vs Humanity: a puppet rap battle.

We’d love to see it in use in classrooms, conferences, reading groups, community groups, and shared widely on social media, on web platforms, on teaching resource sites.

If you are a teacher, please do use it to start a debate in your classroom (the video ends with a question for that very reason). Download the complete lyrics of the rap, and if your students want to dive further into the back story and future possibilities of Rational Economic Man, then I recommend Chapter 3 of Doughnut Economics, which was the basis for the whole project.

If you are a student, please do share the video with your fellow future economists, get your teacher involved, and help kick off a much-needed discussion.

And if you host a web discussion, a new economics resource site, a community network, or a teachers’ forum, you are very welcome to feature the film on your site – we’d love to hear what you do with it.

So sit back and enjoy the Puppet Rap Battle – sing along, pass it on, and let’s say farewell to Rational Economic Man. Today’s students know that it’s time to create a better portrait of who we are for 21st century economics.”

Kate Raworth | 5 September 2018 at 10:14 | URL: https://wp.me/p3sUHn-Bb

 

And yet, despite all of these highly knowledgeable progressive economists writing at length about it, the old way of seeking “growth, growth and more growth” still persists. The present conservative government in the UK has used this maxim extensively over the last 10 years, and even used it as a hammer to batter the opposition with – that they are weak on the economy – a deceitful myth that a gullible public unwittingly believed, when voting at the ballot box – until June 2017, that is.  And the present Chancellor constantly brings statistical data to parliament, in an attempt to show that their economic austerity policies are working.  What he does not say is that they are contributing to climate change, as well as making many marginalised people much worse off.  Indeed, they seem to have abandoned any pretence of working towards attaining the targets set by the Paris Agreement in 2015.  George Monbiot has slated their 25-year environment plan, as “A Grand Plan to do Nothing”. See: http://www.monbiot.com

This last year, we have seen some of the extreme consequences of climate change:

  • excessive heatwaves this summer;
  • a prolonged unusual freeze-up last winter;
  • last year having the most violent and numerous hurricanes;
  • island nations losing some of their territory due to sea level rise;
  • the last few years, global temperatures being the hottest ever on record.

Some of these issues have been described in more detail in other recent blogs on this website.

Just recently, I have read an article by Alan Cottey, a member of Scientists for Global Responsibility: “Environment change, economy change and reducing conflict at source”, just published in AI & Society, where he sets out alternatives.  Here is an extract from the Abstract:

At a time when fossil fuel burning, nationalism, ethnic and religious intolerance, and other retrograde steps are being promoted, the prospects for world peace and environmental systems stability may appear dim. Exactly because of this is it the more important to continue to examine the sources of conflict. A major obstacle to general progress is the currently dominant economic practice and theory, which is here called the economy-as-usual, or economics-as-usual, as appropriate. A special obstacle to constructive change is the language in which economic matters are usually discussed. This language is narrow, conservative, technical and often obscure. The rapid changes in the environment (physical and living) are largely kept in a separate compartment. If, however, the partition is removed, economics-as-usual, with its dependence on growth and its widening inequality, is seen to be unsustainable. Radical economic change, for better or worse, is to be expected. Such change is here called economy change. The change could be for the better if it involved an expansion of the concept of economics itself, along the lines of oikonomia, a modern revival of a classical Greek term for management or household. In such an expanded view, not everything of economic value can be measured. It is argued that economics-as-usual is the source of much strife. Some features are indicated of a less conflictual economy—more just, cooperative and peaceful. These features include a dignified life available to all people as of right, the word ‘wealth’ being reconnected with weal, well and well-being, and ‘work’ being understood as including all useful activity.”

The whole article can be found at:

https://link.springer.com/article/10.1007/s00146-018-0816-x


I think that many of us have stood on the sidelines of this issue for long enough now.  It is time for the progressive economists I have named above, and those cited in Cottey’s article, to come together, in formulating together a new economic theory, with a clear structure, that takes care of the environment, does not increase the gap between rich and poor, and which reduces conflict and competition between nations.  They have written separately for too long.  Now, we are looking for a new partnership, a new structure – a really new economics, based on compassion and equality, not austerity, which will also work towards reducing the damaging effects of climate change.


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Developing a new, participatory economy by George Monbiot

This article first appeared in The Guardian on 11th October 2017.  It was entitled “Labouratory” and also appears on George Monbiot’s website http://www.monbiot.com.

We are still living in the long 20th Century. We are stuck with its redundant technologies: the internal combustion engine; thermal power plants; factory farms. We are stuck with its redundant politics: unfair electoral systems; their capture by funders and lobbyists; the failure to temper representation with real participation.

And we are stuck with its redundant economics: neoliberalism, and the Keynesianism still proposed by its opponents. While the latter system worked very well for 30 years or more, it is hard to see how it can take us through this century, not least because the growth it seeks to sustain smacks headlong into the environmental crisis.

Sustained economic growth on a planet that is not growing means crashing through environmental limits: this is what we are witnessing, worldwide, today. A recent paper in Nature puts our current chances of keeping global heating to less than 1.5°C of at just 1%, and less than 2° at only 5%. Why? Because while the carbon intensity of economic activity is expected to decline by 1.9% a year, global per capita GDP is expected to grow by 1.8%. Almost all investment in renewables and efficiency is cancelled out. GDP, the index that was supposed to measure our prosperity, instead measures our progress towards ruin.

But the great rupture that began in 2008 offers a chance to change all this. The challenge now is to ensure that the new political movements threatening established power in Britain and elsewhere create the space not for old ideas (such as 20th Century Keynesianism) but for a new politics, built on new economic and social foundations.

There may be a case for one last hurrah for the old model: a technological shift that resembles the Second World War’s military Keynesianism. In 1941, the US turned the entire civilian economy around on a dime: within months, car manufacturers were producing planes, tanks and ammunition. A determined government could do something similar in response to climate breakdown: a sudden transformation, replacing our fossil economy. But having effected such a conversion, it should, I believe, then begin the switch to a different economic model.

The new approach could start with the idea of private sufficiency and public luxury. There is not enough physical or environmental space for everyone to enjoy private luxury: if everyone in London acquired a tennis court, a swimming pool, a garden and a private art collection, the city would cover England. Private luxury shuts down space, creating deprivation. But magnificent public amenities – wonderful parks and playgrounds, public sports centres and swimming pools, galleries, allotments and public transport networks – create more space for everyone, at a fraction of the cost.

Wherever possible, I believe such assets should be owned and managed by neither state nor market, but by communities, in the form of commons. A commons in its true form is a non-capitalist system, in which a resource is controlled in perpetuity by a community, for the shared and equal benefit of its members. A possible model is the commons transition plan commissioned by the Flemish city of Ghent.

Land value taxation also has transformative potential. It can keep the income currently siphoned out of our pockets in the form of rent – then out of the country and into tax havens – within our hands. It can reduce land values, bringing down house prices. While local and national government should use some of the money to fund public services, the residue can be returned to communities.

Couple this with a community right to buy, enabling communities to use this money to acquire their own land, with local commons trusts that possess powers to assemble building sites, and with a new right for prospective buyers and tenants to plan their own estates, and exciting things begin to happen. This could be a formula for meeting housing need, delivering public luxury and greatly enhancing the sense of community, self-reliance and taking back control. It helps to create what I call the Politics of Belonging.

But it doesn’t stop there. The rents accruing to commons trusts could be used to create a local version of the citizens’ wealth funds (modelled on the sovereign wealth funds in Alaska and Norway) proposed by Angela Cummine and Stewart Lansley. The gain from such funds could be distributed in the form of a local basic income.

And the money the government still invests? To the greatest extent possible, I believe it should be controlled by participatory budgeting. In the Brazilian city of Porto Allegre, the infrastructure budget is allocated by the people: around 50,000 citizens typically participate. The results – better water, sanitation, health, schools and nurseries – have been so spectacular that large numbers of people now lobby the city council to raise their taxes. When you control the budget, you can see the point of public investment.

In countries like the UK, we could not only adopt this model, but extend it beyond the local infrastructure budget to other forms of local and even national spending. The principle of subsidiarity – devolving powers to the smallest political unit that can reasonably discharge them – makes such wider democratic control more feasible.

All this would be framed within a system such as Kate Raworth’s doughnut economics which, instead of seeking to maximise growth, sets a lower bound of wellbeing below which no one should fall, and an upper bound of environmental limits, that economic life should not transgress. A participatory economics could be accompanied by participatory politics, involving radical devolution and a fine-grained democratic control over the decisions affecting our lives – but I will leave that for another column.

Who could lead this global shift? It could be the UK Labour Party. It is actively seeking new ideas. It knows that the bigger the change it offers, the greater the commitment of the volunteers on which its insurgency relies: the Big Organising model that transformed Labour’s fortunes at the last election requires a big political offer. (This is why Ed Miliband’s attempts to create a grassroots uprising failed).

Could Labour be the party that brings the long 20th Century to an end? I believe, despite its Keynesian heritage, it could. Now, more than at any other time in the past few decades, it has a chance to change the world.

www.monbiot.com


November 2019

George Monbiot has been active in supporting the Extinction Rebellion movement, speaking at their various demonstration in London.  This photograph shows him being arrested for his actions in October 2019.

GeorgeMonbiot



 


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Doughnut Economics – a new way of thinking from Kate Raworth

Those of you who have read chapter 7 of my book, or heard my talk at the recent Planet Centred Forum seminar, will know that I believe that a market economy is one of the factors making climate change worse.  I also talk about the obsession with economic growth – growth, growth and more growth – which is being adhered to by politicians in an increasingly panicky way.  It is clear from many experts that the current economic system is based not only on shaky mathematics but is also damaging the planet.

Now, Kate Raworth of Oxford University’s Environmental Change Institute, has come up with an alternative. It is expounded in her book, Doughnut Economics: Seven Ways to think like a 21st-Century Economist (published by Penguin Random House).

Two recent Guardian articles explain the context of her theories, one by Kate herself (The Guardian 6th April 2017) and one by George Monbiot (The Guardian 12th April 2017), who reviews her book.  Raworth redraws the economy, embedding it in the Earth’s systems and in society.  It includes a doughnut-shaped diagram, which explains the concept, which follows the laws of nature, rather than the laws of motion, or physics. Instead of growth at all costs, her economic model allows us to thrive whilst saving the planet.

Kate expounds this theory in more detail, with video clips and diagrams on the following website:

http://evonomics.com/seven-ways-transform-21st-century-economics-economists/

It starts as follows:

No one can deny it: economics matters. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home. Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future.

Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Given the challenges of the 21st century—from climate change and extreme inequalities to recurring financial crises—this is shaping up to be a disaster. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks.

When I studied economics at university 25 years ago I believed it would empower me to help tackle humanity’s social and environmental challenges. But like many of today’s disillusioned students its disconnect from relevance and reality left me deeply frustrated. So I walked away from its theories and immersed myself in real-world economic challenges, from the villages of Zanzibar to the headquarters of the United Nations, and on to the campaign frontlines of Oxfam.

In the process I realized the obvious: that you can’t walk away from economics because it frames the world we inhabit, so I decided to walk back towards it and flip it on its head. What if we started economics with humanity’s goals for the 21st century, and then asked what economic mindset would give us half a chance of achieving them?

Spurred on by this question, I pushed aside my old economics textbooks and sought out the best emerging ideas that I could find, drawing on diverse schools of thought including complexity, ecological, feminist, behavioural and institutional economics, and set out to discover what happens when they all dance on the same page. The insights that I drew out imply that the economic future will be fascinating, but wildly unlike the past, so long as we equip ourselves with the mindset needed to take it on. So here are seven ways in which I believe we can all start to think like 21st century economists.

Go to her website to see the seven fully-illustrated steps for how this can be achieved.  She also explains on the following you tube clip:

 

And this TEDx talk to economists:

http://www.youtube.com/watch?v=1BHOflzxPjI