Do we need to change our economic model?

In the first part of this personal political manifesto I referred to what I termed our world view: a way of understanding the way we experience the world and our position in it; a way of making sense of what we do on a daily basis; and a way justifying, to ourselves and others, our actions and behaviour. Whether we are aware of it or not we all have such a world view. It is what we use to supply meaning and purpose to our lives, and is usually so embedded in our being that we just regard it as common sense. Traditionally this world view was provided by religion. For some of us it is derived from a political ideology. For most people, however, those who have not got strong religious or ideological adherences, this world view is provided by our economic model. In saying this I’m not suggesting that we are all familiar with economics, far from it. Merely that our dominant economic model, some version of capitalism, has so invaded our view of life as to provide this life with meaning and purpose. We measure the success of our lives according to the amount of wealth we have acquired; earning money is our primary goal in life.

“So what?” you ask. Well, in short, this dominant economic model is not only deeply flawed, it is unsustainable. It is driving to us exploit our natural environment through our relentless consumption of natural resources and to poison this environment through our relentless disposal of waste. On a national scale we measure the success of our economy through the GDP (gross domestic product) figure. This figure, which by a long way is the main measure of our national success, is the sum total of everything produced in a country. Or, to be more precise, every item or service produced that has a monetary value attached. It does not take into account unpaid work (looking after our children or an elderly relative at home for example) and it does not take into account money given for no work (through state benefits for example), though it does include work done to clear up after an environmental disaster. So, rather bizarrely, clearing up after a major oil spill contributes to our ‘national success’ whilst parents devoting time bringing up their children does not.

But even worse, this measure of success demands constant growth. And constant growth requires, in some form or another, the constant supply of raw materials – whether this is carbon-based fuel to drive industry, the raw materials to produce clothes and food, or the rare minerals and metals required for modern ICT equipment. However, no form of growth can continue ad infinitum. There is a limit to the resources we can extract from our natural environment, and there is a limit to the amount of waste we can dump into our atmosphere, oceans and land. For these reasons alone we need to think about economics in a completely different way. We need a different way to model our economy and a different way to model our individual success in life.

In a way I think that the main problem with the capitalist economic model is that it puts the cart before the horse. We are constantly told that we need to produce wealth in order to spend that wealth achieving what we need and want. We are constantly told that it’s good that a small minority people, through their financial expertise and entrepreneurship, appear to be accumulating most of this wealth because this wealth will ‘trickle down’ to all of us. This ‘trickle-down effect’ is one of the biggest fallacies of our current economic model. It simply doesn’t happen. The rich continue to get richer and the poor, in relative terms, get poorer. Inequality in most countries, the relative gap between those who are at the top of the financial hierarchy and those who are at the bottom, continues to grow – causing major social and health related problems (for an excellent explanation of this problem read the classic The Spirit Level by Richard Wilkinson & Kate Pickett). Moreover, in a very obvious sense, wealth, in itself, cannot sustain human life. You cannot eat it, drink it or breath it. You cannot take shelter in it. You can use to buy those things, but those things only require money because of the economic system. Wealth is the means to an end, not the end in itself.

So how about reversing this situation by placing the horse in its correct, and most effective position? How about measuring the end rather than the means as an indicator of our economic success? How about the transition to a ‘wellbeing economy’? I strongly believe that we need to redesign our economic model and that the first task should be to agree what are the measures of human wellbeing. The degree to which any economy meets these measures should be the measure of its success. Wealth or money, as a straight forward means of exchange, should simply be the means to achieve this end, not the end in itself. And to start off the debate, could I suggest that we could do an awful lot worse than adopt Kate Raworth’s Doughnut Economics as a model. This has a number of social foundations (such as water, food, health, education, work, housing, social and gender equality, energy, a political voice, peace and justice) and an ecological ceiling composed of a range of environmental factors. The aim of this model is to steer the economy such that it delivers the social foundations without exceeding the ecological ceiling.

For most of us this would not be an easy transition. But just try and imagine what life would be like if each national government, supported by some form of international structure, focussed on delivering these social foundations whilst avoiding the potentially devastating ecological ceilings. Imagine what the world would be like if the dominant world view, the way each of us gave our lives meaning and purpose, was based on such a model rather than the pursuit of wealth? You may say I’m a dreamer, but I’m not the only one.

The need for political leadership on climate issues

In the second part of my personal political manifesto I want to focus on climate issues, and in particular on the need for far greater political leadership than we are seeing at the moment. As the eminent climate scientist Michael E. Mann points out, seventy-one per cent of global carbon emissions come from the same hundred companies. These companies are not run by evil CEOs who are on a mission to render the Earth uninhabitable to humans, far from it. But because the raison d’être of the bosses and shareholders of these companies is so firmly embedded in free-market economics, because their ontological security (their whole reason or justification for existence) is so entangled in the dominant economic model, they can easily become blind to what scientists are saying. Because they believe that their operations are a force for good they are naturally inclined to dismiss any evidence that says the contrary. At worst they will find ways of discrediting the science (much like the tobacco industry did several decades ago), at best they will put their faith in market solutions to climate problems.

My greatest concern, however, is the extent to which our current response to the climate crisis is so well and truly focused on personal behaviour and individual action. This focus has the effect of deflecting attention away from the need to regulate bad industry behaviour. For example, we are being encouraged to eat less meat and dairy, in fact some media channels are currently being saturated with adverts for vegan food, but there has been no discussion about the regulation of farming and the food production industry. There is pressure on us to fly less, but not the slightest hint of greater regulation of aviation and the package holiday industry. And we are told that using active travel (walking and cycling) and public transport is much preferable to using the car, but because of the woeful shortcomings of our transport infrastructure this is next to impossible on many occasions, particularly in rural locations. What all this means is that it is far too easy for those of us concerned about the climate crisis to feel guilt at not doing enough, whilst those responsible for the vast majority of the problem are either guilt free or not being encouraged to ‘pull their weight’. This needs to change.

I am not saying that individual action is unimportant – far from it. But I am saying that there needs to be a far greater ‘top down’ response. There needs to be much greater control and regulation of big business and industry. One way to achieve this could be through ‘the market’. At the moment there is little or no cost to industry for the harmful effects of their operations. For example, there is no direct cost to the aviation, or marine, industries for the carbon their operations deposit into the atmosphere. In economic terms, these ‘costs’ are referred to as ‘externalities’. Rather than this cost being picked up by us all it would make far more sense to use market mechanisms and impose a carbon tax on their operations. This way the cost of package holidays and cheap clothing imported from the other side of the world greater reflect the true cost of these items. Governments do not even need to abandon ‘market economics’, they just need to regulate these markets such that they take into account the harm they cause. Governments need to stop cowering to big business and take more control of the economy. In a democracy, governments should be the vehicle for collective control. They should exert leadership. Though for this to be truly effective we will need to make some changes to our democratic decision making process. I will discuss this further in a couple of weeks.

Because so many of us simply do not fully understand science, governments also need to demonstrate leadership by having faith in science. Their decisions need to reflect the latest scientific evidence. Whilst, most importantly, this applies to climate science, it also applies to many other areas, particularly health and medicine. Next week’s post will focus on the economy, and the way our current economic model is no longer fit for purpose. For now, though, I want to simply point to a particular concern – the way that many governments prostrate themselves in front of the alter of free market economics. I argued above that some loss of market freedom is needed to allow the true cost of many items to be reflected in the cost consumers pay. I would also argue that belief in scientific evidence should carry far greater weight than belief in the invisible hand of markets to achieve the greater public good. For this to happen governments will need to display strong political leadership. They will need to follow the science and explain the science.

The toxic state of public discourse

Having had a break of several weeks from writing these weekly blogs I’ve decided to start the new year with a series of posts in which I sketch out a personal political manifesto. In doing so I must stress that I have no issue with the Green Party manifesto nor their policies, but I do like to think for myself and be as true to these thoughts as I can. This series of posts, therefore, will hopefully explain to anyone who is interested ‘where I’m coming from’. It will also allow me the opportunity to work through various thoughts I’ve had. I find writing a creative process, a process that allows me to organise my thoughts and unearth inconsistencies in them.

Most people, no doubt, will expect our climate and ecological emergency to be my main priority. As important as this issue is, however, I’m fast coming to the conclusion that there is an issue of equal importance – what the author James Hoggan calls “the toxic state of public discourse”. Particularly since the Brexit referendum in the UK and the election of Donald Trump in the USA, there seems to be not just a growing polarisation of political ‘thought’ but an escalating intolerance, bordering on hatred, of the ‘other side’. Whilst the popular press do not help in this process, the worst culprit by far must be social media. It’s become far too common to resort to hatred and abuse as methods of dismissing what someone has to say rather than rationally explaining why you disagree. Until this changes I think it unlikely that the actions necessary to resolve our climate crisis will be taken. In fact I would go as far as to suggest that the need to resolve the health of our public discourse affects all other area of policy. It will certainly inform my other posts in this series.

Part of the problem is that we are nowhere near as rational as we like to believe. Humans have evolved to make decisions mostly on emotional grounds, in response to fear, hunger or sexual desire for example. Our ability to reason, and in particular the emergence of science, are very recent developments. Most people, most of the time, do not fully understand science and much prefer to go with their ‘gut feeling’, adding a ‘reason’ why they have made a particular decision afterwards. The Brexit ‘debate’, with chants from certain politicians that “we’ve had enough of experts” only endorsed such decision making. When we follow this overly emotional path it becomes far too easy to feel threatened by anyone who disagrees with us and to respond aggressively.

Another dimension to this problem concerns what the sociologist Anthony Giddens calls our ontological security. Each of us has developed a world view: a way of understanding the way we experience the world and our position in it; a way of making sense of what we do on a daily basis; and a way justifying, to ourselves and others, our actions and behaviour. Providing most of our experiences can be explained by this world view we feel secure as a person. However, if something happens that threatens this world view, something like a radically changing climate for example, we feel deeply threatened. Our initial response to such challenges is to find a way from within our world view of explaining them away, thus preventing the emergence of deep feelings of insecurity. Rather than accept the science of climate change, for example, an acceptance that may involve a radical change to how we live, we tell ourselves that the scientists have ulterior motives and that what we are experiencing are just natural fluctuations in climate. Or we find a way to relabel the offending fossil fuel as ‘green coal’ and carry on as normal.

One way to steer our public discourse onto a healthy track would be to accept that there is no absolutely definitive position, answer or solution to any problem or issue. There cannot be, and science, properly understood, does not claim that there is. Scientific theories are working hypotheses, only valid until they fail to make accurate predictions or until the development of another theory that makes more comprehensive predictions. Through the scientific method all claims are peer reviewed and challenged. Socially we need to start developing a similar response to public discourse. If someone challenges our opinion it should be incumbent upon us to listen to those challenges. If we disagree we need to learn to respond politely, to explain why we disagree, and to not insult the other person for having the audacity to disagree with us. And perhaps, more importantly, we need to be prepared to admit that we may have been wrong and change our opinion accordingly.

It would also help if we started to develop a greater understanding of science in general, and of complexity science in particular. Complexity science is the science of complex, dynamic systems. Human bodies, social systems, and our natural environment are all complex systems, but the important thing to realise is that all such systems are always embedded within a larger system, or systems, which they interact with and are dependent upon. This means that everything interacts with the world it inhabits. As this world will always change to some degree the embedded system will also need to change to some degree. Nothing, absolutely nothing, remains the same for ever. Moreover, due to the dynamic nature of such systems, novelty, new phenomena, will emerge at some point. Whilst it is quite natural for the embedded system to resist change (homeostasis) it also vital that if necessary it does change. If it doesn’t it may well collapse.