Can a Scottish “economy for wellbeing” be the Leicester City of politics?

In another of our big-picture pieces on what the new Scottish Government should aim at over the coming five years, Katherine Trebeck from Oxfam asks: when will our politicians get serious about getting beyond GDP?

Last weekend proved the unexpected can and does happen – just look at Leicester City. Who’d have thought it?

Indeed, this week saw another surprising – if less well noticed – development. No, not the SNP’s widely-predicted election victory, but The Economist recognising the flaws of Gross Domestic Product (GDP) as a measure of national progress. It’s a welcome, if overdue, shift.

Maybe then, it’s a week for thinking differently. If so, perhaps Scotland will also allow itself to think the previously unthinkable too.

Will we think beyond the ‘realistic’ or the ‘do-able’ to what is necessary (and indeed possible), even if this means upsetting some habits, some orthodoxy, and some vested interests? In fact, especially if it does! Could Scotland follow Leicester’s lead to become a different kind of champion: one that leads the world in charting a different course, beyond GDP?

We can start by asking why we have an economic system configured in a way that rewards the powerful and gives power to those who already have the most.

This system and the politics that too often maintain it, rarely challenges the calls for more growth and it therefore dodges the apparently more challenging conversation about sharing the great wealth we already have more fairly.

We like to believe we enjoy a relatively enlightened government in Scotland and, to the extent that protecting the environment and the promotion of greater equality often get top line billing, we do so with some justification. But the environment and greater equality are positioned as on a par with GDP growth (or too often below it in the pecking order).

In this sense, rather than seeing growth as a means to an ends (as it can be under the right circumstances, but not always), GDP growth remains the end in itself, albeit with some nice Scottish qualifiers (‘inclusive growth’ and ‘sustainable growth’).

By continuing to value GDP growth so highly, our economic model pursues an approach to progress and development that demands more resources, more effort, more political manoeuvring, and more patience than need be. It is an inefficient approach to delivering good lives sustainably.

At its simplest, this ‘long way around’ to good lives entails using the spoils of growth to heal what we break, hurt, pollute, and damage in our quest for ‘more’. Essentially the long road is ‘end of play’ redistribution which simply places sticking plasters over the wounds caused during the match.

Scotland has long been awake to the notion of ‘failure demand’ (that is, spending driven by not getting things right in the first place), but it is arguably more extensive (in both UK and Scottish policies) than it seems at first glance. Take these examples:

  • Tax credits for those in jobs which do not pay enough to live on
  • Interventionist medical treatment for those alienated and stressed by the precariousness of this economy
  • Welfare payments and food parcels for those cast aside by companies who downsize in their quest for short term shareholder value
  • Flood defences and shelters for those whose homes are flooded as climate chaos worsens.

All this provision is undeniably vitally important for recipients in the short term (there is no doubt about that), but they are designed to heal and ameliorate, rather than prevent harm in the first place.

The ‘long way around’ approach is also environmentally unsustainable. It depends on a growing economy which is dangerously pushing beyond safe planetary boundaries. In many countries, this growth is premised on exploiting finite natural resources and has been described as ‘neo-extractivist’, dare I mention ‘North Sea oil’?.

By charting a different course Scotland will recognise that more is not always good.

It will understand that the nature of economic growth as currently pursued may destroy the environment which is so important for economic and human wellbeing – in Scotland, and globally.

It will be a course that no longer needs to make the ‘business case’ for addressing extreme economic inequality and protecting the environment. This is seen in so many assertions that reducing inequality is ‘good for growth’ or that protecting the planet will boost the economy.

Addressing inequality and protecting the planet will instead be embraced as important in their own right. And this perspective will critically and consistently ask what growth would do for people and planet, switching our focus to its quality and distribution.

This means creating an economy that does more of the heavy lifting upfront. This economy will generate jobs that deliver basic needs like security and sufficiency of income, but also – importantly – psychological needs such as control, autonomy, self-esteem, and meaning.

Scotland is a place of heightened opportunity. It is an over-used cliché, but Scotland stands at a crossroads. With the greater powers over tax and welfare shifting to the Scottish Parliament, people are discussing what sort of country we want to live in and how Holyrood can help deliver it.

Organisations and government are responding to this ‘democratic renewal’ by recognising the need to really engage and involve our communities, rather than just hear from those who reply to traditional ‘consultation’ processes.

There are some solid foundations for progress: Scotland has signed up to the Sustainable Development Goals; we have a National Performance Framework that is markedly better than GDP alone; we have the Business Pledge and the Fair Work Convention; we’re investing in fostering the circular economy; and we’ve benefitted from an independent Poverty and Inequality Advisor.

Now is the time to put some teeth into those platforms. We also need to stare down those who demand a ‘business case’ before we take the action needed. Whether it’s addressing extreme economic inequality, or making the entire economy circular, or going further in nudging GDP from its ill-deserved perch whilst putting in place a robust plan for meeting the SDGs.

In a week which proved the unexpected still happens, Scotland can embark on a new course and build an economic model that puts people and planet first. In this week (if not next!), we should all hope for the unexpected.

DR KATHERINE TREBECK is Senior Researcher with Oxfam GB Global Research Team, an Honorary Professor at the University of the West of Scotland, and an Honorary Senior Research Fellow at the University of Strathclyde

Comments (6)

Join the Discussion

Your email address will not be published.

  1. Mathew says:

    Sadly I can’t see the SNP Government having the imagination to engage with the issues sketched out above. I made a similar comment on last weeks ‘Anthropocene’ article. They are solely focused on Indyref2 – the only card they hold.
    This lack of imagination (within SNP) is why people vote Green on the list. Wisely, in my opinion, they are attempting to bring some fresh ideas to the Scottish parliament.

  2. Peter says:

    I’d like to nominate Katherine Trebeck for the position of Scotland’s first post-indyref President!

  3. Ian Kirkwood says:

    Even the phenomenon of trying to find better measures of success than GDP is itself a symptom of economic management as crisis management. But in our current stone age fiscal arrangement GDP is NOT paramount. If it were, then any means of increasing GDP would be adopted.

    AGR (Annual Ground Rent) promises to at least double Scotland’s historic growth rate from 2% to 4% and change its £12 billion deficit into a growing and sustainable £12 billion surplus. Yet AGR is not being used. Why not?

    So that public value, in the form of site market prices, generated by tax investments in amenities, can continue to be donated to land owners as free capital gains.

    If the AGR were collected instead of traditional taxes — society simply collecting the value it creates — (plus natural resource rents) inequality would be halted (Adam Smith). It is the first duty of a government to collect the surplus we all create by working together. AGR is the glue that allows a civilisation to flourish and its privatisation is the explanation for many a fall of civilisation.

    GDP and inequality are not mutually exclusive. Adopting AGR frees enterprises from repressive taxes, raising employment, productivity etc AND GDP. Society collects the growing site values it creates by investing taxes in amenities and so fully funds public services.

    AGR gives each citizen back a share in his or her country. It’s is the way to end austerity by REDUCING tax.

  4. Karen Allan says:

    The best way to think of economic growth is that a car crash adds to it (insurance goes up; medical bills, police and ambulance need paid; cars need fixed) but in no way could a car crash be considered a “good” thing!

    Better to measure health, happiness, longevity, childhood and maternal mortality, suicide and depression, breast feeding, work-life balance, state of the environment, biodiversity, soil erosion …

    1. Ian Kirkwood says:

      I do agree. Each of the indicators you mention are made worse by arbitrary taxation but would be solved by AGR. For example, 60,000 annual UK premature deaths (up to an average 12 years in the worst locations) are attributable to our chosen tax system (free capital gains for land owners). Under full AGR that figure would reduce to zero.

Help keep our journalism independent

We don’t take any advertising, we don’t hide behind a pay wall and we don’t keep harassing you for crowd-funding. We’re entirely dependent on our readers to support us.

Subscribe to regular bella in your inbox

Don’t miss a single article. Enter your email address on our subscribe page by clicking the button below. It is completely free and you can easily unsubscribe at any time.