An Economy for the 21st Century as if People and Planet Really Mattered

“Politicians may talk of ‘inclusive’ or ‘sustainable’ growth, but most are unwilling to challenge a system that disproportionately rewards – in some cases spectacularly – those who put profit above our communities and environment”, argues Úna Bartley, as she kicks-off her role as Guest Editor for Bella.

Frustration is in the air. While Brexit is an obvious source, the referendum and subsequent debate have merely exposed a set of tensions that go much deeper and far wider than our relationship with Europe. Many of us look on with a feeling of helplessness at a system that allows poverty to rise across working households while one or two individuals swell their billions by asset stripping companies that once provided meaningful work, fair pay and the chance of a decent pension for ordinary people. Elsewhere we see school children taking to the streets to vent their frustration at government inaction on climate change, rightly angry at the lack of urgency in relation to a disaster which will disproportionately affect them and their children.

The sense that there is something rotten at the core of our economic and political system is not confined to the UK. Witness the rise of the gilets jaunes movement in France or the upsurge in support across the globe for populist parties and ‘strong men’ as leaders. Yet many people’s fears and frustrations are unlikely to be resolved by a change of government, a move away from Europe, some tinkering around the edges of social policy or seeking to meekly placate those who call for a transformation of the current system.

Something much more fundamental is required – a deliberate repurposing of our current economic model, a model so narrowly focused on the pursuit of GDP and short term profit, that it literally fails to count the damage it wreaks on the environment, the cohesion of our communities and the wellbeing of our citizens.

The inherent contradiction of a system built for and dependent on endless growth within a planet of finite resources is well-rehearsed, and yet this system is upheld by all of the main political parties and by the mainstream media. The Scottish press continues to salivate at the prospect of more flight slots at Scottish airports, more oilfields opening in the North Sea and rising house prices, while never failing to sound decidedly upbeat when analysts announce a growth in the latest GDP figures without casting a wider gaze at levels of inequality, the life chances of Scottish families, or our natural habitat.

Politicians may talk of ‘inclusive’ or ‘sustainable’ growth, but most are unwilling to challenge a system that disproportionately rewards – in some cases spectacularly – those who put profit above our communities and environment. No wonder people are disillusioned by politicians’ electoral promises.

Yet for all the current frustrations and anger, change is also in the air. Across a range of sectors and communities, individuals are channeling their dissatisfaction into alternative economic models and practices.

The Wellbeing Economy Alliance (WEAll) Scotland seeks to further catalyse that growing appetite for change and to support a global movement for a new economic system – one that puts people and the planet before profit and economic growth. WEAll aims to create space for a different narrative on the economy, including safe spaces for business leaders and politicians to explore alternatives.

Scotland has been a founding member of the Wellbeing Economy Governments (WEGo), which brings together a small group of governments (including New Zealand and Iceland) to explore wellbeing and the quality of growth over simple measures of economic output. This is a welcome development although no-one, be they governments or individuals, has a roadmap to a wellbeing economy or a blueprint of what an economy might look like in practice.

WEAll will encourage the development of such an economy by supporting, connecting and amplifying the work of those who are already pioneering alternative practices and demanding radical change of our institutions.

Through a series of blogs published here on Bella Caledonia we hope to illustrate both the appetite for more radical thinking in Scotland and showcase examples of innovative practice which could put us on the road to a different kind of economy.

We hear how feminists have called for decades for a different economic model (that accounts for the unpaid work, mainly undertaken by women). We see how that call has been picked up by the Rethinking Economics movement which is demanding a review of how Economics is taught in our universities so that economic graduates are equipped to understand and propose radical alternatives to address the flaws in our current economic system. One such policy that is explored in more detail here is the concept of a citizen’s basic income.

Other blogs highlight the support in Scotland for: alternative business models, such as employee ownership; a fintech sector which focuses on good social outcomes; innovative and ethical financial investment models for communities, individuals and businesses; and community energy projects that have given literally hundreds of urban and rural communities up and down the country a share in their energy resources as well as a say in how any profits are used for the benefit of their community.

At a time of such frustration, these examples illustrate how Scotland can offer inspiration as well as practical alternatives of how our economy could be repurposed for a different end. Our economy infiltrates, underpins and defines all aspects of our lives and, as someone famously quipped, is too important to be left to economists. As such it is incumbent upon us all to understand, participate and promote the alternatives that will bring about the paradigm shift needed to move us to an economy where people and planet really matter more than profit and growth.

 

 

 

Comments (17)

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  1. Mark Bevis says:

    Sustainable growth is a contradiction in terms and is the latest form of greenwashing. As soon as any body, political, enviromental or economic mentions growth I immediately turn off. Degrowth, now that’s a different matter.
    The only reason renewables are not mandatory is because corporations haven’t yet worked out a way of corporatising it. Solar especially is ideal for devolved local control over energy.

    What I fail to hear is, what about the concept of no economy whatsoever? As economics only serves a tiny elite, it is of no value to the rest of it, just do away with the whole concept completely. As an interim, sure, introduce UBI, maximum wage, rent caps, 3-4 day working week, ban advertising, but in the end, money will become obsolete, whether by our design or by Mother Nature’s revenge.

    1. Una Bartley says:

      Thanks Mark. Good to get your thoughts. You might be interested in the blog that went up on community energy as part of this series and how it could contribute to a wellbeing economy. A success story in how we can start to transition to a different kind of economy – as a step on the road to no economy….? I guess it all depends on how you define ‘economy’?

  2. Derek Henry says:

    Concept of a citizen’s basic income.

    Won’t work by itself because those that do have to go out to work won’t vote for it. Regardless if you are on a Citizen’s basic income you are still using real resources only difference is those on the citizens basic income are not doing anythin to produce those real resources.

    Psychological Loss Aversion (endowment effect) is relevant to the debate but you never see it.

    Research studies into the psychological value of losses and gains have identified a loss aversion ratio of between 1.5 and 2.5. This means that a loss that is identical in money terms to a gain is valued up to 2.5 times more than the gain.

    So if you give somebody something, and then increases taxes to take it away again you are going to create far more anger and upset than if you hadn’t bothered in the first place.

    Similarly this should apply to progressive tax policy. Voters notice that they are being taxed. So change the process so they don’t. They should be calculated and paid over by businesses behind the scenes – because businesses don’t vote.

    The idea should be that employees always get their gross salary in their hands without any deductions. All the deductions should be placed on the employer to pay directly and calculated as additional to the gross salary. Similarly with the sales tax – it should be included in the advertised price and handled behind the scenes by business. Hut taxes should be part of the rent/mortgage, etc.

    The right want to make taxes explicit to trigger loss aversion and drive a movement to eliminate them. The left ought to take the alternative view, and a Job Guarantee helps them do that because the ‘well jobs will vanish that businesses use to scare people’ argument is neutralised.

    We have so many different types of basic incomes already the main one being how much should society pay people for having a child. Every year since it has been brought in it has been cut so why is that – Psychological Loss Aversion

    People who don’t have children see their taxes go up and vote against it. With shows like benfits street whereby somebody who has never worked a day in their life has 12 kids and lives off the claim of child benefit is used a stick to beat it with.

    A citizens basic income will suffer the exact same fate due to Psychological Loss Aversion large groups of people will just vote for a party that promise to cut it to the bone or get rid of it. Which is why of course it has never worked anywhere in the world where it has been tested. Which ultimately in the end means a basic income does not solve poverty as what people will get will be a stipend.

    If society is only willing to give people £20.70 per week for the oldest child and £13.70 per week for subsequent children and has been allowed to reach this state of affairs due to Psychological Loss Aversion then the basic income hasn’t got a cat in hells chance.

    I wouldn’t be happy if I was going out to work everyday to provide the real resources needed that those on the basic income would use for free without actually doing anything for them. There’s probably 100’s of millions like me that would feel the same way.

    The only way it will work is if those on the basic income put something back into society.

    So if you chose to surf all day on your basic income then 5 days a week you have to teach people how to surf.

    If you chose to paint all day on your basic income then 5 days a week you have to teach people to paint.

    If you choose to sit in your house all day and play the playstation then are you really entitled to the basic income ?

    You have to put something back into society as payback for the real resources that you are going to be using for free on the basic income that somebody who went out to work produced. Otherwise those real resources shoud be put to better use elsewhere.

    1. Wul says:

      “If you choose to sit in your house all day and play the playstation then are you really entitled to the basic income ?”

      Derek, a thought experiment: How about if you choose to sit in your house all day and play the playstation and have a large income from shares in BP*, are you entitled to that income ?

      The oil in the ground resulted from geological activity over eons, it is clearly an asset belonging to the whole nation and yet a few folk get an unearned income for life off the back of that asset. A reward for life ( at your expense) for happily being wealthy maybe 30 years ago? ( or having a wealthy parent) Is that fair?

      My point is there are different ways of looking at what “contribution” and “entitlement” mean to us as citizens. If robots take all our jobs, as a result of human ingenuity, aren’t all humans entitled to compensation for being a member of the group which created the innovation and loss of opportunity?

      Your argument that you won’t contribute from your salary to assist someone who isn’t labouring is a simplistic one. I agree with you that most folk would find it abhorrent however. Perhaps if we were educated into the benefits of a basic income, we would be happier to contribute? Everyone who stays at home on the Playstation is leaving a job for someone else to fill ( more opportunity for our kids), they aren’t flying all over the globe creating CO2 pollution, or buying flash cars or contributing to our mountains of plastic. There are benefits to the rest of us.

      The idea of compulsory work for all is kind of weird anyway on a planet where heat & energy beams from the sky, drinking water falls on our heads and food grows under our feet. As one internet meme has it: “Planet Earth; human beings are the only species that pays to live here”

      1. Derek Henry says:

        There’s no benefits to basic income without a job guarentee attached.

        It’s impossible to expain to people who go out to work all day that they have to go out to work all day whilst others sit at home. It’s like adding another layer to the class war which isn’t needed. Who gets to decide who goes out to work and who stays at home ? Will it be done like a national lottery ?

        Studies done on Psychological Loss Aversion (endowment effect) prove it.

        No amount of education will make it so as the child benefit proves. Slashing the pension age which can be done is as close as you will get.

        A large % of people who support stand alone basic income call it “simplistic” because they have no answer to this conundrum and why it has failed everywhere it has been tried.

        The job guarentee delivers the benefits that the basic income promises

        https://docs.wixstatic.com/ugd/f4c1a3_a41dc8241e4e482591b513791ef17a2e.pdf

        Finally the debate is coming to these shores which has been debated in the US for over a decade. We should all welome it.

        1. Wul says:

          Thanks Derek, You’ve clearly done more research on this topic than I.

          I still don’t know what the “Job Guarantee” is. Neither your posts nor the linked article say what it actually is.

          My understanding of a basic income would be that many people would still choose to work while receiving it. They would though, be freed up to pursue work that had higher financial risk (self employment) or lower pay since they would have a cushion from the basic income.

          In the places where you say it “failed” did the recipients just sit around all day doing nothing, happy with their £70/week or whatever?

          1. Wul says:

            Sorry Derek,

            The second of your links, posted below, has better info. I missed it first time around. If neo-liberals are for it, then I’m wary. Perhaps for the same reasons they promote a flat tax rate.

    2. Una Bartley says:

      See separate blog on Citizens Income as part of the if you’d like to carry on the discussion with expert in the field…. 🙂

  3. Chris Ballance says:

    Keep up the good work Una!

    1. Una Bartley says:

      Thanks Chris! Long time…

  4. Derek Henry says:

    A job guarentee tied in with a UBI

    Is far superior in every way than just a stand alone UBI.

    There is an arguement to be made to why not lower the state retirement age to 45- 50 and pay the retirement pension earlier? Which is possible when you actually know how pensions work.

    Here is an excellent 5 part series on it scroll half way down the page and you’ll find the series even includes a robot edition

    http://bilbo.economicoutlook.net/blog/?s=basic+income

    1. Wul says:

      I’m all for the 45 year old retirement age Derek. Bring it on.

      The idea that everyone who “works” is making a net contribution to our economy and environment is open to challenge.
      There are plenty of jobs that actually damage our environment and cost us money. (sheep farming springs to mind as one, merchant banking and city stock trading another, how about the advertising industry?)

      1. Derek says:

        That’s a different question.

        It ties in with what jobs should people do on the job guarentee ?

        MMT economists have been answering that question for over a decade now.

        Do you want them doing good jobs for public puropse or bad jobs that destroy the environment. After all it was 2 MMT’rs in the US that came up with the green new deal Stephanie Kelton and Ocasio-Cortez.

        Fadhel Kaboub, Rohan Grey and Mathew Forstater who is the reasearch director from the global institute of for sustainable proseperity all MMT’rs have been at this for years.

        I was lucky enough to get most of the them on the MMT Scotland advisory board when I brought people together to set it up. MMT Scotland has got the best in the world on that advisory board it is time Scotland started to use them.

  5. Andy Anderson says:

    Una has hit the nail on the head with this article.
    One of the reasons why I see the struggle for Scottish independence is the need for a fundamental change in our economic structure, one which fundamentally changes the whole concept of what are the important economic objectives which our society should be pursuing. It is clear to me that while millions of people all across the capitalist world now feel the need for change and are searching for answers, only a relatively small proportion of this number have began to recognise the nature of the problem. However I think that this awareness is growing fast and I am hopeful that it will force change and sweep away the units of power who are wedded to the status quo.

    1. Una Bartley says:

      Thanks Andy. Couldn’t agree more on the need to educate more people on how our current economic model works and why it is so damaging for our society and our environment

  6. Christie Williamson says:

    Brilliant, Úna. More of this kind of thing!

    1. Much more coming up all this week …

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