In the context of the UK Government’s belated response to Covid-19, there was no more logical point of departure than an analysis of our economic system. Boris Johnson’s delay in issuing protective measures was a telling strategic misjudgment.[i] It revealed a policy approach predominated by economic concerns – an approach that all too often prioritises the protection of Gross Domestic Product (GDP) over people’s lives.[ii]
The type of thinking that places profit and monetary gain above all else has become the hallmark of modern Western society. It is a harrowing tale we have heard many times before – our global economic system, dominated by mindless consumption, is driving both social fragmentation and environmental destruction.[iii] Rife with zero sum competition and greed, this system of unfettered neoliberal capitalism is entrenched in colonial power structures. We see the symptoms of this all around us, from the exploitation of migrant workers to the melting of Arctic sea ice. The intersecting and destructive effect that the economy has can be seen on many levels. Take the burning of the Amazon rainforest in 2019: this impacted not only the ‘carbon sinks’ and interdependent ecosystems that thrive there, but also frontline communities whose lands are encroached by illegal loggers as well as flames. These interconnected issues are explored by the Climate Justice Alliance when they write:
“After centuries of global plunder, the profit-driven industrial economy rooted in patriarchy and white supremacy is severely undermining the life support systems of the planet.”
The current global economic snapshot is demarcated by exploitation: both in the form of extractivism and systemic oppression. By many measurements, the overall standard of living has increased. [iv] Despite the fact that population has doubled since 1970, life expectancy has increased from age 59 to age 72, while the number of people living in extreme poverty has halved.[v] However, any analysis that considers only these dimensions is reductionist, as it does not take into account increasing inequality and inequity. It also refrains from addressing the ecological impact of current trends in economic and population growth, ignoring that future generations will be forced to live with the ecocidal consequences of our way of life.[vi]
The Exponential Growth Principle#
The ‘limits to growth’ dilemma states that in a planet of finite resources, the human population and its economies of scale cannot continue to grow infinitely.[vii] Incrementally rising consumption is in direct conflict with the earth’s non-renewable resources, and we are rapidly reaching the extent our limits. As panelist Sean Chamberlin reflected in his work:
“Our globalised world finds itself caught on the horns of a seemingly impossible dilemma – either cease growing, and so collapse the economy on which we all depend, or continue to grow until we overwhelm and destroy the ecosystems on which we all depend.”[viii]
This collapse versus collapse predicament, which pits our economy and ecology against each other, is precisely the reason why we need to focus on a rapid shift away from infinite growth - in order to survive in a world with limits.
The Banking System#
While the financial system is made up of many components, arguably one area most in need of structural change is the banking system. In the banking sector, money has become increasingly privatised as publicly owned cash is being taken over by companies such as Visa and Mastercard. Democracy is being eroded by big business, with data harvesting increasingly becoming a mode of exerting power. 44% of global wealth is captured by the richest 1%, with ‘ultra-high net worth’ individuals worth more than 30 million USD holding a disproportionate share.[ix]
Despite the gains made by the Occupy movement after the 2008 financial crash the global financial system continues to be dangerously underregulated.[x] Power is concentrated in the banking sector, as a monopoly of banks control the creation of money and debt.[xi] In the UK, the financial sector is disproportionately skewed toward property markets rather than social wellbeing and environmental stability.
At the heart of any proposed solutions to the economy is understanding our financial system for what it truly is: a set of structures that were chosen, as they hitherto made sense as a way of organising our lives. While it may feel so real and tangible to us, money is in fact just a symbolic representation of a ‘promise to pay.’ This promise has existed in the simplest of forms since the earliest exchange economies.[xii] As such, any resistance toward altering the financial system – in the form of policy that continues to concentrate on driving economic growth - are merely a fierce attachment to an outmoded system of organising that no longer serves us. As speaker and author of The Production of Money Ann Pettifor so aptly stated ‘it is our ability to promise that is the issue,’ rather than any limitation in our capacity to change the economy itself.[xiii]
A Just Transition#
Calls for a radical overhaul have existed for decades – from socialism through to the democratisation of our economy. Over the last few years, the discussion of proposed solutions has come to shape a new paradigm: that of the ‘just transition.’ This concept is outlined by the Climate Justice Alliance as:
“A vision-led, unifying and place-based set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.”[xiv]
With its origins in the trade union movement, the term ‘just transition’ was coined in the 1990s and initially referred to interventions that protected worker’s rights when environmental protection policies led to unemployment.[xv] In the past years, it has come to encompass calls for policies that protect livelihoods when shifting national economies toward decarbonised production, by creating environmentally and socially sustainable jobs. It encompasses programs of state-led investment in dignified, productive and ecologically sustainable jobs. These jobs are in clean industry and centre a commitment to social justice. For national governments that are legislating to meet their Paris Agreement targets and starting to move toward a low carbon or ‘net-zero’ economy, it is important to minimise the hardships for the workers and communities whose sectors will be radically altered. It is critical that any attempts at combatting climate change and protecting biodiversity be both environmentally and socially sustainable, especially in regards to employment opportunities. When analysing the just transition, participants of the conference raised solutions that fell under two key components: democratising the economy, and the movement for a Green New Deal.
Democratising the Economy#
Solutions for democratising the economy are manifold and focus on addressing the hyper-globalisation and privatisation of the financial system. Suggestions raised in the conference included approaches such as; diversifying banks with community banking, social investment, an independent national data store and increasing citizen scrutiny through accountability measures.[xvi] Creating a Universal Basic Income (UBI) alongside increased public ownership of money is another proposed solution, including a publicly owned digital form of cash.[xvii] A regulatory system that guides credit to different areas of the economy is essential, in order to prevent money from being transferred between the one percent with access. Panelist Fran Boait, from the research and campaigning organisation Positive Money, believes that the above tasks are critical in recapturing and domesticating the financial system, so that it is no longer out of reach regulation and the oversight of democratic governments.[xviii]
The Green New Deal#
The Green New Deal (GND) is a practical plan for tackling the crises driven by the economy, including the climate emergency and corrosive inequality underpinning a finance system that serves an elite few.[xix] Panellist Ann Pettifor was one of the architects of the GND when it was originally developed as a concept during discussions in 2008 about the links between the financial system and climate breakdown.[xx] Revived by Alexandria Ocasio Cortez in the US, it has gained cross-party momentum and been adopted by a growing number of movements across the globe.[xxi] Reclaiming political power over the economic system in order to tackle climate breakdown is at the heart of the GND. It sees the limits to exponential growth and aims to address the way in which the economic system is deeply exploitative to both people and nature. Most importantly, catalysed by public investment, the GND centres social justice. It provides not only a pathway for workers to transition away from harmful, carbon intensive jobs, but also platforms through which communities have a say over the decision that affect their daily lives. It aims to redistribute resources and power to local communities by ensuring workers play an active role in setting national priorities and co-designing strategies for a just transition.[xxii]
It is not just policy change at the national level, but also responses at the level of the community that are of equal importance. As speaker Shaun Chamberlin, author of The Transition Timeline stated, ‘large scale problems require (diverse) small scale solutions within a large framework.’[xxiii] Among panelists it was widely agreed that technological advances and renewable energy are not a solve-all to the current crisis we face. Of fundamental importance is not just supply, but the ever-growing demand. Many of the speakers agreed that the first world will not be able limit atmospheric warming or environmental degradation at the rate or scale that is needed without a change in our consumption. It was argued that we need to determine what is possible within our ecological limits and adjust our lifestyles accordingly.
These calls fit snugly within the ‘de-growth’ paradigm, a theory and movement that began in France and emphasises the importance of reducing global production and consumption. De-growth advocates for the abandonment of GDP metrics in favour of wellbeing indicators; a new measurement of prosperity that focuses on social justice and economic sustainability.[xxiv] As speaker Fran Boait writes:
“GDP growth consistently fails to deliver enhanced life satisfaction, alleviation of poverty, or environmental protection.”
This paradigm leads us toward a self-sufficient way of life that fits comfortably within our ecological constraints. Enacting this paradigm however, is not just within the realms of policy. Drawing on the work of environmental writer David Flemming, Chamberlin proposes solutions at the level of the community that centre human connectedness, security in relationships and mutual aid. He calls for communities to globalise the world of networking and solidarity and to localise the world of ‘stuff.’[xxv]
An exploration of the New Economy in the first session of the Regenerative Activism series provided numerous suggestions for altering our financial system. This included policy architecture for a pathway forward; the first steps toward the large-scale overhaul that is needed to transform our economic system. The series demonstrated however, that it is not just policy change that is needed if we are to chart a different course. Panelists argued that the just transition to a new economy is one that requires action and activism at multiple levels. Alongside economic policy, it is necessary to focus on change at the level of the community. These changes need to focus not on economic growth, but on growth of value systems that centre the health and wellbeing of both people and planet.
As activists, enacting changes in practice is not just about organising for a Green New Deal or a democratised economy. It is also about how we understand ourselves and our needs within a world with limits. It is about how we connect with and engage those around us, especially those that are exploited and marginalised by the very processes that make neoliberal economies thrive. Enacting this in practice means placing justice and equity at the forefront of our actions. It means ensuring that changes made – at the level of policy or the community - are informed by the voices of the diverse groups that the economy harms. Future solutions must not bypass past and present wounds – the historical legacy of an economic system that views not only nature, but also certain communities, solely as extractive resources to fuel infinite growth.[xxvi] These changes must allow us to reimagine how we treat ourselves, each other and the environment both within the realms of economic policy, as well as outside of it. While the world’s leaders continue to hold tight to the concept of ‘growth,’ the series has shone light on a number of key thinkers and movements, who are garnering momentum for a new paradigm. In these troubled times, each one of us has a role to play in what comes next.
[i] Stephens, P. (2020). “How politics thwarted the UK’s Covid-19 response,” Financial Times. Retrieved from: https://www.ft.com/content/af17147c-84a1-11ea-b555-37a289098206.
[ii] Kartal, A. (2020). “Too slow too late: UK gov’t reaction to corona virus under scrutiny,” Anadolu Agency. Retrieved from: https://www.aa.com.tr/en/analysis/analysis-too-slow-too-late-uk-govt-reaction-to-coronavirus-under-scrutiny/1811171.
[iii] Chomsky, N. (1999). Profit Over People: Neoliberalism and Global Order. Seven Stories Press: New York.
Klein, N. (2009). The Shock Doctrine: the Rise of Disaster Capitalism. Knopf Canada: Toronto.
Li, M. (2010). “The end of the “end of history”: the structural crisis of capitalism and the fat of humanity. Science & Society. 74(3). Retrieved from: https://guilfordjournals.com/doi/pdf/10.1521/siso.2010.74.3.290.
[iv] Rosling, H. (2018). Factfulness: 10 Reasons We’re Wrong About the World–and Why Things Are Better Than You Think. Flatiron Books: New York.
[v] Kolbert, E. (2020). “The Case for catastrophe,” National Geographic, p. 14: 237(4).
[vi] Berggren, C. (2018). “The one-sided world view of Hans Rosling,” Quillette. Retrieved from: https://quillette.com/2018/11/16/the-one-sided-worldview-of-hans-rosling/.
[vii] Meadows, D. & Randers, J. (1972). The Limits to Growth. Universe Books: New York.
[viii] Chamberlin, S. (2018). “The sequel: life after economic growth,” Tikkun. Retrieved from: https://www.resilience.org/stories/2018-12-13/the-sequel-life-after-economic-growth/.
[ix] Institute for Policy Studies. (2019). Global Inequality. Retrieved from: https://inequality.org/facts/global-inequality/.
[x] Bucko, A. & Fox, M. (2013). Occupy Spirituality: A Radical Vision for a New Generation.
[xi] Positive Money. (2020). How Banks Create Money. Retrieved from: https://positivemoney.org/how-money-%20works/how-banks-%20create-money/.
[xii] Harari, Y. (2014). Sapiens: A Brief History of Humankind. HarperCollins: New York.
[xiii] Pettifor, A. (2017). The Production of Money: How to Break the Power of Bankers. Verso: New York.
[xiv] Climate Justice Alliance. (2020). Just Transition: A Framework For Change. Retrieved from: https://climatejusticealliance.org/just-transition/.
[xv] Burrow, S. (2017). Just transition: a report for the OECD, Just Transition Centre. Retrieved from: https://www.oecd.org/environment/cc/g20-climate/collapsecontents/Just-Transition-Centre-report-just-transition.pdf.
[xvi] Fahnbulleh, M. (2020). Change the rules: new rules for the economy, New Economics Foundation. Retrieved from: https://neweconomics.org/uploads/files/newrules2020.pdf.
[xvii] Boait, F. (2018). Treasury Select Committee Inquiry Into Consumers Access to Financial Services: Positive Money Submission. Retrieved from: https://positivemoney.org/policy-resources/.
Widerquist, K. (2017). “A list of controversial claims on both sides of the UBI debate,” Basic Income Earth Network. Retrieved from: https://basicincome.org/news/2017/06/list-controversial-claims-side-ubi-debate/.
[xviii] Barmes, D. & Boait, F. (2020). “The tragedy of growth,” PositiveMoney. Retrieved from: http://positivemoney.org/wp-content/uploads/2020/05/Positive-Money-Tragedy-of-Growth-Digital-Single-Pages.pdf.
[xix] The Green New Deal Group. (2020). Our Core Principles. Retrieved from: https://greennewdealgroup.org/principles/.
Klein, N. (2019). On Fire: The Burning Case for a Green New Deal. Simon & Schuster: New York.
[xx] Pettifor, A. (2019). The Case For The Green New Deal. Verso: London.
Pettifor, A. (2020). Investing in the Future: Why Europe Needs A Green New Deal. Retrieved from: https://www.annpettifor.com/2020/01/investing-in-the-future-why-europe-needs-a-green-new-deal/.
[xxi] Powell, D., Krebel, L. & Van Lerven, F. (2019). “Five ways to fund a Green New Deal,” New Economics Foundation. Retrieved from: https://neweconomics.org/uploads/files/FivewaystofundGND.pdf.
[xxii] Powell, D., Balata, F., Van Lerven, F. & Welsh, M. (2019). Trust in transition: climate breakdown and high carbon workers, New Economics Foundation. Retrieved from: https://neweconomics.org/uploads/files/NEF_trust-in-transition.pdf.
[xxiii] Chamberlin, S. (2009). The Transition Timeline: For a Local, Resilient Future. Chelsea Green: London.
[xxiv] Demaria, F., Schneider, F., Sekulova, F. & Martinez-Alier, J. (2013). “What is degrowth? From an activist slogan to a social movement,” Environmental Values. 22(2). Retrieved from: https://doi.org/10.3197/096327113X13581561725194.
Fournier, V. (2008). “Escaping from the economy: the politics of degrowth,” International Journal of Sociology and Social Policy. Retrieved from: https://www.emerald.com/insight/content/doi/10.1108/01443330810915233/full/html.
Kallis, G., Paulson, S., D’Alisa, G. & Demaria, F. (2004). The Case For Degrowth. Routledge: London. Viewed on: https://degrowth.org/book/
Reichel, A. (2016). “Postgrowth and degrowth,” Sustainability and Postgrowth Research. Retrieved from: https://www.andrereichel.de/2016/03/11/postgrowth-and-degrowth/#:~:text=Degrowth%20is%20also%20explicitly%20focusing,human%20life%20or%20all%20life.
[xxv] Flemming, D. (2016). Surviving the Future: Culture, Carnival and Capital in the Aftermath of the Market Economy. Chelsea Green: London.
[xxvi] Huxley, J. “What is solidarity? Climate justice in the ruins of empire,” St Ethelburga’s Centre for Peace and Reconciliation. Retrieved from: https://stethelburgas.org/what-is-solidarity-climate-justice-in-the-ruins-of-empire/.