Even the World Economic Forum agrees that our economic system is broken.
On 26 September 2012, Christine Milne, the leader of The Australian Greens political party stepped out ahead of the flock. With a rousing speech she critiqued the current economic system, the growth paradigm, and spoke out about the challenges that Australia, and the world is facing. Here is an excerpt from that speech, which can be found in full here.
How do we build an economic system that serves the needs of people and nature, both for today and for tomorrow?
That our economic system is broken and needs fixing is not just the view of the Greens. It is the view of the World Economic Forum, which in its report “More with Less: Scaling Sustainable Consumption and Resource Efficiency” of January this year said:
“Current trends clearly show that business as usual no longer works. Unless the present link between growth and the consumption of scarce resources is severed, our resource base, governance and policy structures are unlikely to sustain the standard of living societies have grown accustomed to or indeed aspire to. Action to decouple business and economic growth from resource intensity and environmental impact, has never been more critical to the long term success of business.”
Surely it’s time that those who advocate economic growth derived from resource extraction and pollution as the major path be the ones labelled “wacky”, “loopy”, irresponsible, divorced from reality or connected to the CIA.
And yet, millions of Australians feel uncertain about the future, uncomfortable, under pressure. There are many reasons for this. The two speed economy is frequently cited as is the GFC.
But I want to focus today on the underlying reason. Our much envied economy is on borrowed time.
The economy is a tool; a tool we humans invented — like democracy and politics — to help govern our relationships between each other, and between ourselves and the world we live in. If our economic tools are not getting the outcomes we want, making us happy, safe, healthy, better educated and fulfilled and protecting and preparing our country for an increasingly uncertain future in a world on track to be 4 degrees warming, then it is time our economic tools changed.
It’s clear that, whilst the economy is growing, our quality of life is stagnating, our environment is suffering, and we are failing as a country to invest seriously in the things that we value, the things we need now if we are to have a better future: a fair education system where you can get a good start in life regardless of how much money you have or where you live; a zero emissions energy network that doesn’t pollute the air and drive global warming; a health system which takes care of all of us, from the state of our teeth to our state of mind.
It is time to change, to diversify our economy, clean it up, and invest in a future that doesn’t rely on digging up, cutting down and shipping overseas.
The old parties are grounded in a belief that the economy is an end in itself, and that we have to ‘balance’ the need to care for people and the need to protect the environment against the needs of the economy.
When you think about this, it simply makes no sense. Tasmanians recognised that as early as 1972 and established the world’s first Green Party. The idea reached mainstream by 1987, when the Brundtland Report of the World Commission on Environment and Development, Our Common Future was published.
The Brundtland Report revealed that world leaders were able to think rationally and caringly about the present and the future. It’s probably most famous for articulating the concept of ecologically sustainable development as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs”.
One of the Brundtland Report’s most forgotten insights is that there are only two real things in the world: people and nature. The economy is not a physical thing; it is not something that exists in its own right. Rather it is a tool we invented for governing the relationship between people, and between people and nature.
When the Brundtland Report went to the World Bank, tragically, the insight that the economy is a tool for people and nature all of a sudden turned into a triangle where the three — people, nature and economy — were all real and equal. And we were plunged back into the old view of the world where nature lost every time, traded off against people’s short-term benefits and “the economy”.
Most of the battles of political philosophy over the last two centuries have been about competing views of how to run an economy. Where the old economic right, broadly speaking, has sought to create a ‘strong’ economy and the old left sought to create a ‘fair’ economy, neither has grappled with how an economy can be strong or fair when ecological limits are being reached: “without environment there is no economy”.
The Greens are calling on the Government to either work with us to find savings and revenue in a forward-thinking, caring manner.
So where does this lead us? Einstein said “You don’t solve problems with the same thinking that created them”.
To set us on our new path, a path to an economy which serves the needs of people and nature, both for today and for tomorrow:
- We will need new economic tools;
- We will need to learn to do more with less;
- We will need to re-prioritise our investments; and
- We will need sensible management of taxation and revenue to fund these investments.
It is a case of rethink, reduce, reuse and recycle.
For most of us going about our daily lives, the new, caring and ecologically sustainable society will look very similar in most ways to the old one. Yes, it will be powered entirely by clean, renewable energy — including electric cars, buses, trains and trams — and there will be more cycleways and better designed homes and offices.
But in most ways, it will look the same but perform better. Any job can be a green job, with a slight shift in focus.
What will be different is that we will have replaced the idea that Australia’s wealth is dependent on digging-it-up, cutting-it-down and shipping-it-overseas with the knowledge that our prosperity depends at a personal and collective level on our brains, on our health, on our creativity and on a healthy environment.
Of course, that challenges those who have gone unchallenged for generations, those at the heart of current power. For that reason, our vision is labelled unrealistic or whacky by people who cannot or will not imagine a world different from the one in which they are currently powerful or comfortably making a profit.
This isn’t surprising. I often quote Nicolo Machiavelli, who wrote 500 years ago that:
There is nothing more difficult to carry out nor more doubtful of success nor more dangerous to handle than to initiate a new order of things; for the reformer has enemies in all those who profit by the old order.
So how would the Greens recalibrate the economic tools? How would we make them enhance our natural, human, social, manufactured or financial capital?
John Stuart Mill wrote in 1848:
There would be as much room for improving the Art of Living, and much more likelihood of its being improved, when minds ceased to be engrossed by the art of getting on.
The Greens want to see everyone given the opportunity to “practice the Art of Living”, we want to see people lifted out of poverty and we know that unless this is done while protecting the environment which sustains us it can only last a very short time. That is what growth is supposed to achieve. The problem is, we measure it with the wrong tools; tools which tell us we’re growing when in fact we’re not.
If economic growth as it is currently measured isn’t actually making us happier, healthier, cleverer or safer then it isn’t real growth.
We have to limit our use of GDP to those purposes it is suited to and measure our true progress as a nation with different tools. The Greens will redouble our efforts to support development of the best possible economic tools and work to see them adopted across government and society so we can build and measure the well being of people and nature for the long term.
In short, the Greens do want to see growth, but growth in quality of life, growth in equality of society, and growth that plans for the long term. Of all things that are precious, time is paramount. We long to have more of it to improve our lives.
The Greens’ vision is becoming mainstream globally, with Australian politics and commentariat playing catch-up. The ideas I’ve set out today are all from established economic theory, based on the early 20th century work of Arthur Pigou and John Maynard Keynes as well as more recent Nobel Prize winners from Joseph Stiglitz to Paul Krugman to Amartya Sen They also encompass vital scientific work being done by the CSIRO and others that we either need to grapple with or be left behind.
We can make this vision a reality, but only if we recognise that the economy needs to serve the needs of people and nature, not the other way around.