Imagining The 21st Century Economy

The global economy has been in ecological overshoot since 1970 and our ecological footprint is now 1.7 times Earth’s capacity to regenerate. So here we are, in 2022, needing a much smaller global economy, yet all our financial, business and political systems are focused on growth. Decision makers assert that a growing economy stabilises society and insist that future growth can be decoupled from environmental impact. This green growth hypothesis urges us to carry on increasing production and promises technologies within just a few decades that will drawdown and capture billions of tonnes of carbon to achieve net zero emissions. Almost all countries, the United Nations, the IMF, the World Bank, the climate and biodiversity COPs and the big NGOs are on board.

But we can’t let this be humanity’s only economic plan for the 21st century, for there’s nothing riskier than what it proposes. With every GHG-emitting activity today – every production plant, military incursion, construction project, land conversion, logistics chain and rubbish dump – we’re gambling human futures on speculative technologies. The green growth story does not extend beyond the drawdown promise. There isn’t anything in it about decoupling from nature loss or tackling North / South inequality, and it doesn’t explain what life will be like for future generations burdened with sucking carbon out of the sky on an industrial scale in perpetuity as nature dies off. There are no green growth visionaries, only green growth sellers.

Degrowth is a rising idea for a different economy that’s moving rapidly from the papers of heterodox economists to the webpages of mainstream media. Degrowth starts from the empirical truth that economic activity depletes the environment and must be reduced to within Earth’s regenerative capacity, equivalent to circa 1970 levels of activity, not so long ago. Yet, we must also provide for people’s needs, everywhere – as many as 10 billion people by 2050, 25% more than today. Theoretically, we can design a way to live well, work meaningfully and socialise convivially, with plenty of time and spaces for sport and leisure, and plan a bold systemic and structural transformation to get there.

Degrowth is still highly conceptual but is coming into focus as more people bring ideas and expertise. It would be a paradigm shift, needing a severe jolt to kick off. Leading thinker Jason Hickel suggests getting off to a flying start with a globally binding agreement to cap fossil fuel use on a sliding scale over a set period. How much, how fast? To virtually zero by 2030 in the Global North and then by 2050 in the Global South, giving those nations time to build systems to deliver on people’s needs for nutrition, sanitation, shelter, energy, education and information networks. A debt jubilee would help.

What could this mean for New Zealanders? Business production would be demand-led, producing goods and services that are needed. Good design would be vital for efficiency, durability, repairability and desirability. Things people don’t need, that the affluent buy today with their spare cash, would no longer be produced. Vintage luxury goods could be in high demand! Business ownership would shift from shareholders to cooperative owners. Businesses would become aware of local ecological thresholds and would work with other local businesses to ensure sum operations fit biocapacity. Salary differentials would diminish. Paid hours would drop and job sharing would be encouraged, with free hours given to time with loved ones, community projects and leisure. Personal incomes would be bolstered by universal basic income and personal expenditures reduced through access to universal public services, including education, healthcare, housing, internet, water, energy and public transport. No-one would be out of work because there would be a job guarantee scheme, such as in the arts or on infrastructure projects to fulfil the provision of universal services. Funding would come from a wealth tax and through government issued currency. The ability of commercial banks to issue interest-bearing debt beyond reserves would be curtailed. Most people would bank with a credit cooperative. Imported commodities would be on fair trade terms, but plant-based locavorism would be the primary dietary ethos. Communities would make efficient use of resources and share abundances, such as garden, park and street tree harvests with communal kitchens preparing home-made meals to ensure that every local family is able to put a nutritious meal on the home table or eat at a communal table.

This imagined future is other-worldly to those of us conditioned to individualism. It’s tempting to stick with what we know, but how much longer can that last? Society has a big decision to make. Are we prepared to risk the security of future generations so that we can carry on as normal for another decade, with no real vision? Or do we embrace a bold opportunity to devise a new economy? Are we a risk-taking generation with a low imagination, or a risk-mitigating generation with a big imagination?

This essay was contributed to the Kiwi Diary 2023

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