When humanity determines economics, rather than the other way around
Politics and the art of living together
Ours is a world where:
- some people use toilets that flushby waving your hand in front of them while almost a billion people have to defecate in the open air.
- an investor was prepared topay over $450 million for a single painting while 1 billion people do not have access to electricity.
- Rolls Royce imagines driverless cars withsilk ‘thrones’, while a billion people have no access to an all-weather road.
- Dividing global food production by population andyou get 2,870 kcal per day each – enough to feed everyone with room to spare, but one in nine is undernourished.
Fixing these inequalities will need a better story of shared prosperity, a shared prosperity that is a matter of politics in the sense of how Aristotle described it – the art of living together. This better story is the focus of our new book, The Economics of Arrival: Ideas for a Grown-Up Economy.
The inequalities are a product of an economic system that is underpinned by a legitimizing story. It’s a story that pervades much of the public imaginary, telling us that things must be this way, that we are all better off when the rich do well. It informs the articles of faith held by politicians in capital cities around the world, the policy advice offered to so-called ‘developing countries’ by international agencies, and the metrics that so often rank the success of a country and thus the prowess of its leaders.
The art of living together, has, in the past, seen monetary wealth used thoughtfully to deliver unprecedented economic and social progress. From the economic crash of 1929 to the 1970s, the industrialised world enjoyed a sustained period of economic equalisation as the gap between rich and poor declined, even through the tragedies of the Great Depression and the Second World War. Union rights expanded, and gender inequality fell as women stepped into new roles in society and the economy. Workers enjoyed a higher share of the global economic pie via increased labour share. Education raised skill levels, boosting job quality and remuneration (and raising wages for low skilled workers as their labour became more valuable). The tax system became more progressive, and a lot of the revenue was spent on social welfare. Many people in many places are richer and better educated than ever before and can look forward to longer lives in a fairer and more tolerant world.
However, many aspects are now threatened by climate change, inequality, extremist politics, and environmental degradation. Having achieved so much, the next generation may see achievements begin to slip away. Others, who can only dream of the living standards of the rich world, find themselves shut out as competition for resources and the consequences of climate change erode economic gains as fast as development can proceed. The story of progress as economic growth is faltering.
The possibility of Arrival
If humanity is to ensure it can live together into the future, it needs to embrace a new story found in the twin concepts of ‘Arrival’ and ‘making ourselves at home’.
Arrival is a recognition that economies do not need to grow forever and ever; that there comes a time when enough wealth and resources have been accumulated, albeit if still far from being shared sufficiently.
After Arrival the benefits of growth start to tail off and turn negative. Pursuit of more and more risks causing harm and damage to people and planet and requires yet more resources to fix. This is called ‘failure demand’ in social policy terms. It also speaks to the notion of defensive expenditures used in ecological economies and underpins the concept of uneconomic growth in respect to the economy writ large.
A new story is due – one about making ourselves at home.
Making ourselves at home
Describing what “making ourselves at home” entails is, in fact, a matter of listening.
There are clear commonalities from different corners of scholarship, religious texts, and more popular songs than one could mention. The answer is also innately within us as human beings. Whenever people are given time and space to reflect about what matters most to them, they point to things that are rarely connected to mountains of money.
A suite of evidence tells us that people are not happiest when they are consuming, but when spending time socialising and engaged in meaningful activity. Not when working longer hours to make more money, but when they are in nature, learning, and undertaking fulfilling activities. This is revealed in emerging research in neuroscience, epidemiology, and psychology. Neuroscience, for example, tells us that cooperative behaviour activates the reward areas of the brain, which suggests that human beings are ‘hard-wired’ to enjoy helping others, cooperating, and being kind. In fact, life expectancy; voice; government accountability; climate and natural capital are more important than GDP per capita in predicting mean levels of life satisfaction in 79 countries.
An economy that has Arrived, and is focused on making itself at home, will be one that enables people to build good, healthy lives. Using resources in a smarter, fairer way (rather than wasting or hoarding them) means getting things right for people in the first place, rather than having to constantly repair the damage created by an economy set on growth at all costs. It will not harm people and the environment, and so will avoid having to deliver expensive down-stream intervention to fix the damage caused by the growth-ist economic model.
By: Katherine Trebeck and Jeremy Williams, authors of The Economics of Arrival: Ideas for a Grown-Up Economy. Katherine is also an At-Large SDG Transformations Forum Councillor.