Capitalism is built on economic growth. French economist Thomas Piketty said: “Capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies should be based”.
Inequality then erodes the social capital built on community connections, trust and norms. Social capital underpins the collective action necessary to demand, enact and enforce a more distributive and regenerative economy. This is how we go to where we are.
We can appreciate why perpetual growth is the stuff of fairy tales by going through this thought experiment: Growth is compounded as each year grows on the previous. Using 2015 as our base year, and assuming a three per cent annual growth rate, by 2052 GDP would be three times larger, by 2100 it will be 12 times larger, and by 2200, 237 times larger.
I think even the most arithmetically challenged individual would agree that the Earth cannot possible sustain three times the human economic activity that we have today, let alone 12 times or 237 times.
A blueprint for the economy of the future should be based on the following principles:
• Growth should give way to balance;
• Networks should be given more importance than hierarchal structures;
• Relationships between households, commerce, commons (biosphere) and State should be ones of mutual interest, not self-interest;
• The human person should be seen as an interdependent person, and no longer as a self-contained unit of desire;
• A human being should no longer be perceived as an economic person who seeks 100 per cent precision, but a fallible person relying on instinct and knowledge;
• Governance structures should be based on a web rather than a pyramid concept;
• More power should be transferred from rulers to citizens;
• There should be lifelong education on how things really are and really work and not exploitation of the masses by encouraging ignorance of consequences;
• More importance should be given to social values of guilt, shame, community, accountability and responsibility to replace the commercial values of self-interest and price.
Ecological degradation is not an acceptable consequence of economic activity. Thinking that progress and innovation will eventually regenerate the degradation is a falsehood perpetrated by those who would exploit and destroy the natural world and establish dominance over the rest of humanity.
Ecological degradation is not an acceptable consequence of economic activity
The last 50 years has seen exponential growth in technological innovation and yet it has also been the worst period ever for environmental degradation in the history of mankind. In fact, not only does technology not bring forth regeneration of the biosphere, there is actually an inverse correlation between technological advancement and degradation of the biosphere.
The reason for this is that technology takes us further and further away from nature, thereby perpetrating the lie that we somehow exist independently of it. Regeneration of ecosystems has to be done by design and intent, not by sloppy wishful thinking. Economic growth based on the exploitation of natural resources is inherently degenerative, and that is all there is to it.
Economic growth is driven by ever increasing input of labour, capital and energy, and it is interesting to note that the use of fossil fuels replaces the work of hundreds of millions of people. One gallon of fuel translates to 47 man days of work. Fossil fuels are not only causing massive pollution but also huge job losses. It is easy to sell growth to people because growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable, or so the spin goes. Linking growth to hope is disingenuous. It is an emotional entrapment used to control and manipulate.
It is possible to reward entrepreneurs for their business risk and employees on merit in a world that is moving towards a circular economy and away from a degenerative industrial process to a regenerative one. The scope for innovation and opportunity for developing new products, skills and professions is enormous. Possibilities go way beyond the opportunities provided by renewable energy. Acting like nature through the process of bio-mimicry, we could also devise ways of putting back into nature more than we take out.
It is possible to finance the transition from a degenerative economy to a regenerative one. Firstly, the world’s wealth would eagerly flow towards the regenerative economy of the future in order to meet the demand.
Secondly, the days of large hierarchical governments with huge, wasteful budgets would be over, replaced by lean, mean governance structures that will meet all social needs and also be able to reduce tax levels on citizens.
Thirdly, we are all well aware that central banks do not have any qualms about printing money (Quantitative Easing) to finance wasteful and dishonest governments. Rather than the latter travesty of monetary policy, central banks should implement Peoples Quantitative Easing to finance social causes, and Green Quantitative Easing to finance regeneration of the biosphere.
In other words, investors, the State and the markets would certainly find ways to finance the transformation of human activity, bringing us all into that ‘safe and just place’ for humanity that lies between social foundation, providing wellbeing for all and the ecological ceiling, which is the point at which we are net contributors to the natural world and as regenerative as nature itself.
I believe that our adversaries in this task are the political elites of this world and their bedfellows – the business lobbies who have a vested, albeit myopic, interest in the status quo. It is most unlikely that they will agree to be unseated without a fight. They will call these proposals utopian and impossible to achieve. We will be told that moving away from capitalist ideals will create massive unemployment and a worldwide recession. Indeed.
Pulitzer prize writer Upton Sinclair could not have put it better when, with the OECD, EU, World Bank, IMF and almost every political party in the world in mind, he said: “It is difficult to get a man to understand something when his salary depends on his not understanding it.”
David Marinelli is a researcher on human ecology and sustainability.
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