An Economic Depression or a Better World?

If leaders are imaginative and bold enough there need not be a crippling economic depression as we pass through the Covid-19 pandemic . . .

I’m sharing a brief economic section that didn’t go into the last piece I wrote on initiation, ‘Ivan’s Choice’. This is the left-brain aspect of what I was addressing. It’s not intended to detract from the initiation message of going within ourselves in order to address the root cause of our imbalance. Rather, it’s aimed at holding space for that process, to relieve the type of anxiety that can hold us at the surface, by showing a few of the many great things that can grow from the systemic breaking open that is taking place.

The below points are the boiled down essence of more detailed notes. They are intended to provoke thought rather than be all-encompassing. The ideas are largely drawn from, or inspired by, Mike Berners-Lee’s recently published book No Planet B. Professor and business consultant, he has done the math and objective systems-thinking behind a shift to a healthier, genuinely sustainable world, addressing diet, transport and travel, energy use, work, growth and values. It’s an awesomely wise and practical book. He has done us a huge service. We would do well to read it then live its common sense message.


An Economic Depression or a Better World?

If leaders are imaginative and bold enough there need not be a crippling economic depression as we pass through the Covid-19 pandemic. Firstly, a citizen’s wage, which is becoming an increasing possibility in various countries including the UK, would not only take the sting out of job losses, but freed up time and energy would be a huge boon to creativity and overall health longer term. The idea is that it would replace an abused system of income support, and unemployment benefit that creates a poverty trap.

Secondly, we can change the metrics we follow and so redefine the state of the economy. Stock markets and GDP are poor barometers of a country’s health. Money meanwhile, though useful, is just a tool of exchange. The real currency and wealth is energy, human energy included. What if we created a new economic index based primarily on quality of life rather than the quantity of trade? It would include only those enterprises that added to human wellbeing and the health of the natural world, for whom the profit motive was secondary. It could also include a portion of the unaccounted for £1.2 trillion pounds worth of voluntary work that happens each year in the UK, which is greater than the entire UK economy excluding the financial sector [Source: ONS]. At the same time as celebrating a sustained rise in this new index, we could genuinely celebrate a sustained decline in GDP, rejigged to contain only the destructive industries that need to be phased out, perhaps by 2040 or even earlier. This would incentivise existing businesses to serve quality over quantity. A destructive economy rooted in fear could rapidly transition to a healthy one rooted in trust.

Instead of world governments repeating the mistakes they made after the downturn in 2007-2009 by bailing out businesses that are damaging the world and human health, they could instead direct money towards the enterprises making up the new index, creating new jobs. Having seen the huge measures taken in a short space of time to counter Covid-19, we now know that the same response is possible to address the fundamental flaws in our system. In his book No Planet B, Mike Berners-Lee states that our global challenges require a clever mix of global governance and the self-adjusting, dynamic nature of free-markets, which on their own are not capable of making decisions such as leaving carbon in the ground. The hybrid between the two needs to operate within a framework of values that serve both humanity and nature.

In addition to a citizen’s wage smoothing the process of transition, another key measure is implementing a carbon tax taken at source. This would create true pricing of products throughout the supply chain and help keep the majority of carbon in the ground, restore local economies and jobs and create a huge global fund to support the move to sustainability worldwide, helping those countries, regions and businesses that genuinely needed it. Mike Berners-Lee calculates that a carbon tax of $300 / tonne, equivalent to about $1 per litre of petrol sold, would create a fund of $10 trillion each year. If this tax level is not enough to keep carbon in the ground then it will need to rise to a level that is enough. It is important to recognise that a carbon-fuelled economy is a false economy.

He also points out that, done well, higher progressive tax is desirable for everyone, including the 1% of the world’s population who hold about half of the world’s wealth. It would create a better society where fewer people went to desperate measures to do useless or harmful activities just to get money. There would be less people doing jobs that do not need doing. This could take place alongside a revolution in values where wholehearted giving is the true measure of someone’s social standing, not hoarding.

“The decision to be wealthy can be seen as a decision to take responsibility for a greater part of wellbeing of people and the planet – not high profile philanthropy around the edges, but committed and thoughtful attempts to direct ‘all’ investment and spending in positive ways.” Not, for example, on vanity projects in space that clutter the skies.

Mark Carney, Governor of the Bank of England 2013-2020, recently commented in the Economist (18-04-2020) that Amazon is one of the world’s most valuable companies, while the Amazon rainforest appears on no ledger until it is stripped of its foliage and converted to farmland. The price of everything becomes the value of everything. The crisis caused by the pandemic could help reverse that relationship so that public values help shape private value. We need to act as an interdependent community, not independent individuals.

Climate experts Christina Figueres and Tom Rivett-Carnac recently remarked on a podcast that we have just ten years to take action before environmental change spirals beyond our control – just enough time. They added that although we tend to overestimate what we can achieve in one year, we underestimate what can be achieved in ten.

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