speri.comment: the political economy blog

‘Civic capitalism’: the need for sustainability

We need to work collectively and globally to shift the accepted currency of economic success away from its sole reliance on the convention of growth

Professors Colin Hay & Tony Payne, Directors of SPERI

Colin Hay and Tony Payne

Colin Hay and Tony Payne

As we have sought to show, the civic capitalism we advocate is very different from the capitalism we are used to.  One of the biggest differences and one of the greatest challenges is that our (still aspirational) civic capitalism needs to prove itself to be sustainable – economically, institutionally and environmentally.  The present crisis is a crisis of an unstable growth model and, at the same time, a more general crisis of the model of capitalism of which the former was an expression.  But, even in the absence of the crisis, Anglo-liberal capitalism (like most capitalisms) was, as it remains, environmentally unsustainable.  The crisis perhaps makes it easier to see what was already the case – namely, the need for us to find a more genuinely sustainable model of capitalism and associated societal development.  But the condition long predates the crisis.  None of these challenges is easy; but that of ensuring environmental sustainability is undoubtedly the hardest.

Yet there are a number of things than can – and perhaps must – be said on this critical issue.  First, there is a need for a certain modesty and humility in the face of the challenge and the choice we face.  The brutal point is that we have done nothing – or nothing very significant – for far, far too long.  Whether we failed to try hard enough or tried hard and failed is a moot point, but is also now largely academic.  We simply cannot afford not to try harder now.  And that means a grim realism with respect to our plight, combined with a sense of the magnitude of our inter-generational responsibility.  In a way the crisis might prepare us well for that.  But, in another sense, this is obviously not a good time to turn our attention to the environmental crisis – and the problem of growth itself.  The hard truth is that it is clearly more difficult to make the case for less growth, or an alternative to growth as the global metric of economic performance, at precisely the moment when growth appears so hard to achieve in our own economies.  But that is precisely what we need to do – internationally and successfully.

A second point is that we can no longer afford the indulgence and evasion of climate change denial.  Whether malevolent and duplicitous or more simply a product of ignorance or wishful thinking, it can no longer be tolerated.  If we think in terms of the planet’s ‘carrying capacity’, then the evidence is unequivocal – and unequivocally dreadful.  To think in such terms is to start to gauge current planetary resource use in terms of the safe operating space for humanity with respect to the earth’s biophysical subsystems.  And what is startlingly clear is that, when we start to counter-pose current figures on environmental degradation with expert ‘best approximations’ of the planet’s carrying capacity (the point beyond which we simply cannot go without threatening human life, certainly as we know it, on earth), we find again and again that we have already reached the tipping point.  The results are summarised in the table below for a small sub-set of the planetary carrying capacities we might consider.

Earth system processes

Parameter Boundary Current level
Climate change Atmospheric CO2 (ppm) 350 >400
Biodiversity loss Extinction rate (no. of species per million per year) 10 >100
Nitrogen cycle Amount of nitrogen removed from the atmosphere for human use (million tonnes per year) 35 >120
Freshwater use Human consumption of freshwater (km3 per year) 4000 c. 3000
Ocean acidification Global mean saturation state of aragonite in surface sea water 2.75 2.9
Landmass usage Per cent of global landmass used for crops 15 c. 12

 Source: Adapted and updated from Rockstrom

Data like this show that we are already in the red zone (where we exceed planetary carrying capacity) with respect to a number of earth-system processes and are moving rapidly into the red zone in a number of the others.  Of that much we can be sure.  And such data are merely reinforced if we change perspective somewhat and look not at the planet’s carrying capacity but our own ecological footprint.  This measures, in effect, the land and sea mass necessary to support the resources a human population (such as a nation) consumes and to absorb the waste it produces.  The most recent figures from the WWF’s Living Planet Report show that the world average ecological footprint (2.7 global hectares per person) exceeds available land and sea mass (2.1 global hectares per person) by over 30 per cent.  The figures for the UK and the US are, respectively, 4.7 and 7.2 global hectares per person; that for Haiti, by stark comparison, is a mere 0.6.

A third point – and one that has a certain irony in the context of our wider argument – is that things would actually be worse still but for the global financial crisis.  It is not often that one can say that; but, with respect to the environment, it is true.  The crisis has arguably done more to reduce the pace (or at least slow the acceleration) of the process of global environmental degradation than anything directly intended to have such an effect.  And that is because it has served to reduced aggregate global growth rates.

Yet we need to proceed with some caution here.  For one’s enemies’ enemies do not always make good friends – and we can have environmentally unsustainable non-growth just as much as we can have environmentally unsustainable growth.  Indeed, the story of the crisis is a story of the move from the latter to the former …. and perhaps back again.  What such reflections remind us is how crucial the question of growth is to our capacity to respond to the challenge of the environmental crisis.  Almost certainly, we will need to come to think of growth in rather different terms if we are to do anything at all to take us out of the red zone (and the time-lag effects, it need scarcely be pointed out, are very considerable indeed).

So how might we do this?  For there are undoubtedly things we can do and we need to do them urgently – thinking, while we do so, of our duty of care to future generations.  One of these is, on the face of it, deceptively simple (though one should not underestimate the political difficulties of what we here propose).  It is that we should work collectively and globally to change the accepted currency of economic success, replacing the convention of growth (for that is all it is) with something else, albeit something more complicated.  In this process we need to devise a more balanced and sustainable array of genuinely global (indeed, planetary) collective public goods whose promotion might eventually replace the blind and narrow pursuit of economic output as the global currency of economic success.

The point here is that it is not difficult to imagine what might be entailed in such an exercise.  Alongside GDP data, we would need to build a new index of economic success – a compound index, inevitably, which might include things like changes in the Gini coefficient (in the direction of greater societal equality), changes in per capita energy use (rewarding increased energy efficiency and sustainability), changes in per capita carbon emissions and other planetary boundary statistics (rewarding the greening of residual growth) and perhaps a range of more basic development indices (changes in literacy rates and so forth).  This alternative Social, Environmental and Developmental (SED) index would be recorded and published alongside GDP and would thus allow the production of a new hybrid GDP-SED index.  Over a globally agreed timescale, the proportion of SED relative to GDP in the hybrid index would rise – from zero (now) to close to 100 per cent (at some agreed point in the future).  And, of course, we would gauge whether our economies were ‘growing’, ‘flat-lining’ or ‘in recession’ according to the new hybrid index as, in effect, we moved from measuring economic performance in terms of GDP to measuring it in terms of SED.

The changes to our modes of living, over that period of time, would be immense – and would need to be immense.  And they would be accompanied by a new set of roles for a new set of international institutions.  In the process, structural adjustment would be decisively recast – no longer the mantra of neoliberal labour-market reform and privatisation but, instead, the reorientation of economies to promote sustainability according to the SED index.  This may seem like a long way off – and it is.  But, if we are even to begin to rectify our planetary imbalance, it is imperative – a necessary, but of course far from sufficient, condition of exiting the red zone.

But – and here we come to a crucial point – is the implication of this that we should abandon the search for growth today?  Our answer is ‘no’: in fact, quite the contrary.  What is required is a massive public investment in sustainable technologies and new public infrastructure (in transport as much as anything else).  This can and will bring growth.  But, far more importantly, it will create the resources that might allow us to make the transition to a more sustainable conception of societal and economic development and, in so doing, to build a capitalism better able to meet the long-term needs and ambitions of the citizens it must be made to serve.

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