12 December 2006

Green Economics: Expanding the Circle of Influence

The glib phrase ‘economics for people and planet’ is one that green economists frequently use to describe how what they propose for the world’s economy is different. It is really shorthand for expressing a need to move beyond the narrow view of the economy as it is currently organised. So many perspectives are never considered by a system of economics that privileges white, wealthy, western men (see the extraordinary picture of the Bretton Woods conference). The way the global economy is organised can be seen as an extension of a colonial system whereby the resources and people of most of the planet are harnessed to improve the living standards of the minority of people who live in the privileged West. On the one hand, the rights of people living in the global South to an equal share in the planet’s resources should be respected. On the other, their approach to economics, especially that of indigenous societies which have managed to survive within their environments for thousands of years, has much to recommend it and much we may learn from. While we do not glorify low living standards we do see the value in learning from the South.

Even within western societies there are gross inequalities between people. The system of patriarchy has ensured that the majority of resources are controlled by men. Most of the world’s poor are women. The male dominance of the economy has resulted in a situation where women form 70 per cent of the world’s poor and own only 1% of the world’s assets (Amnesty International). According to UNFPA (2005), on a global basis women earn only 50% of what mean earn. And in spite of equal pay legislation in the UK and US the pay gap between the genders persists. Green economics also extends the circle of concern beyond our single species to consider the whole system of planet earth with all its complex ecology and its diverse species. As an illustration of the narrowness of the current approach to policy-making we can use the thought experiment of the Parliament of All Beings (see earlier post).

Policy-makers are happy to use the word ‘exploit’ when talking about resources such as oil or minerals. Yet for green economists exploitation of the planet’s resources is as unacceptable as exploitation of the people who live on the planet. The failure to respect the planet has led to problems as diverse as climate change and desertification. In order to address these problems green economists suggest that we need a completely different attitude towards meeting our needs that involves respecting ecology and living in balance with the planet.

Another short phrase that encapsulates something important about green economics is ‘beyond supply and demand to meeting people’s needs’. This contains an explicit criticism of the discipline of economics with its obsession with graphs and mathematics and its inability to look out of the window and see what is really happening in the world. Green economics begins with people and their concerns rather than with theories or mathematical constructions of reality. Conventional economics will provide a graph with two straight lines representing ‘supply’ and ‘demand’ and then apply this to the complex relationships which are entailed by the production and exchange of goods. Green economics calls for a richer and deeper understanding of people, their relationships, and how they behave and are motivated. The ‘needs’ we are concerned about are not merely physical needs but also psychological and spiritual needs.

The word ‘holism’ sums up the way in which we have to learn to see the big picture when making economic decisions. The absence of holistic thinking is clear in modern policy-making, where crime is punished by incarceration without attempting to understand how an economic system which dangles tempting baubles in front of those who cannot afford them and deprives them of the means of meeting their deeper needs is simply generating this crime. A similar comment can be made in the case of health, where pollution creates ill health which is then cured by producing pharmaceuticals the production of which simply generates more pollution. From a green perspective we need to see the whole picture before we can solve any of these problems.

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