3 May 2010
Let's just imagine, for one moment, that we do not understand how international finance works, that we accept the notion that we have no control over our money supply, that we are victims of the depradations of global currency speculators. And then let's take an even more frightening step and imagine that we might be an economic strategist for one of the mainstream political parties. What on earth would we do about the economy? What would we have to say to the Chancellor once behind the closed doors of No. 11?
I have two suggestions about how we might tackle the debt problem within a conventional economic framework. I believe both could make the bitter pill easier to swallow, because they treat people like grown-ups and because they are based on an understanding of justice as fairness that has been singularly lacking from our politics since 1979.
While growth-addicted politicians have been luring the UK's citizens into debt-fuelled consumption for decades, the evidence is that this has not greatly enhanced our well-being. The gadgets and air flights have led to dislocation and the breakdown of the relationships that really guarantee our well-being. Citizens might be prepared to accept less money and less stuff on one vital condition: that they believed the inequality that has accompanied the expansion of our economy for the past 30 years were to be reversed.
At the global scale, we call for a Contraction and Convergence - reducing energy consumption to a level that the planet can survive, and sharing this equally between all the world's people. At a national level I would suggest a similar approach to tackling the debt. If there must be public-sector pay restraint, then the lowest paid should still see increases, with the cuts coming to the best paid. This would address the deficit while simultaneously reversing the inequality that is so pernicious to social health. For the private sector, a maximum wage differential and considerably more progressive tax system could effect a similar convergence of incomes.
Just as we argue for the global contraction and convergence as a way of enabling our economy to fit within planetary limits, so we could consider the need to reduce the need to reduce government spending as part of a policy of a managed reduction in economy activity. As argued by the degrowth movement, this help us to 'put the economy in its place'. Over the next decade we could take what Marshall Sahlins eloquently calls the 'Zen road to affluence', valuing our selves, each other and the beautiful world we share, rather than burning oil and cash to provide ourselves with more stuff.
Whether we have a government of national unity or a weak government of one or two parties on May 7th the task facing whoever moves into No. 11 will be the same: reassessing what a successful economy is and moving away from the growth-and-consumption beano, fuelled by debt, that has been the hallmark of UK plc since Big Bang in 1986. If enacted with justice and in order to rebalance our relationship with nature this could offer a great opportunity. Tweet