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Can sustainable prosperity

ideas lift economics out of the

market vs. state trap?
Dr Julia Steinberger (*)
Associate Professor in Ecological Economics
Living Well Within Limits (LiLi) Project
Sustainability Research Institute, University of Leeds
(*) With guest appearances from Peppa & Dora

CUSP Summer School, Cumberland Lodge Windsor, Sept 15-17 2017.

A (new?) research conundrum
Why this talk?
• My background is in hard
– experimental/observational physics.
• Not a social scientist, but
interested in history and political
• News (to me!): ideas matter more
than measurement.
– How facts (environmental & social
problems) are viewed is decisive in
how they are dealt with.
• Obvious that economics plays a
big role in history and politics, but
far from clear in which direction.
1. The inspiration: key books
2. The problem: the market-state pendulum, and
the end of economic philosophy
3. The fallacies: False dichotomies and false
4. The debunking: some specific examples of
market-state fallacies
5. The exploring: ways forward in sustainable
Where do sustainable prosperity
ideas fit in?
• Principled (moral compass)
• Priorities (social & environmental)
• Integrated/interdisciplinary (political, social,
economic, environmental aspects linked)
• Maybe most important: aware & critical of
other people’s framing, including of
sustainability, sustainable development, green
growth, green economy…
Sustainable Prosperity as Dora the Explorer


(& other
Dora The Explorer as the prototype for the
sustainable prosperity researcher?
Not the usual profile:
• Young
• Female
• Non-white
• Non-native English speaker
• Dresses informally

• Friendly (collaborative)
• Helpful, kind
• Educational
• Open-minded
Sustainable &
Dora’s map? prosperous future
as a goal

Multiple obstacles
1. Academia
2. Real world
3. Powerful forces
aligned against

Requires a moral compass for orientation.

Priorities, values, goal, moral compass

• Goal: long term (compatible

with planetary limits) human

• Need to understand human

societies, what activities and
things contribute to well-
being (LiLi project).
Priorities, ideas, and climate change mitigation

Lamb & Steinberger, 2017

[Moral principles matters: Fighting fascism interlude]
Arguing against relatives of utilitarianism (a relative of market
fundamentalism) in political resistance.

“In the utilitarian perspective, right and wrong is determined by what causes the most
pleasure. What will get you the most cookies. Even if it’s bad in the long run. If it feels good,
do it. …. When you depend on the output of the machine, whether lying or telling the
truth, you are no longer acting as an independent moral actor. In other words, in the post-
truth world, we need to make our own choices based on our conscience and the categorical
Chelsea Manning, January 23 2017

“The difficulty stems from the realist tradition in politics. … Realism is predicated on
predictability: it assumes that parties have clear interests and will act rationally to achieve
them. … We cannot know what political strategy, if any, can be effective in containing,
rather than abetting, the threat that a Trump administration now poses to some of our
most fundamental democratic principles. But we can know what is right. … Armed with that
knowledge, or burdened with that legacy, we have a slight chance of making better choices.
As Trump torpedoes into the presidency, we need to shift from realist to moral reasoning.”
Masha Gessen, November 27 2016
Bag of tricks for Jacks (& Jills) of all trades
Diverse ways of
communicating &

Diverse tools
= methods Diverse ways of seeing the
world = conceptual
frameworks, disciplines
Dora’s friends:
Building a research and real-world
community of like-minded creatures
Back to your regularly scheduled programme

Inspiration: understanding history
Role of economics & politics
Human development
Ideas for changing the world
Conclusion of the Worldly Philosophers
“Why has economics lost interest in the idea of a
worldly philosophy? It is certainly not for a lack of
immense economic problems …

The problem is that the resolution of these issues … will

not be resolved by economic forces alone. …Political
decisions will set the stage for what the economy does.

If these decisions incline in favor of giving the market

its way, we will have one kind of scenario. If the
political pendulum swings again towards the general
guidance of economic affairs by the state, we will have a
different kind.”

Robert Heilbroner (1986)

View of great economic
pendulum swing

Overbearing “Free” market

state control excesses

£ £
£ £
False dichotomies and false associations
constrain our thinking
Get trapped in “the muddy ditch of well-trodden debates”

– Both sides are thoroughly known caricatures;

– Reality and specificities are ignored, mischaracterised or misinterpreted;
– Participating in the debate feels like mud-wrestling: it’s dirty & futile;
– In academic terms, end up in rounds of fights with reviewers, editors, having to write
lengthy articles in obscure journals to make even the most basic points.

Goal of this presentation is to help you recognise and avoid some of these ditches
(especially the market-state one).
Scientific problem of false dichotomies/associations
Description of issues and factors are done
in terms of the dichotomy, leading to both
Understanding of the problem oversimplification and misleading
definitions of issues, wrong system
Asking research questions constrained by
Asking research questions the dichotomy, on its terms.
Conventional (for instance econometric)
methods and metrics are preferred, even if
Choosing methods they are often incapable of capturing
phenomena outside the “dichotomy”
Results are presented not in terms of
empirical outcomes, but in terms of the
Interpreting results dichotomy debate.

Present policy guidance in the terms of

Policy guidance existing debates, or be reduced to “fringe.”
Science historian “view from the

 Scientific positivism: facts are

either shown to 3 sigma or
considered unproven, hence not
worthy of action.
 Market fundamentalism: socially
optimal state as outcome of
market equilibrium. Decisions
seen thru cost-benefit lens. Govt
intervention is major evil.
Market vs. State: swipe right or left?
State Market
Slow Quick
Opaque, burdensome Agile, responsive
Meddling in market outcomes Equilibrium
Central planning Individual selfishness
Perverse incentives of welfare state Social optimum
Suppression of individual freedom Economic freedom
Swayed by politics Apolitical
Monopoly, cartels Multiple actors, diverse
Inefficient, uncompetitive Competitive
Winners predetermined Meritocracy: the best product wins
Unfair, rigged Fair, egalitarian
Inefficient, expensive Lower prices for consumers
Rigid, fixed, regulations Creative, innovative, entrepreneurial
Fossilises Evolves
Given lack of choice…
we choose the market
“The climate crisis has such bad timing,
confronting it not only requires a new
economy but a new way of thinking”
- Naomi Klein, The Nation, 2014

Idea of “End of History”: TINA: There Is

No Alternative. We are trapped forever
(“lock-in”) the capitalist ditch, looking
for market solutions to existential
threats to our species.

Alternative economics passes by

alternative politics. Survey of alternative
political movements, in conflict with
power both private and public.
Homo economicus,
the atlas of market fundamentalism
Characteristics of “market man” added
over different times, for different
reasons (theoretical or ideological
rather than factual).

Dangerous drift from strong axiom, to

conflation with reality, to aspirational

Almost each characteristic can be

factually shown to be incomplete or just

Need to go beyond criticism of

• Aimed at entire edifice that homo
economicus is designed to prop up
• Proposing radical and factual
False conflation of ideas
(or: to search for new ideas, investigate the history of old ones)

1. “Socialism requires centrally planned state

– Paul Auerbach: history of ideas shows that
central planning, both private and public, was in
vogue in early 1900s: socialism adopted those
ideas, but they are not fundamental so socialism.
False conflation.
– Non-state-controlled and non-centrally-planned
socialist alternatives can be imagined (hence the

2. “Innovation arises from competitive private

market environment.”
– Much important innovation arises from publicly
funded research and initiatives (biomedical &
pharmaceutical sector especially egregious).
– Profits, including proprietary, are private.
– Innovation often stalled & prevented by powerful
private firms.
“The welfare state is inefficient.”
The case of California
“The welfare state is inefficient.”
The case of tax cuts in Kansas
Why so many fundamentally wrong ideas
circulating as irrefutable facts?
Not a neutral or accidental mistake: serves a
greater purpose
Removing economics from political, historical
and regulatory scrutiny benefits specific
segments (classes!) of population: capitalists.
Ideas for changing the world
Dana Meadows: how to change a system

Meadows, D. (1999). Leverage points: places to intervene in a system. Places to Intervene

in a System.. Hartland, Vermont, USA: The Sustainability Institute.
Ostrom’s ideas:
breaking out of state vs. market

• Meso-level between
state and individual
• Collective reflection,
action, design are