Sustainable economies, sustainable

economics and sustainable

communities

JOHN BARRY

Email: j.barry@qub.ac.uk
 For Tweeters….

Me: @CllrJohnBarry

School of Politics: @HAPPatQUB

QPol : @QPolAtQueens

Also happy to email this presentation to anyone who

would like a copy …. Your taxes at work!
Today’s talk based on this book

And current book I’m working

on
What’s the story of
economic growth?: our
dominant social narrative
as ideology, myth, meme
and religious belief

Any better title ideas please let

me know! ;-)
 And some quotes…
‘She uses statistics like a drunk uses a lamp-post…for support rather than
illumination’

‘Economists are asked to comment in the media not because what they
say is true…but because they are asked’

‘Economics is extremely useful as a form of employment for economists’,

John Kenneth Galbraith

‘A national debt, if it is not excessive, will be to us a national blessing’

Alexander Hamilton

“The purpose of studying economics is not to acquire a set of

ready-made answers to economic questions, but to learn how
to avoid being deceived by economists.” Joan Robinson

Or ….knowledge is power…so arm yourself….

 Economics…defintion/s

Economy comes from the Ancient Greek οἰκονομία

from οἶκος (oikos, ‘house’) and νόμος (nomos, ‘custom’
or ‘law’), hence ‘rules of the house hold for good
management’.

Ecology (from Greek: οἶκος, ‘house’, or ‘environment’;

-λογία, ‘study of’) is the scientific analysis and study of
interactions among organisms and their environment.

We’ll come back to this connection later ….

 The ‘Economic Problem’

Economics – how to organise human life between infinite wants and

scarce means.

Lionel Robbins, “Economics is the science which studies human

behaviour as a relationship between ends and scarce means which have
alternative uses”

An Essay on the Nature and Significance of Economic Science (London:

 The centrality of scarcity to modern economics

Scarcity requires all societies to answer the following questions:

What is to be produced?

How is to be produced?

For whom will it be produced?

Who is to produce and consume?

How is what is produced to be distributed?

 Solutions to the ‘economic problem’ as scarcity

Note that the solution is ‘economic growth’ – not reduce

wants, yet this is always an option – wants are not beyond
changing … but more about economic growth later
 Models, paradigms and values

We can’t observe the economy from outside it

So we invent a framework to interpret what we do see
In other words, we create a model (or “paradigm”)
that lets us explain at least some of what we have seen

That lets us make predictions about the future

Once they have a model, economists then describe how the

model behaves—not how economic reality behaves
because can’t observe it directly

More of this later …..

 Assumptions in conventional economics –
The model of ‘the economy’

All monetary exchanges – production of commodities

and services, investments, currency exchanges,
purchasing/selling of property, wages, rents etc.
 What is the economy anyway?

Forget the quarterly GDP statistics, the financial pages,

and the daily updates we hear every day about stock
markets and foreign exchange. That’s not the
‘economy’.
The ‘economy’ is simply that four-letter word that we
curse on Monday mornings: W–O–R–K
The economy is the sum total of the work we must
perform to produce the goods and services we need to
survive and live.
Without work (broadly defined as ‘productive human
effort’), nothing happens in the economy.
Or this model…all productive work/activity
Or from current linear to a circular ecological economy
….
A sustainable economy –re-embedding economy within society and both
within the environment
Sustainability
 What is work/labour?

Any productive human activity – from making music to

making bombs.
The only thing that adds value to the materials we
harvest from nature.
Comes in many forms, many social arrangements.
Not just a means to an end, or a ‘necessary evil’
(‘Adams’ curse’ the Bible)…
Work can also be a source of meaning, gratification, and social
connection.
But interestingly enough….modern economics views it
exclusively as ‘disutility’ something unpleasant we
have to be paid to do
 Work and Employment

Employment is just one form of work.

 Work performed for someone else, under their direction, in
return for payment.

A defining feature of capitalism:

 Employment (or “wage labour”) constitutes most of the
work performed in the formal economy.

Most people are wage labourers:

 They must find and keep employment in order to support
themselves.
 Sustainable Economic Practices/Principles
Socialisation of consumption – ‘libraries, laundromats and
light-rail’
Democratisation of work – autonomy and power within
workplaces – alongside decent wages, conditions etc.
Decentralisation of energy – as part of a ‘just transition’ from
carbon to renewable energy
Relocalisation of economic activity where possible
Democratisation of state services via co-production,
participatory budgeting, citizens audits

From maximisation to sufficiency - enough

‘Enough and no waste is as good as a feast’

Democratisation of work: skills, autonomy and internal values of
work

“happiness does not appear to be related to the level of skill. The ILO
report finds that a high level of skills security, measured by an index
incorporating indicators of schooling and training, is actually inversely
related to happiness. The report suggests that this is due to jobs being
poorly attuned to the needs and aspirations of people, as they become
more educated and acquire more competencies. Job quality and
mobility need to adjust upwards. At present, too many people are
finding that their skills and qualifications do not correspond to the jobs
that they have to perform, resulting in what the report calls a “status
frustration” effect”, International Labor Organization (2004), Economic
Security for a better World .

Challenges the orthodox economic view of work as ‘disutility’ and only

done for instrument benefit of wages
 Sustainable Economic Policies

Basic income

Worker cooperatives

Social enterprises and valuing non-monetary economic activity

Shift taxes from good things (jobs) to bad things (carbon/fossil fuel)

Shorten the working week

Solidarity finance – crowd-funding, democratising money creation, alternative local

currencies

Peer-to-peer production/creative commons

More free/low cost public events, festivals

 Sustainable Economic Procedures

Shift from ‘economic growth’ and GDP measures to

qualitative development, sustainable prosperity – meaningful
free time not consumption

‘Jobless growth’ versus work-rich sustainable development ?

Measure what matters – shift from GDP to

qualitative indicators – health, human development
index, sustainable development goals etc., – a
‘dashboard of indicators’ to replace the power of a
single number (GDP)
From economic growth to economic security

“People in countries that provide their citizens with a high level of

economic security have a higher level of happiness on average,
measured by surveys on level of life-satisfaction and inequality in
happiness within countries. The most important determinant of
national happiness is not income level – there is a positive association
but rising income seems to have little effect as wealthy countries grow
wealthier. The most important factor is the extent of income security,
measured in terms of income protection and a low degree of income
inequality”. International Labor Organization (2004), Economic
Security for a Better World

A new set of objectives for progressives – especially trades unions and

the labour movement
Basis of alliance with green movement/environmentalism
“Basic economic security should be a human right, and this
should be defined in terms of advancing real freedom”,
ILO, (2004) Economic Security for a better World .
http://www.ilo.org/global/publications/books/WCMS_06
9016/lang--en/
index.htm

Sustainable economics and economies – real freedom for

all, not more stuff for all via carbon-fuelled consumer
capitalism and economic growth which is unsustainable,
unequal and undermines freedom and flourishing…..
Meeting the needs of all versus unnecessary wants

Consumerism

Asset-backed economics – land, resources, people

Democratisation all the way down

Based on what the community decide – no ‘one size

fits’ all sustainable economy
 Co-production: what is it?

“Co-production means delivering public services in an equal and

reciprocal relationship between professionals, people using
services, their families and their neighbours. Where activities are
co-produced in this way, both services and neighbourhoods
become far more effective agents of change.”
new economics foundation

“The involvement of citizens in the delivery of public services to

achieve outcomes, which depend at least partly on their own
behaviour and the assets and resources they bring”
(Boviard, 2012)
 Asset backed community development
and empowerment

Every person and every community is of value and has

something to contribute.

The task for statutory agencies is to work with people and

communities to identify and build on the assets they have,
helping them to set their goals and aspirations and assisting
them to achieve them.

Genuine democratised partnership working

Economics is a political subject.

It’s the interactions and relationships

between people that make the
economy go around.

Debates over economic issues

are not technical debates where
expertise alone settles the day. They are deeply
political debates.
 Expertise, economics and economists

A society in which ordinary people know more about

economics, and recognize the often conflicting interests at
stake in the economy, is a society in which more people will
feel confident deciding for themselves what’s best – instead
of trusting the ‘experts’.
It will be a more democratic society.
Experts should always be ‘on tap, not on top’
There will always be hard choices to make, always need for
some expert input, but this should be open and transparent

Hence the need for basic economic literacy and more than
that…serious public debate about economics
 The power of language

‘Entrepreneur’ /’wealth creator’ – viewed positively, promoted in

schools, universities, popular culture
‘Tax’/’government’ – regulation, drag on the economy, at best a
‘necessary evil’

Do we want ‘work’ (which may be unpaid) or ‘employment’?

What is the balance between work, employment and leisure?

Why is work viewed in economics as ‘disutility’?

Why don’t we think about solving the unemployment problem by

having more people working less, than less people working more?
 Group exercise

What should be the balance between ‘work’ and ‘leisure’?

What does ‘rebalancing the economy’ mean in Northern

Ireland ?

Have you heard or can you come up with arguments against

lowering corporation tax rates in Northern Ireland?

What are the arguments we can advance for ‘the joy of tax’?
 Power of conventional economics

First, it tells you what you want to believe – we all like

the comfort of the familiar and conventional

Second it over-simplifies a complex reality - ‘frames’ it

in a simple, understandable way

Example – the ‘framing’ of the economic crisis and

austerity story in the UK
‘We’ve been framed’: the austerity story in the UK…and Ireland…
and Greece…and Portugal….
 new economics foundation analysis of the austerity framing

1.Dangerous debt – the most important economic issue the UK faces is the size of public
sector debt, caused by excessive public spending.

2.Britain is broke – the UK’s public finances are like an individual household, which has
spent all its money.

3.Austerity is a necessary evil – there is no economic alternative to spending cuts.

4.Big bad government – the bloated, inefficient and controlling government is getting in
the way of progress, interfering in people’s lives and rewarding the undeserving.

5.Welfare is a drug – like drug addiction, state support is tempting, but ultimately
dangerous; benefit claimants are weak, reckless, undeserving and addicted to hand-outs.

6. ‘Strivers and skivers’ – there are two kinds of people in Britain: hardworking strivers
and lazy skivers, we each choose which to be.

7.Labour’s mess – all the faults of our economy can be pinned on the previous (Labour)
Government and their out of control spending
 Problems with modern economics

Externalising costs – lowering prices/costs by shifting

(‘externalising) them to other people in other parts of
the world, the nonhuman world, or the future

That is, the prices we pay for goods often do not

include the ‘full cost’ we pay

Example – subsidising of fossil fuel energy

“Energy subsidies are projected at US$5.3 trillion in 2015, or 6.5 percent of global GDP,
according to a recent IMF study. Most of this arises from countries setting energy taxes
below levels that fully reflect the environmental damage associated with energy
consumption” IMF, 2015

Mainly due to the environmental, climate change , health impacts of fossil fuel use not
included in the final price, and also because of direct and indirect state subsidies to
carbon energy
Never mind the ‘hidden subsidies’ from wars,
occupations and military spending
 Myths, magic tricks and modern economics

Myth# 1: Orthodox, undifferentiated economic growth as a

permanent feature of the human economy

Magic Trick #1: The 2008 crisis of banking in the private

sector becomes politically transformed into a crisis of
public debt under the new ‘regime of austerity’ and
welfare cuts.

Magic Trick #2: ‘Securitising debt’ and thereby

transforming ‘debt’ into an ‘asset’ on a massive scale is
surely the modern equivalent of turning dross into gold.
 Economics as /and politics

There is no such thing as a non-political economics

ALL forms of economics as political
ALL forms of economics are ethical, value based

Which means talk of ‘entrepreneur’ ‘rebalancing the economy’ is all

political….and ideological (based on a set of value positions and a view
of how the economy and society ought to be…not an objective account
of how the economy is)

That is, all economic policies (and forms of economics) are NOT
objective, value-free and certainly not politically neutral

All forms of economics/economic thinking are forms of ‘political

economy’
Political economy – the historical roots of modern
‘economics’
The depoliticisation of economics and its emergence as a ‘science’

Modern economics (neoclassical economics) – the political

economy of capitalism

But never named as such….too ‘political’!...too ‘ideological’!

Thus capitalism ‘hides in plain sight’ as it were – its simply

viewed and understood as ‘the economy’

Which of course gives it great power – naturalises this one form

of economic order as ‘natural’ and indeed the only one possible
(this is separate from normative debates about it being ‘good’ or
‘bad’)
 Public silence about economics...

One of the main achievements of the dominance of neo-

classical/capitalist economics is public silence (and
hence compliance, lack of debate) about economics

Economics is reduced to a ‘technical’ exercise in which

only ‘economic experts’ can participate

Best seen in the movement of departments of economics

into ‘management schools’ in our universities.
 Economic growth

“The predominant frame is simply that growth is good. Most

news stories take this for granted and reinforce it with the
language they use. Growth attracts positive words like strong,
buoyant and good; in its absence look for weak, stagnant and bad.
When a frame becomes universally accepted and constantly
reinforced, it can be hard to see it. Growth framing is now so
inbuilt that, for many people, questioning it has become
unthinkable and doing so seems misguided, unrealistic or even
deranged”.
Matthews and Matthews, 2015; emphasis added

But surely we need to know a) growth of what? and b) is more

growth always ‘good’ or ‘better’?
Economic Growth: What Are We Measuring?
GDP: Total expenditure on all goods and services
produced within a country

Adds to GDP:

Also adds to GDP:

Not included in GDP:

1968….
The Northern Ireland conundrum

“People in Northern Ireland

gave higher average ratings for
personal well-being for all
measures except anxiety
compared to the other 3 UK
countries (based on figures
before rounding). This has been
the case in every year since data
were first collected”

Office for National Statistics

(2015) Measuring National
Well-being: Personal Well-
being in the UK, 2014 to 2015
 And yet….

Figuring out and supporting how to increase wellbeing

is not at the heart of government thinking and policy
Rather it is ‘economic growth’, ‘foreign direct
investment’, ‘competitiveness’ ‘boosting the knowledge
economy’ etc.

Government in NI is focused on lowering corporation

tax rates, ‘rebalancing the economy’
Why not orientate economic and public policy towards increasing
wellbeing not (at best) the proxy of economic growth?

Or why is not ‘full employment’ rather than ‘economic growth’ not the aim

Which is better ‘jobless growth’ (finance based) or ‘work full post-

growth/no growth’?

Very heterodox position but one that has merit and evidence to back it
up…and at least merits discussion and debate

A very different political economic order – but unlike the economic status
quo, this is one that is explicitly and publicly debated,
“Anyone who believes exponential growth can
go on forever in a finite world is either a
madman or an economist”,

Kenneth Boulding
 Economy and Ecology

Management of the household and laws of the

household back together?

Human economy is a sub-system of the ecosystem

So…if the larger system is not growing …how can the

sub-system continually grow?
The earth in 1970
The earth in 2016…. Notice the difference?
The biophysical and ecological impossibility of
infinite economic growth

Standard assumption for growth of the

economy - 3% GDP growth per year.

This means the economy will double every 25

years
Economic growth is a substitute for equality
Economic growth under capitalism
reproduces and requires inequality
“Economic growth, for so long the great engine
of progress, has, in the rich countries, largely
finished its work. Not only have measures of
wellbeing and happiness ceased to rise with
economic growth but, as affluent societies
have grown richer, there have been long-
term rises in rates of anxiety, depression and
numerous other social problems. The
populations of rich countries have got
to the end of a long historical
journey”.

(Wilkinson and Pickett, 2009: 5-6)

 Conclusions: The return to political economy

‘Fixing’ economics must begin from accepting the

ideological/value and political character of ALL forms of
‘economics’
Values matter and need to made explicit not smuggled in as
axioms which become ‘facts’ ‘the truth’ as is the case with
neo-classical economics
There is no ‘value-free’, objective, neutral account of
economics....
Pluralism and debate about what sort of economy and
economics we/the demos/people want for the type/s of
societies we wish to live in.
We live in societies with economies, not economies with
societies
 Conclusions
Don’t believe all you hear….

Always be sceptical of ‘experts’, especially economists

Economics is always political economy, i.e. ethical, value based

We need diversity and pluralism in how we think about the economy

There is no one ‘right’ way of organising the economy and how we

organise it can be changed

“Follow those who seek the truth

Doubt those who say they have found it”
 5 simple propositions for 21st century economics

1. More on realism, less on mathematical rigour;

2. More on equity, less on efficiency and productivity;
3. More on humility less on hubris;
4. Reintegrating the ‘economy’ within ‘ecology’;

5. And move beyond a simplistic and now dangerously

myopic focus on ‘endless economic growth as a
permanent objective of the economy’
“The most alarming sign of the state of
our society now is that our leaders have
the courage to sacrifice the lives of young
people in war, but have not the courage
to tell us that we must be less greedy and
less wasteful.”

Wendell Berry, 1993