An economy for the benefit of 1% of the population

Despite the best efforts of climate campaigners, politicians and active citizens, global carbon emissions are yet to turn a corner. The earth continues to lose forests and wildlife, and continues to accumulate plastic waste and pollution. It can feel like common sense to stop damaging the earth we depend upon, and yet somehow it continues.

Behind this environmental damage lies the economy. It has proved hard to stop fossil fuel use or deforestation, or even single use plastics, because ultimately they are commercial operations that make money and drive economic growth.

In a recent episode of the Nomad Podcast, the theologian and climate activist Tim Gorringe helpfully outlined the root of the problem:

“You have a group of economists who say that the key thing is to have growth, and what drives growth is private enterprise. And what makes private enterprise is private investment. And so you have a model of the economy that is geared to maximising profits for shareholders.

Now, only 1% of the world’s population have any stocks and shares. And so you have a model of the economy which is organised for the benefit of 1% of the population.

In order to do this, you gave to grow, because firms will only succeed for their shareholders if they increase their profit year on year… We’ve got on this treadmill where growth is absolutely essential and if you’re not growing you’re failing. It’s the completely wrong model, as economists like Herman Daly have been saying for years. Instead of saying ‘how much growth are we having?’ we ought to be saying ‘we’ve reached a situation which gives human beings a really good, full, healthy, enjoyable life, and what we want to do is keep things at a steady state.”

This is a useful summary of the heart of the problem. Environmental problems such as climate change and pollution share a common root with social problems such as inequality and economic marginalisation. They both spring from an economy that is fundamentally organised around the needs of a narrow few.

This is why Green Christian, an environmental network, runs this campaign on economics called Joy in Enough. The green issues that we are passionate about will never be resolved without tackling the underlying economic model.

Other economic models are possible, and no, that doesn’t mean Communism. What we advocate is neither an economy run entirely by private enterprise nor one run by the state, but a truly democratic economy in which everyone has a stake. There would be a much larger role for community and employee ownership, for co-production, for not-for-profit enterprise. Exactly what that might look like is an ongoing discussion, but there are small scale examples all around us and on the business front, we regularly write about the ‘green shoots’ of this new economy.

As Gorringe says, “we need to think through a world economy which is geared to the future, to the sustainability of all communities, and not just the rich.”

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