IPPR says nef is wrong: growth & happiness aren't mutually exclusive
October 9, 2011 In this article on PublicFinance.co.uk, 3 economists say that the new economics foundation is wrong, that we can have 'prosperity with growth', or that is, better economic well being whilst bringing jobs growth and economic recovery, increasing output per capita.
It's worth a read, but the different groups of economists "Jackson and his ilk" and Nash and his ilk are operating on two completely different sets of assumptions-- what new economics (aside from the foundation) is a movement that rethinks economic theory by rewriting the assumptions upon which our economic models are based. Nash et al are arguing back on neo-liberal, capitalist economic theory. They are talking past each other.
One actually wonders whether Nash et al bothered to read Tim Jackson's book "Prosperity without Growth" but instead just decided to criticise the title.
We still recommend you read it. You can start below.
(and once you've done that, Click here to buy Tim Jackson's book for yourself or here and here for excerpts.)
by Nash et al from PublicFinance.co.uk
Heading for his summer holiday, Ed Miliband was photographed carrying a pile of ten weighty books. Towards the top of the Labour leader’s list was Prosperity without growth by Tim Jackson, professor of sustainable development at Sussex University.
Jackson’s argument is essentially that a continually growing economy will destroy the planet since it is a myth that economic activity can be ‘decoupled’ from natural resource use, and in particular from carbon emissions. His book claims that the only way to lower greenhouse emissions enough to prevent dangerous climate change is to reduce economic growth to zero.
Jackson is not alone. Others – most famously Richard Wilkinson and Kate Pickett in The Spirit Level – argue that a relentless focus on growth does little but make citizens unhappy as they join a race for status that can only end in disappointment, with someone else always further up the greasy pole.
These arguments have their merits but miss the wood for the trees. Growth in economic activity – more jobs and more output – can be consistent with environmental sustainability, happiness and greater equality. The problems that our society has faced in recent years – rising carbon emissions, increased dislocation and insecurity, rising inequality – have not been caused by growth per se. They are caused by the use of dirty and old technologies rather than modern, low-carbon alternatives; the lack of a carbon price to deter polluters; a failure to find salient policy solutions that raise wellbeing; and a failure to change the UK’s economic model so that the gains from growth are more evenly disbursed. Another world is possible, but it will almost certainly involve economic growth.
Just as classical economics has deified growth, so Jackson and his ilk are demonising it. Yet both camps risk simply paying it too much attention at the expense of the underlying factors that really matter. These are investment in clean technology, the creation of jobs and the narrowing of the inequality gap.
The critical question is not so much the level of economic activity but its type. More sustainable growth would be a lot better for people and planet than less or zero unsustainable growth. Debt-fuelled consumption by government or citizens, and carbon-intensive energy and transportation are increasingly understood as unsustainable forms of economic activity. But consumption paid for by income and activity powered by renewable forms of energy are far more sustainable.
Economic theory outlines that increased productivity, accumulation of human capital and technological change are all critical to increasing economic growth.
Click here to continue reading...
Enable me: prison leavers and Work Programme inclusion
Something notable is buried in the article "750,000 to join ranks of long-term unemployed in the next four years" (as reported in the Guardian).
"More than 100,000 prison leavers will now also be entered into the Work Programme for the first time..."
This is good news, albeit a bit old; though it seems no one paid attention when it was announced last August. The Conservative government (why bother calling it a coalition anymore, honestly) occassionally does things that make sense -- unfortunately those times are few and far between.
70% of those in prison, on average, reoffend. Those serving community sentences reoffend less than half the time. Recall that the first real trial of social impact bonds was in Peterborough Prison where a social enterprised bargained for an estimated return of forgone savings (or money that other would have been spent) to curb reoffending rates by implementing a successful scheme that did indeed curb reoffending rates.
It's about enablement -- according to Dr Martin Seligman, unhappy with his happiness agenda has reframed it as well-being. In Flourish, Seligman spends most of the book talking about self-awareness and emotional skills as the most important skills for success in 21st century work. This is what we have called digital literacy in our forth-coming book. Seligman tests his well-being teaching programme not on prisoners, but on another often economically marginalised post-term group: soldiers. To 'flourish' is about having the presence of mind and confidence in yourself to pull your own resources to adapt to whatever challenges life places in front of you.
There are a number of groups doing enablement work for the long-term unemployed (London Creative Labs and Particple to name a few). Their approach is different: it involves teaching what is largely self-awareness, to enable people back into work.
London Creative Labs board member David Pinto believes, though, that if we continue to conceptualise work as something that we 'put people back into' then we won't see employment rise. Pinto's big idea is that by teaching enablement, people can create their own work, work for their society doing what needs to be done.
But does government have a role? We at rethink work would say that government's role is to enable society to have the flexibility and the resources for that to happen.
There is something similar about the way social impact bonds work to the way that the Work Programme works: private sector contractors are paid upon results. But that won't make much difference if the economy isn't creating jobs, or rather if people aren't enabled to recognise and make their own opportunity. That's the danger.
There's easy criticism to be leveled at this view: how can you expect people to all be entrepreneurs or freelancers? We don't.
The extreme view is that as we all become freed, enlightened agents of the "creative economy", large businesses will cease to exist. We don't think this will happen, rather what we think is likely is that the economy will be able to support more entrepreneurial activities, social enterprises, and small business made up of coalitions of professionals who bring unique skills to their work. Those with the resources (Seligman's high levels of well-being) will be the most desirable candidates for jobs, will likely have the wherewithall (risk tolerance) to be entrepreneurs.