Editor’s note: This commentary is by Fred Jagels of Cabot.
Climate change, fortunately, has finally hit the headlines big time. As in the past, it continues to be framed within a political or moral context. If we can persuade leadership to make the right decisions, if the public will altruistically adjust their consumption, their travel, their homes and their lifestyle, we can beat this threat to our children’s future survival.
This ignores that our society is built upon an economic structure that will override these political and moral initiatives. We can blame inept political leadership, greedy corporations with too much political influence, criminal banking institutions, and improvident, hedonistic and clueless consumers all we want. But these constituencies all behave as they do primarily because the economic principles they continue to believe in, act on, are driven by and, so often must conform to, are diametrically opposed to dealing with something like climate change.
It can be asked why, given serious dysfunction and polarization, we continue to opt for a political solution?
One explanation is that the media have free access to public spaces and limited access to private ones. For this reason, the daily news is filled with the minutiae of elections, presidential itineraries and endless party politics. This has conditioned us to deal with society’s problems through the political system. Meanwhile we ignore the fact that, lurking in the background, there is an economic engine that drives what politicians are too often compelled to do. Very few are well informed about how this engine actually works.
Structurally, the economy, economics, the economic paradigm, is still designed for development, particularly material development. It is not designed for the issues that confront an already developed society. Economists are not equipped with the knowledge to understand health care inflation, student debt, inequality, affordable housing or climate change. Economics continues to be predicated on scarcity principles even as we drown in abundance. It is based on production and productivity even as 80% of current jobs have transitioned to services and continued productivity enhancement kills jobs and enriches the one percent. It assumes that all “private” activity is “market” activity even as 40% of all private activity has departed the market. It sees compensation in economic terms, even as educational credentials are now the primary determinant. Clearly we have an institutional structure that is at odds with evolved reality.
And here is the rub: the most distinguishing principle of the economic paradigm is mobilization by incentives, rather than by directives, a principle that presumably we would want to maintain. Nevertheless, the only universal incentive that has been found to work among the broad range of human personalities is “more.”
A little history. When the founding principles of economics broke down utterly in the late 1920s in this country — when generalized abundance began to replace generalized scarcity, undermining the basic premise of the economic method — the economy, and the jobs that people depended upon for a living, collapsed with it. Inevitably, the only “fix” that economists were able to come up with (in 1946) was predicated on “even more.” The newly minted policy of economic growth continued to rest on a basis of production and sales, but now it was fortified with extensive government, corporate and financial stimulation. This was seen as the only way to rebalance consumption with production, to keep everybody working and buying and to forestall another collapse.
Growth still rules. Until we seriously commit to reconstructing the economic paradigm to integrate the post-industrial, post-market activities that have emerged since 1946 (which, as noted, economists are clueless to deal with); until we come up with benign incentives to assure continued self-mobilization of the economy, our future devolves into either climate catastrophe or totalitarian control.
There has been some progress. We have been able to separate growth from energy use to a limited extent. We are beginning to witness the emergence of benefit corporations (B Corps) as opposed to profit-maximizing corporations. There is some realization that using one’s house as an alternative stock market is a really bad idea. There is dim awareness that post-market activities like health care require institutional checks lest they bankrupt us all. There are proposals for universal basic incomes and portable benefits to suit a post-job economy.
But the idea of addressing climate change by restructuring economics instead of pleading with politicians (who will lose if they respond) has not yet entered the collective mind.
In the meantime I nominate Greta Thunberg to sponsor a global contest for a new universal incentive to replace “more.” If anyone can tackle this most perplexing heart of the matter, she can.
