Economic system

An economic system that supports people and the planet is still possible | Guardian of sustainable business

I lead an organization with an ambitious mission statement: to transform the economy so that it works for people and the planet.

For 30 years the New Economy Foundation worked with others to move our economic system from the current model – growth at all costs – to one where the main objective is to maximize human well-being, fairly, and without destroying the environment on which we depend all.

We have had successes. We helped reform the EU Common Fisheries Policy for the better and created over 800 businesses in the most deprived parts of the UK. We coordinated the Jubilee 2000 Debt Coalition which led to the cancellation of $100bn (£62.5bn) of unpayable debt in poor countries. And we really thought our time had come when we persuaded the UK government to start measuring human well-being.

But when the financial crisis revealed more clearly than ever the failings of the current economic status quo, it was not our vision that rose from the ashes. In just six years, responsible banking has returned to the status quo, while the mainstream political narrative insists that the public sector should pay the price.

As well-established as this narrative may seem, I am as confident as ever that systemic change is possible. After all, fundamental shifts in the mainstream of the economy have happened twice in my lifetime. When I was growing up, it was the shift to Keynesianism, which emphasized government intervention and social safety nets. And in my adult life, the shift to neo-liberalism with its emphasis on free markets and smaller government.

Looking back at what fueled these changes helped me understand the depth of our task today. In both cases, the focus was not on short-term policy change, but on four key strategies. The discrediting of the existing dominant narrative and theory of how the economy works; the creation and promotion of a new narrative and a new theory of how the economy should work; the weakening of the power bases that reinforce the current system; and the creation and growth of new power bases that fuel new narrative and theory.

It took 30 years for the first neoliberal economists to win the debate – from their first encounter in Switzerland’s remote resort town of Mont Pelerin in the late 1940s, to the rise to power of Thatcher and Reagan in the late 1970s. At that time, they created new institutions such as the Heritage Foundation, the Cato Institute and the Institute of Economic Affairs (IEA). They are becoming dominant in the main economics departments of universities and in the editorial boards of academic journals; they have influenced case law. Most importantly, they created a powerful new narrative or story that was both simple and tapped into people’s concerns. A narrative based on three fundamental principles: individual freedom, free enterprise and limited government.

We and many other civil society organizations have been much better at saying what is wrong with the current system than at providing a positive new story about how we can thrive while living within planetary ecological limits. We have tended to argue over details rather than collaborate and build the infrastructure necessary to support a powerful movement for change. We played our own instruments on our own scores in different orchestras, and the result was noise.

It’s time to change tactics. The challenge before us is greater than any organization, and at the NEF we know from experience the power of partnerships. In the face of such systemic social, economic and environmental malaise, we need to build a broad base of campaign leaders from across civil society – people from mainstream nonprofits, labor unions and environmental, social justice and denominational. The desperate need for a new kind of economic system is at the root of so many of our campaign problems.

The question then is, what exactly do we represent? How do we work together to turn today’s progressive noise into a gripping new story about the economic system we need?

My colleagues and I are currently working to identify and test a new set of key principles to underpin this narrative. If the key ingredients of neoliberalism are individual liberty, free enterprise and small government, what will a new, more just and sustainable economy be built on?

We don’t have the answers – at least not yet – but our shortlist so far includes strengthening natural systems (instead of just maintaining them), long-term investing, developing non-market economies and the democratization of ownership and economic governance.

These may well change, but my current feeling is that if these principles were put into action, humanity has a chance to provide enough good jobs and livelihoods for everyone on this planet without destroying our system of survival. If you think I’ve misplaced something, please let me know below the line.

Politicians will only make such changes if there is strong enough public pressure, which in turn requires the generation of an exciting new story and a strong new power base pushing it. Such is the task: it is arduous, certainly, but it is both crucial and possible.

Stewart Wallis is executive director of the New Economics Foundation

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