Tim Jackson’s article on how to turn the rhetoric of sustainability into action (‘Beyond rhetoric’, RSA Journal Winter 2009) offers intriguing glimpses of what may lie ahead socially and economically, but leaves the reader to fill in the gaps according to their personal tastes. The piece poses questions redolent of that asked by WB Yeats in his poem The Second Coming: “What rough beast, its hour come round at last, slouches towards Bethlehem to be born?”
Yeats had in mind a sphinx, or some other chimera composed of parts of other animals, and that is the kind of society that we should hopefully end up with. It would redistribute judiciously, use market mechanisms widely to reduce emissions, and legislate and plan with wellbeing rather than growth as its objective. Dirigiste hippy capitalism, come on down.
The credit crunch represented a spectacular defeat for the libertarian free markets argument. It reasserted the hegemony of the state, although politicians have proved disappointingly reluctant to press home their advantage in the UK and US, for example by sundering casino and utility banking.
The capture of state institutions by financial ones is a discouraging omen that the next decade may bring a return to “business as usual”. Hopefully that outcome will be forestalled at the ballot box, the mechanism through which, in Europe at least, voters have traditionally kept a check on would-be robber barons. Deciding the optimum level of redistribution is a fundamental role of our democracy, balancing rewards for talent and good luck with support for the untalented and unlucky. Old fashioned enterprise, appropriately channelled by the state, has better potential to build a new economy than woolly “community businesses”, I suspect.
The credit crunch represented a spectacular defeat for the libertarian free markets argument
While five year plans should remain an unmourned artefact of Communism, some state economic intervention, it has transpired, is not such a bad thing. But transfusions of state capital into green technology start-ups need to be stepped up. It is true, as Tim argues, that government backing for the green economy has been weak compared with its vigorous rescue for the banks.
Tim rightly diagnoses a kind of hysteria around economic growth as a personal and political ambition. Western governments will suffer collective nervous breakdown if they worry too much about their position in global rankings of GDP, as many currently appear to. The narrow vision of traditional economists is partly to blame. It is inevitable that as populous countries such as China, India and Brazil industrialise, they will overtake less populous countries such as the UK and France. We former colonialists will need to take lessons in humility from small but excellent states such as Denmark. There is comfort for us in watching living standards rise among the new economic super powers. These will automatically reduce birth rates and, with them, pressure on world resources.
A greener economy should result from both state intervention and consumer choice. Germany, for example, has fostered a vibrant renewable energy sector through feed-in tariffs. Meanwhile, sales of planet-trashing SUVs have fallen off a cliff. Even the well-off, it appears, fear dirty looks in the shopping centre car park. Mainstream car makers are moving increasingly into hybrid and electric vehicle production. Some projects are meanwhile too big and long-term for anyone other than the state to undertake. The project to build a barrage across the Severn to harness tidal energy springs to mind.
The regional development strategies that left Tim so unimpressed are in my view a transparent charade staged in response to the Treasury’s obsession with growth. London and its hinterland enjoy an irresistible agglomeration advantage which consigns lesser UK cities to long-term relative economic decline. Most people active in economic development in the provinces know this. They simply do not say it publicly.
What always strikes me as a business journalist visiting a city like Newcastle, a manifest loser in economic terms, is how blithely unworried the ordinary inhabitants are about it. They have robust civic institutions, strong local pride and a well-documented capacity to throw a party. According to one survey on contentment published a few years ago, the most miserable Britons were not impecunious Geordies but the prosperous inhabitants of the south east. The imputed causes were commuting and the insecurity that daily exposure to extremes of wealth and poverty can occasion. Relative economic underperformance matters a lot in the boardroom of the regional development agency. Less so in the pub, football stadium or mosque.
Propriety discourages too much discussion in governmental and business circles of the logical difficulty of spawning high-end manufacturing activity when you have lost the low-end kind. It is telling that the UK’s de facto national champion in manufacturing, Rolls-Royce, makes aero engines whose disruptive technology was invented before the Second World War. However the decline of manufacturing is not as terminal as it sometimes appears. The competitive advantage of Asia will be eroded by rising wage costs and an eventual revaluation of the Chinese renminbi.
It is Luddite to dismiss technological advances as promoting inequality, as Tim, himself a technology entrepreneur, flirts with doing. People do not profess themselves any happier by virtue of having access to penicillin or hip replacements. But the logical assumption is that they are. Besides, creating better technologies goes beyond questions of what the philosopher JS Mill termed ‘felicific calculus’. It is the characteristic that along with language marks us out as human. Better technology is an end in itself, facilitated rather than justified by profits.
Jonathan Guthrie FRSA is enterprise editor of the Financial Times