Trevor Hancock: The welfare society needs a welfare economy
Last week, I discussed the first of three actions needed to create a well-being society, according to the World Health Organization’s Geneva Charter for Well-Being: Valuing, Respecting and Nurturing Nature . This week, I turn to the second: Designing an equitable economy in the service of human development within planetary and local ecological limits.
In the face of growing concern that our current economic system is massively harming the Earth’s natural systems while creating excessive inequality and insecurity for many, the idea of an economy that puts people and planet first is sparking a growing interest. Although long central to the work of ecological economics, such an approach to economics has been marginalized and largely ignored in mainstream economics, business operations, and government policy until recently.
Instead, neoliberal economics has become orthodoxy, especially since the days of Margaret Thatcher and Ronald Reagan. Neoliberal economics enshrines selfishness and greed as the drivers of the economy, and material wealth, gross domestic product growth, and shareholder profit as the goals of a society where the economy is at the center of concerns.
Impacts on the health and social well-being of people and the environment that supports them, whether locally or globally, are a secondary concern. In fact, they are considered “externalities” and largely excluded from consideration “solely because we have not built in to them in our economic models,” noted ecological economist Herman Daly.
This leads to an imaginary economy, in which GDP can grow both by selling tobacco and by treating diseases caused by tobacco; where profit can be made by both ignoring pollution regulations and cleaning up the mess afterwards; where growth can continue even though we are already beyond the limits of Earth’s natural systems; where the rich get richer while the poor have a decreasing share of wealth and income.
But if we make money by making people sick or even killing them, by damaging or destroying communities, or by undermining the Earth’s natural systems that underpin our existence, in what conceivable way can we say what have we benefited from? How has our well-being been improved?
Fortunately, a growing number of key institutions recognize the limitations of the current model. Recent developments at the United Nations and among some national governments, including perhaps in Canada (the jury is still out on this), are particularly interesting. Here I will deal with recent UN reports. Next week I will talk about national developments in Canada and elsewhere.
In a September 2021 speech presenting his report, Our Common Agenda, to the UN General Assembly, UN Secretary-General Antonio Guterres said: “GDP does not take into account social and environmental damage incalculable that can be caused by the pursuit of profit. The report itself went further, stating, “Absurdly, GDP rises when there is overfishing, cutting down forests, or burning fossil fuels. We destroy nature, but we count this as an increase in wealth.
Guterres also called for a new way of measuring progress that values ”the lives and well-being of the many rather than short-term profit for the few”. A United Nations Environment Program report from February 2021, Making Peace with Nature, goes further by setting out some of the ways we need to rethink the economy.
This overhaul includes the integration of comprehensive natural capital accounting, so that when we deplete the Earth’s natural resources, we count it as an economic loss, not a gain. This is part of the shift to measuring “inclusive wealth”, which is “the sum of produced, natural, human and social capital” – real wealth means increasing all of these forms of capital at the same time.
Other key steps include governments moving away from “environmentally harmful subsidies”; ensure that “investments in sustainable development are financially attractive”; tax harmful things, such as resource use and waste, rather than socially beneficial things such as production and labour.
These social measures and related measures set out by the WHO, such as decent and safe work, fair trade and inclusive social protection systems, are the basis for creating a good economy and society. -to be.
It’s a clear call to put people and planet before profit and redefine the business we are in as a society – it must be the economy of the future.
Dr. Trevor Hancock is a retired professor and senior researcher in the School of Public Health and Social Policy at the University of Victoria.