economic narratives for over a decade (Oxfam published ‘Economic Growth with Equity: Lessons from East Asia’ in 1998). OK, it’s better than just ‘Growth’, and where it’s been achieved, it has an unrivalled impact on poverty, but thinking has moved on in a number of areas, and G+E is starting to look distinctly threadbare. I’ve been putting up posts on this blog on different aspects of this, but here’s a synthesis, and some links to relevant posts:
1. How much Growth?: Climate Change and other environmental challenges mean that the boundary conditions on economic activity are becoming much more salient.
- Barring a miraculous new technology, it is far from certain that the carbon intensity of growth can be reduced to stay inside a safe emissions pathway at current growth rates. If that is true, then there are only two options: less global growth or more climate change. If the choice is the former, then who grows and who does not (growth rationing) becomes a crucial issue of economic justice. Growth may be just too scarce and precious to waste on the rich countries (where it doesn’t make people any happier).
2. Are we measuring the right thing
?: The recent report of the Stiglitz Commission to President Sarkozy highlights just how mainstream concerns over measurement have become. Stiglitz argued that the way we measure economic activity has to be reformed on 3 fronts:
Reform GDP to respond to the evolution of the economy – from quantity to quality, from goods to services, the importance of the caring economy etc. (But I’m not sure South Africa is on the right course in expanding GDP to include criminal activity (see article here
Shift from measuring economic output as the primary indicator of policy success to measuring the impact on human well-being, including the caring economy
Pay much more attention to long term economic, social and environmental sustainability (stocks, rather than flows)
Changing what we measure (and therefore value) might also provide a more imaginative political escape route from the entrenched pro v anti growth debate.
3. The importance of volatility and unpredictability
: economic issues are usually discussed in terms of stocks (eg of assets) and flows (e.g. average incomes). However, virtually all serious studies of poor people’s lives show that it is uncertainty and unpredictability that is often the defining, and most dreaded, feature of ‘ill-being’. This has led to increased interest in a range of mechanisms to reduce vulnerability to such sudden shifts, including social protection, enhanced social capital, disaster risk reduction, keeping health and education free at the point of use etc.
4. What do we do about Financialisation
?: The eclipse of anglo-saxon capitalism, the critique of structural adjustment, and the damage wrought by financial crises in Asia and Latin America, and most recently, the global economic crisis, have led to a profound questioning of the ‘wisdom of markets’. At the same time, the extraordinary size and power of the financial sector, even when reasonably well regulated, poses serious threats to the real economy in which most poor people live. How strong is the case for capping and reducing the overall weight of the financial sector? See interesting piece on shrinking the banks in the most recent issue of Prospect
And that’s just within the economic arena. There’s plenty more to say on politics and culture (state building, rights, the centrality of faith in the lives of the poor etc etc), but that’s far too much for one blogpost.
Any other candidates on economic issues?]]>