Governance and Economy

The Wall Fell, But We Didn't Learn
The Wall Fell, But We Didn't Learn

The fall of the Berlin wall was a monumental event in history. Interestingly enough it acted as the end of a large-scale governance/economic experiment. Here we have two societies, each with similar backgrounds, but each with drastically different views of government and economics. On one side was placed a highly controlled society and on the other was placed a free market society. The prevalence of the capitalism in this instance was taken as proof of its superiority and also acted to secure it in our minds as they way for the future. However, there have not been any others to step up in competition – even if they would have been allowed socially.

So we are still locked in the same debate – capitalistic democracy or communism/socialism. Note how it is one or the other in this debate; no one seems to question that perhaps neither is the correct form for human prosperity. Given that the two extremes are both unsustainable, and the incredibly unlikely (and perhaps socially unwanted) possibility of a green, benign dictator coming to our rescue, we are ultimately left to our own devices to re-envision government So how do we make this change in the bureaucracies we have established and entrenched in unsustainable growth? How do we transition to a truly beneficial and socially just form of governance?

I would suggest we first ignore the initial pessimistic view (however likely it might seem to be) of a collapse of society in favor of an optimistic view of successfully transitioning without collapse. Why bother? Because the latter option gives us a challenge to work towards while the former option encourages laziness (and, in my case, would significantly increase my drinking habits in order to cope).

We Need a Father, Not a Big Brother

What is a government? Is it a bunch of guys (and girls) in suits telling us what to do and not do? Is it the all-knowing, all-controlling “state” that presides over our daily life? Obviously there is room here for debate and what we want our government to look like. The government’s role is to protect us, but also protect our continued prosperity (and thereby assure it’s own continued existence). While those on the far right fear a big brother government and those on the left fear reckless consumerism, I fear a general lack of protection from both. What we need is a government to act like a father, not a big brother.

Like a loving parent, the government is supposed to look out for our future while sustaining our present happiness as best as it can. However, any parent knows that often temporary setbacks in momentary happiness are made in order to ensure a bright future. We cannot, as is noted in Prosperity Without Growth, continue to be “lured by our evolutionary roots, bombarded with persuasion, and seduced by novelty: we are like children in the sweet shop, knowing that sugar is bad for us; unable to resist the temptation.”

It should be the role of our government to curb consumerism and consumption when it threatens to destroy any chance of future prosperity. It is important to note that it should be our government who realizes that happiness is not found in a big car or fancy house and that the decreasing marginal returns of consumptive happiness should signal a flaw with a system that encourages infinite growth. Now, I’m not suggesting that our government become totalitarian or turn into the aforementioned “big brother,” I am suggesting that policies are vital in shaping the way our economy works.

Sustainable Economy Requires Sustainable Government Policy

As Prosperity Without Growth notes,

“Examples of the perverse effect of dominant structures are legion: private transport is incentivized over public transport; motorists are prioritize over pedestrians; energy supply is subsidized [oil] and protected, while demand management is often chaotic and expensive; waste disposal is cheap, economically and behaviorally; recycling demands time and effort; ‘bring centers’ are few and far between and often overflowing with waste.

Equally important are the subtle but damaging signals sent by government, regulatory frameworks, financial institutions, the media, and our education systems: business salaries are higher than those in the public sector, particularly at the top; nurses and those are in the caring professions are consistently lower paid; private investment is written down at high discount rates making long-term costs invisible; success is counted in terms of material status (salary, house size etc); children are brought up as a ‘shopping generation’ – hooked on brand, celebrity and status.”

Our governments must now engage in many important and related tasks in order to create a society and economy that is not only sustainable but more in-line with the true prosperity of its people. We need our government to “develop and apply a robust macro-economics for sustainability; redress the damaging and unsustainable social logic of consumerism; and establish and impose meaningful resource and environmental limits on economic activity.”

Lucky for us, we elect our government in the states. They have no choice to but listen to us (despite how unlikely it may seem, they do listen or they get replaced). Do something right now, sign the position on economic growth. Then read Prosperity Without Growth and The Great Transition. I’m still working on them myself, but have so far found the insight invaluable.