Green Economics – by Matthew Bain


The story of Adam and Eve teaches us about the nature of work: before the Fall, humanity existed in harmony with nature, and our work was to tend the Garden; afterwards our work became a burden and source of suffering, as we found ourselves struggling against nature. The Jewish psychoanalyst Erich Fromm describes the Fall in terms of alienation. Alienation means being out of touch with our own nature, with others, and with our surroundings and environment. The current economic system is both alienated and alienating, and even its so-called ‘winners’ are in fact losers. A psychological study from before the current financial crisis showed that hedge-fund managers

“had high levels of depersonalisation and a staggering two-thirds were depressed. There were similarly high levels of anxiety and sleeplessness. The more they earned, the more likely they were to have these problems. Twice daily, they consumed both alcohol and an illegal substance (mostly cocaine). For relaxation, they chose solitary pursuits: jogging, masturbation and fishing were common.” (Oliver James, writing in The Guardian)

Fallen from paradise indeed. Continuing his analysis, Erich Fromm uses the concept of idolatry. He contrasts worship of the true God – manifesting in the living creativity of productive work – with the worship of the completed, rigid product of work – money. He quotes Goethe:

“the Divine is effective in that which is alive, but not in that which is dead. It is in that which is becoming and evolving, but not in that which is completed and rigid.”

The current economic system is essentially idolatrous, positioning humanity as the servant of money, not the other way round. The purpose of Green Economics is to reverse this injustice, and return money to its proper place as the servant of humanity.

The cause of the current economic crisis is the huge agglomerations of private capital which have developed Frankenstein-like lives of their own and are neither understood nor controlled by their human ‘masters’. This private capital sloshes around the world, engaged in fruitless transactions such as currency speculation, credit default swaps, arbitrage etc, while billions of people remain unemployed or underemployed because of lack of access to even a few dollars worth of equipment. The role of Green Economics is to ‘unfreeze’ this capital, and let its moisture stimulate a grass-roots recovery. Measures such as a Tobin Tax on currency transactions would be welcome sources of funds, especially if channelled correctly.

A good example of Green Economics in action is microcredit, as pioneered by Nobel Peace Prize-winning economist Muhammad Yunus and the Grameen Bank in Bangladesh. Microcredit shows that the lives of families can be substantially improved and the untapped potential of women in particular developed by small loans based on a system of trust and cooperation. It is so refreshing to see economic intelligence focus on the needs of people who were formerly excluded. Does anyone really think that we can revive the global economy by endlessly targetting products at the same wealthy 20%? The answer surely is to include the remaining 80%, by devising products and pricing which are in genuine sympathy with the needs of the developing world. Even if it means a short-term reduction in profits, it can only produce good results in the long-term. A bigger cake would benefit everyone – instead of the economics of envy where we are content as long as our own slice is bigger than our neighbour’s.

Microcredit is an example of ‘small is beautiful’ as articulated in the work of the green economist Fritz Schumacher. In Schumacher’s vision, the distance between people and money must be removed, and money brought into close proximity with people who need it, in practical forms they can use (appropriate technology). Access is more important than ownership, which happily avoids many sterile ideological arguments between Left and Right. Anathema to Schumacher’s vision of access and proximity are current corporate structures with their long chains of command, separation between shareholders, managers and workers, and myopic focus on short term profit. Amongst other ills, these lead to environmentally disastrous and unjustifiable distribution chains like supermarkets which send prawns from Scotland to Thailand for packing before being returned to the UK for sale, or which endlessly transport sheep around the country in search of the cheapest abattoire.

Environmentalist Vandana Shiva points out that it is not enough to stimulate the small and beautiful, we must also fight the big and ugly! The much-trumpeted economic growth in India benefits only a small section of the population, and in fact harms many more. Why should there be a burgeoning steel industry in Orissa when the people there use no steel in their houses? 100% of the steel is in fact for export, and Dr. Shiva argues that Orissa is being used simply because it is convenient for wealthy countries to ‘outsource’ their pollution and exploit the poor conditions and pay of Indian workers. Global trade frameworks such as the WTO seek to increase the opportunities for such exploitation and should be resisted. Instead, the green vision of globalisation requires humane minimum standards for labour throughout the world. In place of the industrial and capital-intensive development agenda foisted on poor countries by organisations like the World Bank and IMF, a people-centred approach is required, as implemented by NGO’s such as Practical Action and the Jeevika Trust.

The life and work of Mahatma Gandhi show how economic activity is a key part of our struggle for genuine freedom, including its spiritual and political dimensions. Many of Gandhi’s most successful campaigns such as the Salt March and the Khadi movement demonstrate the liberating character of work which emphasises self-reliance and the strengthening of community. Perhaps demonstrating his origins in the Modh Bania merchant caste, Gandhi was always delighted to sell Khadi (homespun cotton) to the people who came to see him as he travelled around India by train, contributing funds for the independence struggle. It is important to remember that business and trading are vital expressions of life: but they must be harnessed to serve life, not oppress it.

Genuine entrepreneurship is to be encouraged and nurtured, but our governments must not allow any more of our public services to be cannibalised by big business. Under the Private Finance Initiative (PFI), £68bn of public infrastructure has been built in the UK, for which the public is committed to payments of £215bn to private consortia, even though these projects could have been delivered and run 30% more cheaply by the public sector. There is no genuine initiative or entrepreneurship in this ability to divert public money into private coffers, and we can no longer allow our politicians to maintain their supine posture towards big business. The time for strict regulation of big business in the public interest is now – and this same regulation should give our small businesses a space to breathe. Our now publicly-owned banks should be prevented from gambling on derivatives and instead be forced to make credit available to small businesses.

The prospects for Green Economics depend on our ability to protect existing communities in the developing world, and build new types of extended community in the developed world. Community strength is the real solution to consumerism and the creeping commoditisation of our lives. Community bonds built on shared interests and mutual respect enable us to pool scarce resources and use our collective imaginations instead of always relying on cash. The Landshare scheme in the UK is in its infancy, but already boasts 3,600 registered land owners, including the National Trust, who are willing to share some of their land as allotments for 28,000 would-be growers. New cooperatives are forming to buy village post offices and pubs threatened with closure, and revitalise them as centres of community life.

The epic Western “Once Upon A Time in the West” offers a microcosm of modern economic development accompanied by banditry – showing how the railroad pushed across North America, costing many lives. In one scene we are shown that the only thing that can stop a gun is a wad of cash, but the question in my mind is, “how can we stop a wad of cash?” The answer offered by alienated economics is “more cash” – therefore carbon trading schemes are invented to ‘incentivise’ governments and industries not to kill us in their crazy pursuit of money. The actual answer is “love” – only love can stop money. Motivated by love, Green Economics seeks to skilfully and creatively combine our great religious and cultural traditions, which transmit our collective wisdom, with well-selected and appropriate modern technologies. As Greens we should not spend all our effort devising technical solutions, because we should recognise, like Gandhi, that the main change required is of the heart.

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Categories: Gandhian Economics, Politics & Democracy


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