 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
 |
|
|
|
Economic Vision
Greens (WA) Detailed Policy 2001The single minded focus of big business and governments on economic growth and increased resource consumption is not sustainable in our finite world. Priorities must shift away from growth to more labour intensive work, resource use conservation and a just sharing of the earth's resources which requires greater local self-sufficiency with democratic community development. The global vision of transnational corporations works against this strategy. Gross Domestic Product (GDP) growth no longer equates with increased quality of life. Holistic indicators such as the General Progress Indicator (GPI) are needed.
Specific Policies
The Greens (WA) propose action with public participation to:
reform the legal, regulatory and tax systems to bias business incentives towards labour intensive development rather than replacement of workers by machinery, especially for the unskilled and semi-skilled, but not at the expense of working conditions or the environment;
change economic development towards thrifty resource use and recycling to meet essential human needs and social development, and away from economic growth and labour productivity increases through increased energy input which encourages unsustainable resource use;
revitalise local economic activity and communities, recognising the concept of the limits to growth;
substitute the Australia Institute's broadly based GPI for the cash transaction based GDP as the standard measure of economic performance;
have the Australian Bureau of Statistics report both GPI and GDP, and include on its website a description of the value judgements applied to compilation of GPI with provision for online participation by the public to apply their own value judgements and obtain their own interpretation of GPI;
promote developments that reuse and recycle waste in economic networks that mimic natural ecosystems and approach zero waste, a strategy that favours smaller scale operations;
divert resources to rehabilitate degraded agricultural land and communities, introducing practices and crops compatible with the Australian environment;
promote management practices that include the workforce and unions because they are organically in touch with knowledge and expertise about production that cannot be obtained elsewhere;
restrict the present promotion of foreign investment and take-over of Australian companies as contrary to this economic vision;
oppose the further corporatisation/privatisation of key service utilities, such as water, power and communications, especially their sale to foreign ownership;
reform the present corporatisation/privatisation agenda to make community service and the public good the primary focus rather than rate of return on assets;
limit the value of salary packages and incentives for senior executives and managers where these promote a value system of excessive consumption and a culture of greed rather than community and environmental service.
make such salary packages and incentive bonuses subject to approval by employees and shareholders, with one vote per shareholder regardless of the number of shares held, and with contracts published; and
amend the Western Australian and Federal Constitutions to recognise local government and significantly increase its role and powers for sustainable development relative to the States and Commonwealth, with appropriate and secure access to the revenue needed for the new role.
Background
An unsustainable economy
Today's high consumption, capital and energy intensive, globally focused economy is no longer sustainable. Symptoms of this are slowing economic growth, high unemployment, job insecurity, destruction of the planet's living fabric and resource depletion. Others are rising crime, drug addiction, loss of community, a growing gap between rich and poor worldwide, unstable financial systems and growing mistrust of mainstream politics.
Competition drives consumption growth and wealth accumulation, and is made possible by the exploitation of fossil fuels. Economic globalisation is making transnational companies more influential than governments, with diminishing accountablity. The growing adverse environmental and social impacts are of peripheral concern to contemporary economics (popularly known as "economic rationalism") which regards these as "externalities". The depletion of the world's resources coupled with population growth is forcing radical change everywhere.
The growth in global consumption, population and material inequity must be reversed to achieve sustainability and provide for the needs of present and future generations within the finite resource of the earth. Sustainability will not be possible while poverty persists. This requires:
that the rich limit their consumption to allow the poor their fair share of the earth's resources;
eliminating population growth by ensuring economic security, providing basic access to education and health, and giving men and women greater control over their fertility;
re-defining the concept of wealth to focus on quality of life rather than capacity for over-consumption;
satisfying the needs of all without jeopardising the ability of future generations to meet theirs;
re-defining the roles and responsibilities of corporations to support these principles of sustainable development;
ensuring that the market prices of goods and services include the environmental costs of their production and consumption;
implementing mechanisms to tax and regulate speculative financial flows; and
encouraging local self-reliance to the greatest practical extent to create worthwhile, satisfying communities.
Local vitality, not global decay
An ecologically sustainable future requires changes in the way we think, the values we hold and the way we organise our economy. Current economic globalisation is a dangerous development as communities become dependent on long distance trade for basic necessities, which is only possible while there is abundant cheap transport fuelled by cheap oil. Populations can exceed the local carrying capacity of their environment. Long distance trade will inevitably become a marginal activity.
The future lies in revitalising local economies in ways that gear production mainly to what the local environment is capable of producing for local needs in the longer term. The focus will shift to labour intensive activities and thrifty use of resources. The world is not short of labour, but it has limited resources. Such local vitality based on appropriate scale technology favours small and medium business, more co-operative business ventures, the increased provision of local credit, and even local currencies. Extensive reforms to planning and taxation are needed, including policies that foster eco-villages, housing co-operatives and Local Exchange Transfer Systems (LETS) [1].
Opportunities for local participation in decision making foster strong democratic communities and a high degree of co-operation - the building of trust and goodwill that is vital to quality of life and real wealth creation. Environmentally friendly technologies and renewable energy are compatible with local economic development and would discourage wasteful use of resources such as excessive transport, useless packaging, junk mail, and conspicuous consumption - the "throw away" mentality of the consumer society. Local government would play a more important role.
A shift towards local vitality is necessary now. However, an over-populated world can only be fed today on the basis of inputs from the present industrial economy. The world's population must be allowed to fall to levels that can survive without these inputs. We cannot ignore the rest of the world in this restoration of local vitality. There will be a long transition period for such fundamental changes.
Sustainable economic development is about meeting people's basic needs and promoting human development. The Greens (WA) are concerned with quality of life rather than materialism and consumerism, "inner wealth" as well as "outer wealth". This economic vision is based on the core Green values of ecologically sustainable development, social justice and equity, participatory democracy and non-violence. These caring and co-operative values seek to advance the interests of all people as well as the earth.
General Progress Indicator (GPI)
The Australia Institute has constructed an alternative welfare measure to GDP known as the General Progress Indicator. The GPI modifies the market transactions used to compile the GDP by evaluating costs for the following factors:
personal consumption and income distribution (measures of unequal wealth distribution);
public consumption expenditure (eg defense, public order and safety);
value of unpaid household and community work, unemployment, underemployment, and overwork;
private expenditure on health and education, services of public capital;
commuting, transport and industrial accidents, irrigation use and urban water pollution;
climate change, air and noise pollution, ozone depletion in the stratosphere;
land degradation and of loss of native forests, depletion of non-renewable resources; and
crime and problem gambling, the value of advertising, net capital growth and foreign lending.
The GPI totals the components adding to general welfare and deducts the components detracting from welfare. The Australia Institute compares GDP and GPI per capita from 1950 to 2000 in the graph below. GPI was 92% of GDP in 1950 but only 46% in 2000 with a widening gap from the mid-1990s. Value judgements are used in compiling the components of GPI. By contrast GDP is restricted to the sum of all market transactions and ignores whether these add to or reduce welfare. GDP leaves out unpaid voluntary work and all aspects not a part of the money economy. More detail is on the Australia Institute's GPI website, www.gpionline.net. You can access their GPI compilation, putting in your own value judgements on the components and obtain your own interpretation of the GPI.
GDP's merit as a measure of welfare is now seriously deficient as a guide to economic policy. The pursuit of economic growth is more and more detracting from welfare. Indicators like GPI must become the measure of economic development in a sustainable direction, not GDP. GPI would lead to different economic and social priorities by giving much greater weight to social justice issues such as income distribution, quality of life and community development, thrift in resource consumption and maintenance of the environment.
Glossary
[1] LETS - A local trading system whereby a co-operative manages exchange of goods and labour services among its members on an agreed basis without exchange of money.
References
Australia Institute 2000. Tracking Well-being in Australia, The Genuine Progress Indicator 2000
Herman Daly & John Jr Cobb 1989. For The Common Good, Beacon Press Boston USA.
