Four Home Truths About The Struggle To Build A Sustainable Economy

A new book by four leading lights of the sustainability movement tells us much about the state of our struggle to create an economy in service to life.

One of the blurbs on the back cover of A Finer Future describes it as an ‘entry ticket to the movement for sustainable well-being and a better world.’ And that it is. The book may be short on original ideas, but it is an impressive synthesis of much of the best recent thinking on everything from regenerative agriculture to regenerative economics.

Though the tone of the book is mostly hopeful, it did not leave me feeling particularly optimistic. Rather — both in what it says and in what it fails to say — it’s a stark reminder of just how steep a mountain we have to climb in order to build an economy that does not undermine the social and environmental systems on which we all rely.

Here are my four key takeaways:

  1. A HANDY analysis of the perils of continuing on our current trajectory

That we are headed towards a cliff edge has been the conventional wisdom of the sustainability movement for at least fifty years. The original Limits to Growth study of 1972 used then state-of-the-art system modelling techniques to show that, assuming the global economy continued to grow indefinitely without decoupling in absolute terms from resource consumption and ecological impact, civilisation as we know it would essentially collapse before the end of the 21st century.

The authors of A Finer Future, like many others, warn that we are right on track to hit the buffers in the next few decades. They cite a 2015 NASA-funded study into the history of civilisational collapse — the ‘Human And Nature Dynamical’ (HANDY) study — which found that, under conditions ‘closely reflecting the reality of the world today… collapse is difficult to avoid.’

The HANDY study identified two underlying causes that have been present in every single case of collapse over the last 5000 years: ‘the stretching of resources due to the strain placed on the ecological carrying capacity’ and ‘the economic stratification of society’. This is exactly where we are now.

Our fate is not yet sealed, but the stakes couldn’t be higher. Defusing these two timebombs — ecological overshoot and rampant inequality — is, in Buckminster Fuller’s words, ‘humanity’s final exam.’ There are no resits if we fail.

2. Ownership matters

One of the themes that lurks hidden beneath the surface in this book is ownership. It rears its head occasionally, as, for example, in the story of Interface, the carpet tile manufacturer founded by the late Ray Anderson, a pioneering industrialist who became, in the 1990s, an early champion of the need to do business in a way that does not undermine the natural systems on which we rely.

‘Ray’s effort to make Interface the most sustainable company on Earth was far from easy,’ the authors write. ‘Investors thought he’d lost his mind… [but] because Ray owned 51 percent of the company, he could stay the course.’

Another line much later in the book hints at the same issue: ‘many of the best renewables programs in the United States are run by municipal utilities, while the investor-owned utilities have to be dragged kicking and screaming into the solar age.’

These are not isolated examples. Consider another (not from the book): Danish energy company Ørsted transformed itself from a fossil fuel giant to a leading provider of renewable power in less than a decade. This was only possible because its majority shareholder through the transformation period was the Danish Government, which meant it had an owner willing to be patient through a prolonged period of depressed earnings. Without that buffer, the markets would likely have forced Ørsted to stick with its existing business model, screwing the planet but returning more cash to shareholders in the short term.

And is it entirely coincidental that Novo Nordisk and IKEA, two of Europe’s most consistent corporate sustainability leaders, are both foundation-owned? I don’t think so. Ownership, in the words of Marjorie Kelly, author of Owning our Future, is ‘the underlying architecture of our economy. It’s the foundation of our world. How ownership is framed is more basic to our daily lives than the shape of democracy.’

The more I reflect on the question of why most companies today are failing to serve people and planet, the more I am drawn back to this issue of ownership. It simply isn’t feasible for a publicly listed company, however well-intentioned, to place the same importance on its social and environmental bottom lines as it does on its financial bottom line.

The nature of the way public markets are structured means that short-termism isn’t a bug: it’s a design flaw. Doing away with public ownership (at least as currently configured) may turn out to be one of the prerequisites for creating an economy in service to life.

3. It’s the politics, stupid

Ownership is just one of the foundational structures of our economy that needs to be redesigned. So too does taxation: the authors of A Finer Future call for a shift away from taxing labour and income towards taxing instead ‘those activities, like excessive energy and resource use, that are undesirable.’ And welfare: they advocate implementing some form of Universal Basic Income. They want to transform the goals of economic policy: from maximising GDP and labour productivity, to maximising societal wellbeing and resource productivity.

Unsurprisingly, given this wish-list, they come to the conclusion that ‘only governments backed by strong public support can bring about the scale of change needed.’ This is an uncomfortable insight because the sustainability movement’s track record of engaging effectively in politics is poor.

In part, this failure is a symptom of neoliberalism’s success: ‘the neoliberal narrative has been extraordinarily successful in convincing us that our governments are inefficient, ineffective, and unnecessary.’ Too many smart, committed, progressive people have turned their back on politics and public service because all they see is dysfunction. In doing so, they — we — have ceded an easy victory to the ideological zealots of the “free” market right.

We can’t afford to stay disengaged any longer. It’s time for ‘you and me and all who would craft a finer future to get our hands dirty in the contact sport of politics.’

4. Hope is not a strategy

The story of neoliberalism’s rise has been told many times. The Dutch historian Rutger Bregman includes it in his book Utopia for Realists, pitching it as a tale about how ideas really can change the world. A Finer Future tells it too, but here it has a different moral: strategy and organisation are what change the world.

The crux of this particular telling of the story is a little-remembered 1971 memorandum by an American corporate lawyer (later a Supreme Court justice) called Lewis Powell. Powell was commissioned by the US Chamber of Commerce to develop a strategy for re-legitimising big business in the wake of the radical, anti-corporate turn that US politics and culture took in the late 1960s. The resulting memo advocated building up the business community’s political power and using it ‘aggressively and with determination’ to promote a “free enterprise” agenda.

‘Strength,’ Powell argued, ‘lies in organization, in careful long-range planning and implementation, in consistency of action over an indefinite period of years, in the scale of financing available only through joint effort, and in the political power available only through united action and national organizations.’

At the time, neoliberal ideas had been around for at least a quarter of a century — the Mont Pelerin Society, of which Friedrich von Hayek and Milton Friedman were the leading lights, had first met in 1947 — but had had little impact on mainstream politics. Within a decade of Powell’s memo being published, Reagan and Thatcher were in power and neoliberalism’s takeover was practically complete.

How did this happen? ‘A variety of foundations and donors assembled staggering amounts of money to implement the strategy that Powell had laid out.’ In Washington DC, think tanks were set up to prepare the neoliberal policy agenda. In California, the Pacific Legal Foundation set about embedding the concept of tax cutting and protection of property rights into California law. It also groomed a young actor called Ronald Reagan for public office. Across America, marketers were hired to help sell the neoliberal message to ordinary citizens. Political institutions at all levels — from local school boards to national broadcasters — were targeted.

Taking the Powell Memorandum as their inspiration, a group called the Wellbeing Economy Alliance has drafted the Meadows Memorandum (named after Donella Meadows, the late systems thinker and lead author of Limits to Growth). The trouble is it’s more of a wish-list than a strategy. The Meadows Memorandum is symptomatic of a wider failing of the modern sustainability movement: we are utopian about the ends to which we aspire, but too often squeamish and vague about the means of getting there.

It’s time to stop pretending that hope and a compelling vision of a better future are all we need. Political revolutions are not, on the whole, self-organising. Political will is not some magical emergent property: it’s something we have to manufacture and invest in.

Let’s get to it.