The Best Way Forward after COVID-19?
The attention of several members of Science for Peace has recently been drawn to a Dutch Manifesto prepared by 170 scientists, intended to make the Netherlands more sustainable and fairer after the present Coronavirus emergency. The manifesto’s proposed program has been translated by Google and goes (with a bit of necessary help from me) as follows:
1) Replace the current development model aimed at generic growth of the GDP, through a model that distinguishes between sectors that should be allowed to grow and will need investments (the so-called crucial public sectors, clean energy, education and care) and sectors that need to shrink radically, given their unsustainable nature or their role in driving excessive consumption (oil, gas, mining, and advertising).
2) Develop an economic policy aimed at redistribution that will provide: a universal basic income, embedded in solid social policy; strong progressive taxes on income, profit and wealth; shorter working weeks and job sharing; and recognition of the intrinsic value of healthcare and essential public services such as education and health care.
3) Transition to regenerative agriculture (which is sustainable), together with emphasis on the conservation of biodiversity, mostly local food production, reduction of meat production, and employment with fair working conditions.
4) Reduce consumption and travel, with a radical decrease in luxury and wasteful forms, towards necessary, sustainable and meaningful forms of consumption and travel.
5) Cancel debts, mainly of employees, self-employed persons and entrepreneurs in small businesses, but also those of developing countries (to be carried out by both the wealthier countries such as international organizations such as IMF and World Bank).
It is tremendously encouraging to read anything as nearly complete as this Dutch proposal, which is surely tailored to the requirements of the Netherlands, even if some of the thinking is global. The general lack of such proposals from elsewhere must surely have played a role in retarding the world’s progress to sustainability and toward dealing with climate change. The comments that follow will indicate that the problems of the Netherlands are not identical to those of other nations, though some parts of their writing will prove general. The Netherlands, one of Europe’s most densely populated areas, faces the additional challenge that much of its land will be threatened by ocean-level rise within the next century. At the same time, the Netherlanders have an admirable unity of thought, and esprit de corps.
While the statement addresses what should change as the Netherlands comes out of the coronavirus emergency, the resemblance to what should be done to address climate change is unmistakeable, so that we must congratulate those scientists for the way they have made the recession of the virus into an important opportunity for a determined start to the transition, as it is now widely called.
The five numbered paragraphs:
1. Because this paragraph focuses on growth and degrowth, it is important to have a meaningful index of growth, and GDP is known to be a poor index. The case against GDP has been made by very many authors; at root is the fact that it deals only with money, and how much of it changes hands during any given period. Other indices have been developed and studied, which focus more on wellbeing, among which the Genuine Progress Indicator (GPI) has found favour in 20 states of the USA that have adopted it as their economic measure. The GPI incorporates 26 components, including the GDP. In North America, at least, it would appear that the GPI is ready for widespread adoption. In the Netherlands, the scientists need to rethink how they will measure the success of their economic reforms.
Regarding the sectors, “clean energy” would require me to write a whole chapter; instead I ask, is any major energy conversion sector really clean? Likely water and wind energy are the cleanest, though modern windmills are known to kill birds and bats, and I see no real effort to cure that ill, though it can surely be achieved through modest redesign. Solar panels also have their disadvantages, one of which is that they change the local ecology, especially when covering of large areas of land or water.
The need to eliminate fossil-fuel burning does not require comment, except that the oil and coal industries also produce raw materials for manufacture rather than burning. Oil and coal extraction will not, therefore, diminish to zero.
Mining is a special case because, for example, sometimes large amounts of copper ore could be needed for the electrification of whole districts that have no electric power whatever. This is doubtless unimportant in the Netherlands, but could be important in several third-world countries. The secret behind not mining more than the world needs was made known in an important statement by retired US economist Herman Daly, some years ago:
abolish sales taxes and tax on services, and tax only extraction
(implicitly including trees, because, though renewable, they take 80+ years to grow to maturity). If the tax is set just high enough to make recycled material cheaper than new, recycling will be maximized.
The Dutch scientists have duly recognized that advertising has brought on over consumption, but I believe that the long-term remedy is other than mere reduction in the amount of advertising. One needs to bear in mind that the objective of the current economic system is and has long been to maximize the GDP. The two general methods of achieving this were advertising (to increase consumption) and the manufacture and sale of arms. The needed changes in advertising must therefore be qualitative, and will amount to a huge change in the focus of the entire advertising industry—its reformation. In the short term, however, forcing a reduction in the volume of advertising might be practicable and could be useful following the decline of the coronavirus pandemic. This would imply subsidizing all important media now dependent on advertising. My preference, however, would be to see the needed, long-term qualitative change begin at once, in addition to any short-term measure. A win-win compromise might be to limit advertising by law, and permit its expansion again under new rules that would focus on ecological health (including human health) as a goal of advertising. Lastly, advertising is one of only two sectors of the economy needing change in which there has been no progress whatever toward economic sustainability.
2. A basic universal income is surely desirable but needs to be instituted when the time is right. The emergency of WWII gave everyone employment in the countries engaged in the struggle, so grave was the threat to all participants. The climate emergency we face likewise would create huge amounts of new employment, if only people and governments had faced up to the emergency. In the Netherlands, the dykes will need huge enlargements and reinforcement. More generally, across the world, we have to eliminate greenhouse gas emissions, but we have to revise our extravagant ways and learn to live on what the earth can supply renewably. And this requires a lot of new work. To enable the transition to a sustainable economy to take place, there have to be projects ready in advance to employ those who will lose employment as the petroleum and coal industries scale down operations. We cannot rely on renewable-energy industries to hire all those who will lose jobs in other industries. We need (in North America) to increase greatly the acreage of organic farms and this requires labour, and we need to do much more to restore the forests, lakes and rivers to a condition we could be proud of. The list of important new projects is long. If and when the economy becomes sustainable, we might enter an age when there really isn’t essential work for all the world’s work force, in which case the first thing to do is to reduce working hours somewhat. Some time during the full employment era will be the occasion to introduce a guaranteed income (GI). But beware: very few of those who have proposed or openly favoured a guaranteed income have done the costing, which is complex. And it costs an arm and a leg if the unemployment is anything but minimal. A continuing policy of full employment will be highly desirable, if not essential. It was found in a GI trial (in Manitoba, 1974-78) that people didn’t quit their jobs because there was a guaranteed income, though some women took a little longer maternity leave after childbirth (see my article, “Guaranteeing Income” in The Bulletin of Science for Peace, Fall Issue, 2012).
3. I agree about regenerative farming, and my second edition recommends that a transition to it be subsidized. Probably the subsidies should continue during the years of soil enrichment until the produce can be certified organic.
4. I agree that this is a desirable short-term measure. In the longer term, there are several possibilities of affordable, non-emitting technologies that could replace the present highly emitting systems of air and ocean travel.
In the Netherlands, bicycles are used at all times of year, and the bicycle is the most efficient means of land travel yet invented. Land travel in general could be made emissions-free by 2040, through national policies (see my book, A Leap to an Ecological Economy, second edition, chapter eight). But note, it’s too late for carbon taxes to bring this about.
5. This proposition reads like a set of immediate needs in the Netherlands plus a broad, helping hand internationally. I think more is needed. The whole question of lending at interest (usury) has a long, bad history, and it has been suggested more than once that interest rates should drop, possibly to zero at a certain stage in the repayment of debt, for example, when the total money already repaid (including the interest) has equaled the original loan. For a general reference see The Ecology of Money: debt, growth, and sustainability, (2013) by Adrian Kuzminski, a former Board member of Science for Peace. Adrian’s book contains about 30 references to interest rates. New rules have been proposed often enough, but there’s never any action, except when some bright spark recommends eliminating debt to 3rd-world nations. A sensible rule on interest could have forestalled a lot of suffering, at home and abroad. The new rule should be universal in the sense that it would apply to credit card debt—something that has brought many to the brink of ruin or to ruin itself—and to loans other than bank loans. The new rule is defined qualitatively in my book under the subheading, Principles in New Economics (on p.28):
Loans, especially to poor people or poor countries must be made on terms that render them repayable without unacceptable social cost. [It could turn out to imply that some such loans would have to be made at nominal interest by national banks.]
It is not the business of any lending agency to determine the social policy in a borrower country. Such interference violates the Principle of Life.
The World Bank and the IMF are children of the old economy that we must try to replace. Their ties to Wall Street, dating from their foundation, prevent them doing what is really needed of them, except by making every act into an exception to the rules. I believe that the goodwill is usually there to do this, but a new constitution would be much preferable. The BRICS countries’ New Development Bank might be worth studying.
A final point worth remembering is that there have been agreements with the Bank of International Settlements in Basle regarding how banking is to be done. Because we are living in the climate-change emergency, some rules should simply not apply at present; one such rule is that nationally owned banks, such as the Bank of Canada may not issue new money at zero interest. It will be essential to forget that rule during the emergency. Maybe that rule shouldn’t be brought back, even after a sustainable economy has been achieved!
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Human population (not mentioned in the Dutch document) is a major component of concern worldwide. Population has an interrelationship with all other crucial issues, and therefore a population policy must be on the agenda of any long-term plan for sustainability. For the purpose of planning how best to come out from the coronavirus threat, which is a short-term concern, it may be justifiable to omit population growth initially, but I would recommend not leaving it out for long. The same applies to reducing militarism and military-industrial production.
My thanks for suggestions and assistance go to Bill Browett, Richard Sanders, and Phyllis Creighton.
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Derek Paul is a physicist, prof. emeritus, University of Toronto, and a co-founder of Science for Peace (1981). He has published in many fields including climate change and economics, and is a member of two physical societies and of the International Society for Ecological Economics.
Copyright ©Derek Paul 26 April 2020