How is this New Economy? Economists are beginning to lay out some of the disparate strands of evidence to present a vision of a transformative economy. Jacob Debets writes the first NEJ Book Review on The Economics of Arrival, by renowned new economy writers and researchers Katherine Trebeck and Jeremy Williams.
The premise of Katherine Trebeck and Jeremy Williams’ new book The Economics of Arrival boils down to the following: (1) the concept of endless growth as the overarching goal of an economy is unsustainable and misguided; (2) the world’s richest countries (including Australia) have Arrived at a place where continued expansion is incapable of -- and indeed antithetical to -- the resolution of its social and economic problems; (3) if the benefits of growth were distributed more fairly, a decent standard of living could be universal; and (4) nation states should re-orient their economies around maintenance, qualitative improvements, sharing, fragility and adaption to natural limits, which they term making ourselves at home.
Trebeck and Williams’ critique of infinite growth, and in particular mainstream economists’ obsession with GDP as the metric for a nation’s overall health, is a familiar one to critics of neoliberal orthodoxy. However, the framework that they apply for disrupting this paradigm -- and the nomenclature they propose for understanding and implementing a genuine alternative to ‘unaimed opulence’ -- is both accessible and compelling.
Meticulously researched and comprehensive, The Economics of Arrival begins by describing the unprecedented rise in living standards that occurred in the aftermath of World War II, tracing these improvements to the deliberate investments governments made in public institutions and infrastructures commonly credited to Keynesian economy theory. These ‘fruits of growth’, stress Trebeck and Williams, were widely shared, precipitating global reductions in poverty, infant mortality, interpersonal violence and homicide in addition to boons in adult literacy and the elevation of women in politics and the workplace.
This ‘good growth’ is then immediately compared to its pathological or cancerous counterpart, being growth that is celebrated despite having net negative consequences for society and the environment. Examples of this include a rising housing market that reinforces intergenerational inequality and prices out millennials; rising markets for automobiles that create congestion and environmental damage; cheaper and more available energy that ignores planetary boundaries and contributes to a destabilised climate; the explosion in ‘status goods’ that do not create more wellbeing or quality of life; and a more productive and efficient workforce that sees less and less of the surplus value that its labour creates. These forms of growth are unsustainable in the long term, and yet our politicians remain fixated on the growth agenda even whilst the benefits ‘trickling down’ to the working and middle classes become harder to discern. The fruits of growth are rotting, and the electoral machinery that may otherwise have been capable of reversing this trend is clogged by lobbyists, creating a feedback loop between the inequalities of power and a democracy that is recalibrated to only respond to pecuniary inputs.
Having thoroughly explored the costs of ‘growth compulsion’, including the onset of ‘defensive expenditures’ (those that are necessary in order to mitigate the problems the system creates, such as on corrections, homelessness and climate-related costs), Trebeck and Williams move to a discussion of its alternative: a society which prioritizes the quality of an economy instead of its size. Borrowing from Kate Kaworth’s ‘Doughnut Economics’, they underscore the need for society to respect its ecological ceiling and uphold its social foundations whilst re-purposing the concept of ‘development’ so that it looks primarily to qualitative improvements. Amongst the many interrelated possibilities that might open up once we make ourselves at home are:
- Sharing and pre-distribution: dividing up capital ownership and endowments more fairly across society by, inter alia, creating more inclusive/democratic forms of business, increasing minimum wages and facilitating access to Universal Basic Assets (e.g. housing, healthcare, educations and digital assets)
- Shared and better work: tackling the win scourges of unemployment and over-work by exploring shorter working weeks, resource-productivity and worker-ownership
- Fulfilment beyond consumption: supplanting consumerism that is based on possessions with a more holistic conception of a good life, prioritising experiences, community and a materialism that cherishes goods by reusing, recycling and repurposing them.
- Stewardship of the commons: harnessing innovation and creativity to provide better stewardship of the earth’s resources, framed by a commitment to Herman Daly’s three criteria of sustainable development, which are: (1) exploiting renewable resources no faster than they can be regenerated; (2) depleting non-renewable resources no faster than alternatives can be developed; (3) emitting wastes no faster than they can be assimilated by ecosystems.
- A circular and collaborative economy: eschewing the orthodoxy of the ‘linear business model’ (where goods are discarded and replaced) by shifting to a circular economy (where goods are leased, repaired and recycled).
- New business practices: addressing the corrosive impact that of investor owned corporations and their narrow pursuit of profit has had on society by facilitating pro-social business forms like cooperatives, worker-owned companies and neighbourhood corporations.
The closing chapters of The Economics of Arrival are oriented around ‘proof of concept’, with Trebeck and Williams offering real-world, albeit usually isolated, examples of customs and initiatives that reflect a commitment to Arrival, before exploring how these might be connected, expanded and amplified to advance structural change.
A more holistic concept of ‘development’ is offered, borrowing principles from around the world that counter the West’s individualist ethos and underscore the value of community, mutual aid, collective wellbeing and the rights of nature. Japan and Costa Rica are presented as limited blueprints for Arrival based on their performance on the Social Progress Index despite having smaller economies and (in the case of the latter) a low rate of consumption. The Netherlands’ commitment to shorter working weeks is earmarked as a potential first step for achieving full(er) employment and achieving better work-life balance across the board.
These and other initiatives then need to be enthusiastically – and perhaps, in some cases, aggressively – promoted by civil society, business, communities, politicians and individuals. The failures of our existing paradigm, including its ignorance of planetary boundaries and disconnect from the needs of the people, must be loudly and consistently highlighted. Alternatives must be promulgated until they reach critical mass. Existing power structures must be harnessed and recalibrated.
There is nothing about Trebeck and Williams’ analysis that shies away from the enormity of what they are proposing. But by combining a devastating critique of our current status quo with a comprehensive, convincing and practical framework for an alternative society, one is left feeling hopeful and empowered.