No 2099 Posted by fw, November 15, 2017
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Just to recap the first three sections of Chapter 8 —
In his Section 1, an Introduction to Chapter 8, “Foundations for the Economy of Tomorrow”, British ecological economist Tim Jackson, states the aim of the chapter: “to delineate the framework of a process leading to “systematic re-construction of economics that offers both meaning and hope to the idea of social progress.’”
In Section 2, titled “Enterprise as service”, Jackson points out that “Thinking in terms of services reveals new ways to decarbonize or dematerialize human activities. … It is ultimately services rather than stuff that matters to us, whether this is in nutrition or housing or transport or health care, or education, or leisure. Almost all of our needs can be cast in terms of services.”
In Section 3, “Work as participation”, the author continues to focus on the importance of services in delivering economic prosperity without a carbon-heavy footprint. Service-based vocations, Jackson contends, “have the potential to restore the value of decent work to its rightful place at the heart of society.”
In my synopsis, below, of Jackson’s Section 4, titled “Investment as commitment,” he assesses the potential massive investment burden required to transition from today’s “time-poor, materialistic, supermarket economies” to material-light, employment rich, service-based activities. He notes that, at present, too much investment flows into three sectors of the conventional economy: 1) extraction of finite material resources; 2) chasing labour productivity improvements; and 3) relentless pursuit of new markets for new novelty consumer products.
He calls for “reframing” our investment strategy, and proceeds to list the kinds of assets that will be needed to attract investment to fund his vision of prosperity without growth, as detailed in his book. At the end of the section, Jackson acknowledges that it’s not yet clear what impact this “vast new portfolio of investment might have on ongoing economic performance.” Nevertheless, “the indispensability of the strategy outlined here is blindingly obvious.”
Transitioning from today’s “time-poor, materialistic, supermarket economies” to material-light, employment rich, service-based activities, demands investment, says Jackson in his opening to Section 4.
“Investment,” he emphasizes, “is the vehicle through which we build, protect and maintain the assets on which tomorrow’s prosperity depends.” However, currently, too much investment flows into three sectors of the conventional economy: 1) extraction of finite material resources; 2) chasing labour productivity improvements; and 3) relentless pursuit of new markets for new novelty consumer products. The result, deplores Jackson, “is a portfolio of capital investments dominated by the production and reproduction of consumerism. … The vital relationship between the present and the future is distorted through lenses of speculation and short-term profiteering.”
To support a vision of prosperity advocated in his book, Prosperity without Growth, Jackson calls for “reframing” our investment strategy, emphasizing the crucial difference between the existing and proposed strategies:
“The critical distinction is to invest in assets that maximize our potential to flourish with the minimum level of material consumption, rather than in assets that maximize the throughput of material commodities – irrespective of their contribution to long-term prosperity.”
Here, then, is his list of the kinds of assets needed to attract investment funds to revised vision of prosperity:
For baseline prosperity needs – nutrition, shelter, and mobility, (ideally focusing on service-based activities);
Investment in health, education and social care;
The “infrastructure of civic life”: schools and hospitals, public transportation systems, community halls, quiet centres, theatres, concert halls, museums and libraries, green spaces, parks and gardens, and the like;
Without question, massive investment must continue in a transition towards “renewable energy, energy efficiency, resource productivity, and clean technologies” — while simultaneously divesting from the fossil fuel energy sector, which will free up funds for these low carbon alternatives. This transition is a formidable challenge; and
In addition, the UN has called for investments to protect and enhance natural infrastructure: “forests, grasslands, arable land, wetlands, lakes, oceans, soils and the atmosphere itself are all essential in providing the services on which life itself depends.”
Jackson acknowledges that it’s not yet clear what impact this “vast new portfolio of investment might have on economic performance.” Nevertheless, “the indispensability of the strategy outlined here is blindingly obvious.”