It’s time for a new kind of economy

At the heart of Scotland’s problems is an economic model which is not working for the people of Scotland. First and foremost we need to fix that model if we want to tackle all the other problems and this is at the heart of Common Weal’s work.

This is a more easily read version.

This work is spread across so many different pieces of work its hard to summarise it all in one place. A good starting place is Resilience Economics or the shorter summary report. Our existing economic model is based on a ‘magic bullet’ theory that if only we can grow GDP (a crude measure of the size of the economy) faster and faster then everything else will fix itself. But GDP has been rising relentlessly for most of the last 40 years and yet the problems keep getting worse. This is because measuring quantity without measuring quality is bound to fail. It’s not about how big an economy is, it’s about what it does and how it does it. If an economy delivers all the right outcomes for society and the environment and it grows, brilliant. But if it delivers these things are doesn’t grow (or even shrinks a bit), that brilliant too. The obsession about size is what has driven environmental collapse and every-growing economic inequality.

Video: Robin McAlpine discusses Resilience Economics

So what should we do instead? First of all we have to stop believing there is a single ‘magic bullet’ because there isn’t. We need to measure all the things an economy should do – creating good jobs and salaries, growing a domestic industry base, making and doing useful things, protecting the environment, strengthening communities and our democracy and much more. It is this we have to measure and this by which we should judge our economy.

But then what? How do we replace the practices of magic-bullet growth economics? Well not with another magic bullet solution. There are dozens of well-established or rapidly-growing schools of economic thought which go beyond growth. There is Foundational Economics (recognise that economic success is built on high-quality public infrastructure), Wellbeing Economics (measuring and assessing economics on its outcomes), Modern Money Theories (new ways to manage a country’s resources), circular economics (a kind of environmental economics based on highly-efficient use of resources), the Entrepreneurial State model (where the state does more than just manage but actively intervenes in the economy to improve it) and many more. The reports explain all of these and how they would work.

But if we have this economic framework in place, how do we use it? There are two versions of how to answer this published by Common Weal. An Investment-Led Economy explains how this could all be used in an independent Scotland.

Animation showing why an investment-led economic strategy is best for Scotland.

The other is Resilient Scotland (Part 3), an emergency economic development plan which was produced because of Covid. This focusses on how Scotland can use its human and natural resources rapidly to grow an industrial manufacturing base serving new green industries and make a wide range of interventions in the economy to strengthen domestic manufacturing and other productive businesses. A key part of it is recognising that it is long supply chains (importing goods from far away which we could perfectly well produce ourselves) which have created so many social and environmental problems and that these are becoming more and more vulnerable and that we must learn to make more of what we consume in Scotland again The overall report covers such a wide area of activity that it is not possible to summarise it all here, but is an inspiring vision for what Scotland could achieve. But it needs an industrial strategy. That is explained in Resilient Scotland but Common Weal has also published another report on the principles that should underpin an industrial strategy.

So what would all this look like in the future? Here we turn to the Common Home Plan, Common Weal’s comprehensive, costed Green New Deal. Again there is too much in it to summarise here but you can find out more in the video below. It describes a thriving circular economy in Scotland giving everyone access to even more first rate goods and services but without the waste, all powered by an advanced renewable energy sector and a new housing settlement for everyone in the country. It would create tens of thousands of productive, high-quality jobs and transform our land.

Video: Our Common Home, the comprehensive costed Green New Deal that led the way.

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