Overview —

Why a superficial approach to Wellbeing Economics will fail


Prof Iain Black

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While is is encouraging that the Scottish Government and senior figures in Scottish politics are discussing or adopting ideas around the Wellbeing Economy (See, for example, Common Weal’s policy paper “Giving Substance to the Wellbeing Economy: A Discussion Paper”), many of them misrepresent the idea of wellbeing economics by remaining coupled to “GDP Growth” as a metric of “success” in the economy. This often occurs without considering that the pursuit of economic growth is, in part, a cause of reduced wellbeing in the form of poverty and environmental damage. In essence it is like measuring success in a game of football by counting the number of player injuries. This paper critiques that approach and reiterates that an approach to economics that increases as maximises wellbeing must do so despite and regardless of the impact this approach would have on growth.

Key Points

There has been much written and said about a Wellbeing Economy, unfortunately there are numerous examples of where the ideas presented are weakly related to the actual detailed work on what a Wellbeing Economy is or how to get there. Indeed, some of it presented recently in the independence supporting media, is profoundly confused.

― This has resulted in the term ‘Wellbeing-Washing’ being coined. This describe situations where the language of wellbeing is appropriated by design (or otherwise) to justify or reinvent existing neoliberal economic visions or where it is used for political purposes as a fashionable label under which to gather.

― This matters because before we can make strong progress towards a wellbeing economy, we must have a shared understanding of what it is and how to achieve it.

― Wellbeing is not an ‘outcome’ which can justify any means of delivering it. Wellbeing approaches based on our current economic model will not address the damage they cause including climate change and poverty.

― In a wellbeing economy, the economy is explicitly recognised as being subservient to the planet and society’s needs. The economy delivers the needs of society and ensures planetary health.

― A wellbeing economy changes our economic system by changing the system goals. Systems goals matter because they can bring about profound change, quickly. This happens because all the infrastructure, institutions, materials, and processes within a system act to achieve the goal of the system. Changing the goal means all these elements of a system then move to work towards this new goal.

― The systems goal for a wellbeing economy can be understood as ‘delivering social justice on a healthy planet’. This is achieved through ‘designing in’ the principals of Fairness, Dignity, Purpose, Access to nature and Participation. When these are hard wired into our economy through all the structures, policies and incentives used to build it, they create personal, community and societal wellbeing on a healthy planet. A wellbeing economy is therefore about how we design and do things, not just the results.

― Our current economic system goal is growing GDP which ‘designs in’ ecological and social failures through its exploitative principles. It needs to exploit nature to make all the ‘stuff’ used to satisfy needs and wants. It seeks to exploit labour by seeking lower cost through lower wages and regulation. Our current system goal therefore creates harms including poor health, poverty and climate break down. Harms we in Scotland spend billions of pounds mitigating.

― An economic vision focussing on GDP growth contains within it the drivers which harm progress on other indicators. This produces a feedback loop – no matter how much you grow GDP, the cost of mitigating its harm grows at the same rate so the gap remains.

― The concept of differentiating ‘good growth’ from ‘bad growth’ has been examined for years and is not supported by the academic literature. The primary problem is that this is a subjective judgment, and the process of politics is capable of redefining any growth as ‘good’, or ‘sustainable’ making the differentiation meaningless.

― This concept of ‘good growth’ takes its fullest form in the concept of ‘decoupling’ which is used to justify business as usual economics and government. Decoupling refers to trying to separate the need for physical inputs like materials to create economic growth (so, seeking to not use as much ‘stuff’ per pound of GPD produced) and seeking to separate economic growth from the pollution its create (less greenhouse gas per pound of GPD produced).

― But this ‘decoupling’ has not happened at anywhere near the rate it needs to and there is little available evidence to provide any confidence that it can ever work – and the planet is too close to tipping points to try it and wait to find out.

― Another area in pressing need of ‘decoupling’ is the belief that poverty is cured by GDP growth and is not a structural issue that is caused by the growth economy. In the end, 50 years of GDP growth have resulted in the same relative proportion poverty as beforehand. Poverty is a much wider issue than can be solved by increased benefit payments or subsidising the cost of providing public services.

― Focussing on energy transition is important but greatly insufficient to address the climate crises. Our current technology first approach to Just Transition and Net Zero are perpetuating our energy dependency on the oil and gas majors. This will perpetuate the cost-of living crisis caused by being dependent on them for energy rather than localised, solutions in which communities have a stake and directly benefit.

― We can only address the climate crises by replacing the goal of our economic system, recognising that we live on a finite planet that cannot supply an ever-increasing desire for material abundance (irrespective of energy source) and that we must distribute goods and services equitably in order to achieve climate justice.

― Finally, there is an enormous disconnect between the measurable scale of the impact of climate change to humanity and the scale of the action being taken. One crucial area where the Wellbeing economy vision can be improved is to add a principle as to how change must be enacted. Crises can only be addressed through crises response and this requires emergency governmental response of the type seen during pandemics or conflict.

― Adapting existing economic orthodoxy or enacting a wellbeing economy using business as usual forms of government, governance and decision making will not work to address the crises faced in the time left to do so.

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