We have handed control of the economy to a very small number of people. How do we create an economy which works for the wellbeing of all within environmental limits? We need to capitalise on the work already done on the financial sector to discredit the dominant economic narrative; and to reframe the debate with a new narrative that tackles finance, inequality and the environment, so we can then take back control.
Control of the monetary supply has been captured by the financial elite through credit creation by banks. There’s a correlation of money, consumption and emissions. We’ll need a lot of money to transform our economy, so we need to understand. How can the monetary architecture be changed to create a low carbon sustainable economy?
We should use the crisis to shift the way people think about the economy, which cannot keep growing within physical limits of the planet and anyway hasn’t made us happier. Why are the poorest suffering through austerity and why have conditions of employment been attacked in order to provide public money to the bankers? Devotion to the financial markets prevented us from making the investments in the green economy that would benefit us all.
The drivers of increasing economic inequalities such as changing household composition, rent seeking, decline of trade unions, technical change and those at the top taking an ever larger slice of the pie. The difference in life expectancy and other social ills which are associated with income inequality. Tackling income inequality is crucial in tackling health inequality. We should also look at pension fund management and high intensity trading.
Alternative economics theories have yet to coalesce around a dominant consensus in the way that proponents of neoliberalism have achieved. Where is the common ground and what are the key components and tensions within alternative economics? A look at full employment, de-growth, relocalising the economy, sustainable livelihoods, a living wage and low carbon society.
The financial sector is an unstable system which is harmful to the real economy. Financialisation of has contributed to deregulation and privatisation, rising inequality, continuing investment in fossil fuels and slower growth. Casino capitalism, high frequency trading, demutualisation, deregulation all have an effect. Ideas about how we should restructure and regulate the financial sector so that it serves the real economy rather than its own short term interests.
Where does money come from? 97% is created by banks from nothing and they decide for what purpose it is be used. How does this process work, what are the rules that govern it and what are the flaws in the theory that inform it? The creation of money needs to be controlled to reduce harm and encourage productive and environmentally sustainable development. Creating a system which doesn’t do harm including a network of local banks, kick started by local authorities.
Tax is at the heart of the change in society that we want to see and a key pillar of democracy. They say tax will drive out the wealth creators, but it is the ordinary people who create wealth using the infrastructure created by tax. There is a need to reorganise our economy, redistribute, re-price upwards bad things like carbon and re-price downwards good things. This means we need to collect more of £100bn tax dodged each year.
How do we reinvent public ownership for the 21st century? Why should private ownership and market relations be sacrosanct? Privatisation led to concentration of ownership, mainly by foreign investors. The result is an energy sector that has faile on price, energy security and decarbonisation. The Eruopean trend to re-municpalisation and the community ownership structures in Germany and Denmark give examples of how energy can be run for the common good.
There are diverse schools of economics; here are some of the reasons why we should not rely on the mainstream neo-classical economics which prevails in most universities; and some suggestions about how the situation might be changed within Scotland
on some of the policy opportunities available in Scotland
describing Oxfam’s doughnut diagram of the environmental limits within which Scottish society needs to live and our social foundations – a range of domains that ensures everyone has the resources they need to live a good life – the evidence is that we are falling short.