The Economics of Enough_ How to Run the Economy as if the Future Matters - Diane Coyle [11]
Sustainability includes our impact on the natural world but it has other dimensions too. The threat of disruptive climate change is not the only problem with economic growth as we experience it now. Our political and social arrangements haven’t adjusted to the fundamental changes in the structure of the economy that have occurred in the past two or three decades. Information and communication technologies have radically reshaped how goods and services are produced in the leading economies, leading to phenomena such as globalization, changing patterns of skills and work, the demise of some businesses and restructuring of others. These effects are bigger than those of steam or electricity, reflected in the fastest declines in price and increases in quality ever recorded for a new technology.4 The impact of the technologies has been and continues to be profound. Their potential benefit to our prosperity and welfare is enormous, but so too is the disruption to jobs, businesses, and the institutions which govern us. Political and social arrangements and institutions have not kept up with the economic changes.
This gap between the underlying technology and economic events and the capacity of governments and others to deal with them was brought into focus by the financial and economic crisis that began in 2008. It has been one of those periodic upheavals that are a feature of modern economies, recurring with every new generation of fundamental technologies, just as in the 1930s and 1970s. Every time, crises rightly raise questions about how to ensure that fundamental structural change will benefit the whole population. These questions have not been adequately addressed since the impacts of ICTs began to be widely felt in the 1990s, which explains the widespread sense of unease and discontent in so many countries.5 The institutions and social conventions with which we organize collective life have not kept up with the radical technological changes, which are overturning established business and social relationships. For example, in the second half of the twentieth century governments used big companies to administer much of the tax and pension system, but now too few people stay in a stable large company for years for this to be a viable structure. Or to take another example, the global community is struggling to find the rules to govern trade between countries with entirely different social and ethical frameworks.
What this means is that as well as environmental sustainability, we need answers as to how governments are to bring their citizens financial, political, and social “sustainability” too. Whether it is the massive government and personal debt burdens, inequality, or the corrosion of social trust, many countries are suffering a largely unacknowledged and yet pervasive crisis in their organization and policies. These different aspects are addressed in subsequent chapters.
In this chapter I start with the prior question of what’s the appropriate goal of government policy, or for that matter personal effort. Not surprisingly, the recent crises have led many people to believe the time has come to reevaluate the pursuit of material wealth, both for themselves and by governments on behalf of society as a whole. So this chapter starts with questions of social welfare.
There is a tradition of anxiety about whether the social and cultural effects of capitalism corrode welfare and make us worse off. I ask whether social welfare should instead be defined as the pursuit of happiness and argue that this is too narrow a definition, just as narrow in its way as the presumption that economic growth alone is enough. Then I explain why the antigrowth bandwagon is misguided in which case growing prosperity is still a valid and important policy goal. In other words, I argue that economic growth does