Leading economists Dieter Helm and Diane Coyle discuss building sustainability into our lives. They critique GDP as a measure of well-being, propose modified versions of universal basic income, and stress the importance of accurate economic data. They explore local vs international optimism, the state of the UK economy, and the politics of English devolution. They also mention Dieter Helm's free book on building the sustainable economy.
GDP is an inadequate measure of economic well-being; a new way of measuring economic activity should consider the impact on natural capital.
Shifting our focus from consumerism to sustainable production and citizen well-being is crucial for creating a sustainable economy.
Prioritizing capital maintenance, addressing decay in services, and ensuring citizens' access to essential assets are key for a just and sustainable society.
Deep dives
The Need for a Rethinking of Sustainability
In this podcast episode, David Runtzmann talks to economists Dieter Helm and Diane Coyle about the history and future of sustainability. They discuss the flaws in measuring economic well-being solely based on GDP and the importance of accounting for all aspects of our actions. Helm emphasizes the need for a new way of measuring economic activity that includes the impact on natural capital, such as atmosphere, soil, and biodiversity. Coyle adds that GDP is an inadequate measure of economic well-being and highlights the importance of considering production as well as consumption in creating a sustainable economy.
Challenges in Shifting to a Sustainable Mindset
The conversation delves into the influence of historical economic theories, particularly John Maynard Keynes, in shaping our current mindset. Helm argues that we must move away from the consumption-focused world that emerged from Victorian constraints and liberate ourselves from the stifling effects of mindless consumption. Coyle agrees and emphasizes the need to shift our focus from consumerism to sustainable production and the well-being of citizens. They both acknowledge the challenges of changing political mindsets, as short-term pressures often overshadow long-term goals.
The Importance of Capital Maintenance
Helm emphasizes the need for capital maintenance, drawing attention to the deteriorating state of infrastructure, including schools, roads, and the environment. He argues that before enhancing consumption, it is essential to focus on maintaining core assets, such as natural capital and infrastructure. He stresses the duty of the current generation to pay for capital maintenance out of current income, instead of burdening future generations with debt. Coyle agrees and highlights the necessity of addressing decay in services and basic social needs, as neglecting them exacerbates inequality and leads to populist reactions.
The Role of Citizens in a Sustainable Economy
Helm and Coyle discuss the importance of citizens' access to assets and the need to redefine the concept of income within a sustainable economy. They agree that the focus should not solely be on individual income, but on citizens' access to infrastructure and capabilities, such as quality education, healthcare, and sustainable food systems. They emphasize the need for policies that prioritize citizens' well-being, reduce inequality, and ensure the availability of essential assets for a just and sustainable society.
Political Challenges and Timeframes for Change
The conversation acknowledges the political challenges of implementing long-term sustainable solutions. Helm argues that the current political consensus on pursuing economic growth without addressing underlying issues will lead to a severe crisis in the future. They discuss the importance of shifting the political mindset to recognize the necessity of sustainable perspectives and address the immediate frustrations people face within their communities. While they acknowledge the difficulties in achieving international solutions, they express optimism regarding grassroots movements, local communities, and the potential for coalitions of the willing to drive change.
This week David talks to the economists Dieter Helm and Diane Coyle about the challenges of building sustainability into the way we live now. Why is GDP such a poor guide to long-term economic well-being? How can we stop squandering future resources? What should the next Labour government do to create a sustainable economy – and what will happen if they don’t?
Dieter Helm’s new book is available to download for free here
Read the Bennett Institute report on Universal Basic Infrastructure here
