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Don’t look up! There is a lot to learn about economics from the Bible, many of which are very useful.

Don’t look up! There is a lot to learn about economics from the Bible, many of which are very useful.

Don't look Up! has a surprising amount to tell us about economics, much of it useful

Netflix is the new Netflix sensation Don’t Look UpTwo astronomers, Leonardo Di Caprio and Jennifer Lawrence, discover a huge comet heading towards Earth. They desperately try to warn President Obama, played by Meryl Steep.

Their hope is that the government will act to avoid catastrophe while they still have time. Their efforts are undermined by a combination self-serving political and business cynicisms, billionaire business interest, a media which sees its job in respecting those interests and that Cynicism, as well as a population that is not conditioned to look up.

It is a clear metaphor for climate collapse. Here, warnings and pleadings of scientists and climatologists as well as from a growing number environmental economists and campaigners are ignored, trivialised, and sometimes even ridiculed, by political insiders.

But after 40 years of dominance by NeoliberalPro-market economic policies can be applied to any problem that requires a serious response, especially if it involves standing up against vested interests.

There’s more amiss than vision and courage. Public services are no longer able to address problems such as long-term climate changes and short-term pandemics.

Their administrative and decision-making capacity has been stripped away, as has the surge capacity in health systems and in many countries the ability to react to disruptions to supply chains – all in the name of efficiency, but with the effect of creating fragility while contributing to inequality and extremism.

Buchanan, Friedman, Hayek got us here

Neoliberalism is rooted within the work of three Chicago School economists, Milton Friedman, Friedrich Hayek and James Buchanan.

HayekAlthough he was a well-known name, he was probably the least influential of all three. He saw mixed economics, market-based and regulated by government, as necessary steps on the road towards totalitarianism.

Friedman espoused a naïve and outdated theory of money, which was no sooner adopted than abandoned in the early 1980s, but like Hayek saw freedom in low taxes and championed privatisation and deregulation. Friedman argued that many people needed to remain unemployed to suppress wages.

BuchananFriedman and Friedman both argued that politicians can be trusted to act in their own interests at the expense of society and that almost everything that could be done in public service could be done better in the private sector.

The trio took over conservative politics in high-income countries in the 1980s. Their ideas helped to intimidate the opposition, including the Hawke-Keating Labor government and all Labor front benches that succeeded them. This influence continues to be felt today.

Raworth, Kelton, and Mazzucato want us out

In her book Mission EconomyMarianna Mazzucato, University College London economist, envisions a new relationship between the public sector and private sector: a proactive, problem-solving government working with the private sector to address climate change and other issues.

This would require rebuilding public capability and an approach government experimentation and risk-taking that has not been seen in 40 years.

She is joined by Stephanie Kelton, a modern monetary economist, and Kate Raworth, an ecological economist.

Stephanie Kelton, Adelaide university, January 2020
John Staines

Kelton’s The Deficit MythDescribes how modern monetary system works and demolishes the metaphor of government as a household used to push for balanced budgets.

Kelton points out it is normal for governments to run deficits (Australia’s Commonwealth government It has almost always been.) and that these deficits allow the private sector to avoid building up debt.

Governments that create their own currencies such as America’s or Australia’s are well-placed to guide the private sector to serve a public purpose.

While both Mazzucato and Kelton discuss what this means, and give examples, it is Raworth’s book that most clearly identifies the goal governments should aspire to.

The book is called Doughnut Economics. It provides a framework to allow everyone to live a secure, dignified, and connected life while respecting the nine environmental planetary boundaries which are prerequisites for the preservation of the planet.

The framework requires that we shift our focus from economic growth as measured by gross domestic product to a set indicators of a successful society. The indicators are very similar to the UN sustainable development goals.

Both Kelton and Raworth are members of the World Health Organization’s Council on the Economics of Health for AllMazzucato chairs the committee. Its guiding principle is to view health not only as a human rights but also as an investment for continued prosperity. This approach would have allowed for better preparations for the long-awaited pandemic.

Deficit-funded spending pays dividends

In an article for Insight magazine, Kelton and other experts, including Steve Robson, a leading medical researcher, and Martin Hensher (health economist), I discussed the implications of modern monetary theory for health. Medical Journal of Australia, and in a position document for the Institute for Health TransformationDeakin University

We should not have worried about the prospect of our health spending increasing above 10% of our gross domestic product, as it did in 2015-16. Nor should we be concerned about its potential rise in future decades. We should be investing resources such as the skills, infrastructure, and technology needed to combat future pandemics and the effects of climate change.

Continue reading:
‘Don’t Look Up’: Hollywood’s primer on climate denial illustrates 5 myths that fuel rejection of science

It is slowly becoming apparent that the outcome at COP26 in Glasgow on climate change was not sufficient to meet the challenges we face, and that many countries will not achieve the goals they set for themselves at Glasgow.

To a greater or lesser extent, every leader of a high-income country is failing to articulate a mission in regard to climate change, to drive that mission with the right public investments, and to locate the problems of climate change within the broader context of the planetary boundaries identified by Raworth – the most obvious of which is biodiversity.

The attitude is “Don’t Look Up!”, we have got this. Or “technology will save us”, as President Orlean (Meryl Streep) believed in the movie.

Streep is one the most respected leaders in the world.

President Orlean: Meryl Streep

A search by Raworth’s colleagues at the University of Leeds has failed to identify any country anywhere in the world that is providing its citizens with the social foundations for a good life while remaining inside planetary boundaries.

If that were the definition of a developed country, then none of our economies would be considered developed.

We are either not meeting our people’s needs or exceeding our planet’s carrying capacity, or (in the instance of about) both. A third(or both).

This is both a warning and challenge, a threat and opportunity.

Our mission should be to support social foundations all over the world without destroying the environment of where we live and depend.

We have the chance to govern differently

The leadership role will be taken by governments, especially the monetary sovereign governments of high-income countries like Australia.

They will need to abandon the neoliberalisms of Friedman and Hayek, as well as the baggage it carries, and instead embrace the new economics proposed by Kelton, Raworth and Mazzucato.

We can then look up with confidence, knowing that we can deflect the metaphorical Comets that threaten our lives and our quality of life.

The resources and the technology to do what’s needed already exist. But we have been stuck in an outdated view of both government’s role and economic activity, which has prevented us from seeing the coming of the comet.

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