Why "Blue" is least likely to be "Green"...

Jock — Fri, 21 Apr 2006 04:48:38 +0000

...but the Tories are possibly in the best position to do it, if they dare.

Much has been made of David Cameron's attempts to persuade us that a vote for the Tories is the real environmental vote for Britain. And whilst I will suspend judgement personally until I see policies defined, because I do fancy that old fashioned small "c" conservatism can be very environmentally sustainable, I have yet to hear him propose any of the sort of change that I believe can only truly create a sustainable world.

And nor am I saying that any of the mainstream political parties, including my own Liberal Democrats and including the Green Party, are actually any better, yet.

For it's no good just going on about whether or not your have a better recycling rate in your councils, or whether to charge more for Chelsea tractors and air travel, or to plant more trees, or whether you cycle to the Commons or not. These are merely addressing the symptoms of an economic system that forces us into a never ending search for economic growth in order primarily to pay off the debt on which our economies rely for financial liquidity - money.

And it is this debt based growth imperative that creates most of the traffic on our roads, the need to get goods around the world in double quick time, goods that are of lower quality and shorter shelf-life time in order that we have to go out and buy another one (and dispose of a previous one).

It goes further, into deeper seated problems that we are also struggling with that are not traditionally seen as "environmental" issues: - it is the reason why we will have to work longer and harder, in an era when more and more work could be done mechanically, just to be able to enjoy a few years of retirement. It creates the need for economic 'warfare' between countries. It gives far too much power to governments, because they can deliberately maintain a shortage of resources and therefore the power to allocate to one group or another depending on political expediency. It keeps poor countries dependent on the largesse of richer ones. And it gives the opportunity for Bono and Bob to make waves with "Drop the Debt" campaigns that will never quite hit the root of the problem!

It is, in short, why despite good economic growth, certainly in the northern, "wealthy" world, we can be financially richer generation on generation and yet not significantly happier.

And to resolve it would be to enable a culture of "sustainable abundance", in which truly "free" trade is better able to disperse a more even distribution of the world's wealth and the benefits that go with participating in that would bring.

We already know some of the factors that we need to manage - we give the Bank of England strict inflation targets, we know we must keep a close eye on the money supply, yet the very way we do the latter leads to the former. We keep "real" money, money created for nothing, pledged only on the credit of the people, at a minimum - there are only £40 billion or so pounds in existence in an economy that uses over thirty times that amount to account for its national product. All the rest is created, entirely privately, with only base rates to moderate how much and how fast, by the commercial banks. And instead of it being created for a single one off cost of producing it as is the case with cash, we pay for it every day it exists, in interest payments.

Look at it this way: if you borrow a million pounds at five percent for a couple of years in order to get a new product off the ground, you'll maybe use that to buy raw materials, to pay wages and so on. But in order just to break even you have to sell your product for at least £1.1 million. In this very simple economy, you can't pay your workforce and those of the raw material suppliers even enough to buy your production. So more money is needed in the system. And guess where that comes from - yes, more debt.

Yet the answer is, as J K Glabraith put it "so simple it repels the mind". Create the money not as debt, but free - even "production" costs of money are minimal when most of it only ever exists as electronic entries in different bank accounts - against the credit of the economy that's producing the goods it needs to buy and sell. You end up, over time, with a truly stable money supply. One in which people and business do not have to produce ever more every year just in order to finance the ability to purchase what is already created.

And for the party that grasps this comes the promise of a manifesto that reads like Monty Python's "Blue Peter" sketch - you know, the ability to cure all known diseases - in this case of the economy. We can lower your tax bill, give you more time to enjoy the benefits of the technological revolutions that have boosted growth over the past couple of centuries and never, it seems, faster than now. A fairer world. A freer world. Sustainable abundance.

Until then, all the "green" policies I've ever heard are merely tinkering around the edges of a problem that is purely of human, intellectual, creation - for that's what economic theories and systems are. They're not fixed, immutable laws as if of nature, but ways of trying to describe how human society works and distributes resources. If one isn't working, it can be tweaked or swapped for another.

The Tories have a history of taking the once crack pot ideas of at the time "dissident" economists like Friedman and Hayek and persuading people and business that they are the next big thing. If they can grasp the solution this time, they could make the running. And as the party traditionally of "big business" they could be in a position to persuade the right people to accept this one. I won't be holding my breath though, but if someone doesn't grasp it, and soon, I reckon we're in for a hard, destructive century that the planet will be hard pressed to survive.

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Why "Blue" is least likely to be "Green"...