The global politics of sustainability has been going on for 46 years, if you count the Stockholm Conference in 1972 as the starting point. Over the same period global real GDP has quadrupled, while labour productivity has doubled. When the Economist in 2011 played around with economic historian Angus Maddison’s figures for global GDP since year 1, they found that 23% of mankind’s selling of goods and services took place between 2001 and 2010. This is an astounding figure, almost a quarter of everything produced since the birth of Jesus in one decade. It could have been cause for rejoicing and celebration, had it not been that the planet is far too small to ecologically bear this gargantuan consumption. The picture becomes even bleaker if you add that material consumption increased in relative terms over the same period, so that material consumption per unit of GDP actually went up. The hope – later termed “decoupling” - of the Brundtland report (1987), that the global economy can grow without adding to the ongoing ecological disaster does not seem to materialize. If you then check IMF’s World Economic Outlook from April 2018, and read that global GDP has increased from 47 trillion USD to 87.5 trillion USD between 2010 and 2018, you really get the chills. We are so fucked!
So what can we hope for if global sustainability politics does not deliver? My preliminary answer is the next financial crisis. The value destruction of financial crises leads to drastic reductions in investment and consumption, especially among the affluent. And a big chunk of the global ecological damage happening today is caused by the fast fashion-, electronics-, and meat consumption, and airline travels, and car commuting and whatnot of the global upper class. If a financial crisis can make the top decile on the global income ladder drastically scale down their consumption, it would mean great ecological benefits.
But where is the next financial crisis? There surely is one looming somewhere in all the assets that have been grossly inflated by the money central banks has flushed over the markets since the crisis of 2007-9. Is it the stock market? The real estate market? The corporate bond market? Somewhere in the haze on the derivatives market? It is hard to say, but the IMF and the business press have started their betting. There is a crisis coming. For the sake of the planet let’s hope it is the mother of all financial crises.
But financial crises breed social unrest, austerity policies and populism, you will object. Did not Karl Polanyi teach us this in The Great Transformation in 1944? Yes he did. And judging by the present political trends in the world (I’m thinking of Europe, China, the USA, Turkey, etc) there is a real danger for this. So while we can cheer the coming financial crisis on for ecological reasons, this crisis also presents us with the crucial political problem of the next decade. Can the Greeks, the Americans, the Russians, the Africans, the Swedes etc. take another round of austerity policies on behalf of the financial system, without social upheaval? Probably not. And most political forces standing prepared to feed on and exploit this unrest are not democratic or globalist or egalitarian or nice. So the big issue, dear politicians and central bankers and bankers, is not how to avoid the coming financial crisis, because you have set the stage for it. The big issue is, how do we get out of it in a sustainable and democratic fashion? Post-crisis planning, you better start right away.
Do you need help? Advice? This morning I have listened to first year students discussing their ideas on how to achieve economic sustainability. I was so excited and hopeful and impressed by their intelligent, well researched and theoretically mature analyses. It would have meant a world (literally) if Gordon Brown, the other G20 leaders and their diplomats, had listened today’s students in April 2009, when they talked about a “green recovery” after the last crisis. Not really green, was it? Recovery? Not really. There will be another chance to get it right. I know 85 young persons that can help you get it right.
Erik Andersson is a senior lecturer at the School of Global Studies.