Can the Economy Be Kinder? Work, Housing, Climate and a Better Future

What would the economy look like if it was designed around wellbeing, fairness and the planet rather than endless growth and profit?

In this episode of The Science Intersection, Rachel speaks with Guy Dauncey, author of The Economics of Kindness, and Donald Power, author of a book exploring how the economy really works and how it could be changed to better serve people and planet.

Together, they discuss why the current economic system so often fails to meet human needs, from housing and work to health, climate and community life. The conversation explores capitalism, regulation, co-operatives, public services, universal basic income versus universal basic services, automation, globalisation, and what a sustainable daily life might actually feel like.

It is a wide-ranging discussion about whether we can move from an economy that rewards extraction and selfishness towards one built around fairness, ecological limits, democratic control and kindness.

To find out more about the guests go to: 

https://thepracticalutopian.ca/

https://www.economyofwant.uk/

Transcript

SPEAKER_00 0:10

For this episode of the Science Intersection with Donald and Guy, both have written books about the economy and how a better economy could produce better results for people and planet. So I'd like to know the backstory of about what brought both of you.

SPEAKER_01 0:29

I'll jump in first. So I have been, ever since I was a teenager, living with a duality, like this world is so beautiful and amazing and wonderful, and there are such terrible things going on in it. Why? Why are we in such a mess? What is needed and stuff like that? So I in the early 2000s I found myself writing a series of books on 101 solutions to the world's different problems, including climate crisis and cruelty to animals and cancer and stuff like that. And I came to do the book on 101 solutions for the world's economy, and I felt completely intimidated. I felt this is so this is beyond me. I don't have the ability to do this. So I put it on a back shelf and spent time diverting myself with my organizational things I'm up to, and then but also writing a novel called Journey to the Future: A Better World Is Possible, which is a visionary sense of how the world could be in 10, 20 years' time. And then in 2015, I was actually literally walking out of the forest locally, and this question came to me, What is the economic value of kindness? And really so I did 10 years of deep diving research into economics and economic history and anthropology. The result is the book The Economics of Kindness, subtitled A New Ecological Civilization. But I also had a subtitle earlier called The End of Capitalism.

SPEAKER_02 1:50

My background is that um my parents were concerned. They were very concerned about the uh threat of nuclear war. So I grew up from small age going on C and D marches, and they were interested in the Third World. My dad ran a world development group, and so I began to learn about uh social justice and the environment at a very young age, uh and certainly got very interested in my teens and began to try to do things. At university, I joined a thing called Third World First. So a lot of interest in the third world and development. My university specialized in what we would now call alternative technologies, so built a wind turbine as a student project in 1970 something. And uh subsequently I've always worked as an engineer, but in outside work I've been involved in labor and trade union movement activities, the usual sort of thing, uh local branch secretary and chair, and occasionally involved in very substantial struggles and didn't play a big part in it. I was on what's called the Brent Trades Council during the Grundwig strike, which involved thousands of miners coming to help Asian women struggling to get decent pay in a little company in London. Later in life, I sort of finally got to work in a third world country. I spent five years in Nicaragua, starting during the original Sandinista period, but carrying on after a change of government, and working in the engineering university. And that country went through economic hell. I mean, we changed currency three times. We we had bags of of notes to pay for pizza sort of thing. So I came back and I'd always been interested in economics, and I looked at Marxist solutions and so on, but didn't really completely be convinced by them given that I worked in private industry here. So I decided to make notes. And to cut a long story short, I read voraciously, I made notes in my spare time over about 30 years. I took an OU course on economics, not a full degree, but enough to to give some extra grounding. And finally it turns into a book, which is a self-published book because I'm not an own economist and I'm not an academic economist, but I think I bring some engineering skills to it, knowledge of how the real world works, and great interest in the environment. And of course, numeracy. So I've really gone through the way they present the basic economics. I'm not talking about Nobel Prize winning stuff, and deal with it page by page and prevent an all present an alternative picture. So that's what the book is aimed to do.

SPEAKER_00 4:18

What do you think the moment for you was Guy Can Go First? When you realize that the current economic or social model didn't really make sense.

SPEAKER_01 4:31

While I was working on the book, doing an awful lot of reading, and every book you read, some other person, or mostly economists, has put in five or ten years' work. So it's a huge amount of condensed wisdom. I have four huge breakthrough insights, which I still find stunning. The first is very simple, which is to understand that economics as it's taught is basically a smokescreen for neoliberal selfish capitalism, because it assumes that everyone's selfish and all the costs are externalities. And if you don't talk in mathematics, no one can understand you. So there's a huge critique of economics as it's done. So don't get put off by all the wordage and verbiage and stuff in economics. And the tragedy is that most economic journalists and reporters don't understand what's going on behind the scenes. So the second really big insight is going back anthropologically, realizing that the biggest dynamic in human history that's lasted over a million years is between domination and cooperation. And so then, with the coming of a food surplus, you know, whether it's a massive shellfish or salmon on the west coast of North America or agriculture in Mesopotamia, the clans, people realized they didn't have to share all their food. They could keep some privately. And so we had five years of what's called achievement societies. They're still cooperative, but everything was shared. And then the successful family said, Well, we want our children to inherit our titles and our wealth. So from then we moved back into domination, because, you know, and we had 5,000 years of history, which is all our written history, domination, kings, priests, tyrants, cruelties, the works. And then starting about 400 years ago, or I'd say with the printing press actually, but leading into the British, the English Revolution in the 1640s, American Revolution, 1770s, French Revolution, democracy, we've been working to restore cooperation as the mode of living together. And we're only halfway through that process. And so the other insight is that capitalism is actually purely the economics of selfishness. It's an economic system designed for selfish people whose only goal is to maximize their capital gain. There's a wonderful big book out called Capitalism, a global history by Sven Beckert, who is by far the best history of capitalism I've ever come across. It is a thousand pages thick, I'll warn you, but there are a thousand fabulous pages. And he's very clear that individual capitalists will do whatever it takes in any economic system to maximize their capital gain. They'll enslave, they'll ignore, they'll brutalize, they'll wait for, they'll the works. And so once you realize that capitalism is fundamentally an economics of selfishness, you ask, like, what is the alternative? It's an economics of cooperative kindness, to move the whole world from domination to cooperation. Because only the dominators enjoy dominating. The rest of us do not like living under dominators and bullies. We don't like it in our personal lives, and it's causing havoc in the world. Because we would be able to tackle the climate crisis far more quickly if the oil companies weren't behaving purely to maximize their economic profits and sabotage global climate negotiations and regulations and stuff like that.

SPEAKER_02 7:34

Obviously, overlap on a lot of those things. Book has built up over many years, and it's difficult to pick on one single thing. So perhaps I'll pick directly on the economics. So when I decided, okay, I'll turn my engineering scientist scientist-based brain to look at the basic economics that's taught to uh A-level school students in Britain and undergrads in the first year of university, and the sort of economics that's piped by politicians in public places. And I was enormously astonished by how poor it is. I mean, assumptions that are made that just don't stand up. So one of them is the core of it, that a system based on the individual choices by so-called rational men, although they tend to include women nowadays too, thank goodness, uh, will somehow lead to the best end for humanity. This A plainly isn't true if you look at anywhere in the world, but I'm thinking of where I live, but it will be similar elsewhere, where there is an endless sequence of products that are toxic. Everything from wrecking the environment with carbon to direct pollutants to junk food to vapes and cigarettes to uh social media with uh addictive algorithms. I don't think I need to go on. And the economy is motivated to generate these. So what struck me is this how the system actually works is it has drivers to continually sell because the only way a business can survive is by minimizing its employment costs and maximizing the amount it sells, and that encourages it to do harmful things. And that logic, I mean, I've worked in industries, big industries with nice bosses who've had to make painful decisions to make people redundant and so forth. Um, they don't necessarily want to do it, not in a decent corporation. Well, one of them, for example, is the motor industry that I was in a long time ago in the research center. But if you're faced with overseas competition who are undercutting your products, you have to make those difficult decisions. So they're stuck in a system where very often the the better people would welcome regulation. So if that company has to obey that that particular job long time back, we were trying to mod modify diesel engines to make them meet Californian legislation. We were happy to do it. You know, it was interesting work. No one had a problem with doing it, provided the legislation said we had to s engines had to be sold with that were like that. I'm very sympathetic to cooperatives, but I do feel we need an overall regulation of the economy. Very difficult to achieve. We'll get people yelling at us that we're communists or something. I think the market has great value, but I think that we we cannot allow it to be totally unregulated, and we should set a direction for it. I want to add one little extra thing that struck me, that this business of the rational person making the best decisions. There's a phenomena that could describe it in various ways, that sometimes it's talked about as the tragedy of the commons, where to get a good solution you need a collective solution. So, for example, I'm affected by asthma and dirty air, and London has dirty air. I cannot pay to clean up the air of London. I would love to. I cannot do it. I need to vote for politicians who will do it. And no one has those choices. I would prefer actually to have a largely car-free London. I own a small car. I vote for all the legislation that minimizes cars, but I can't sell mine and have no cars in my street because you cannot make that as a as an individual decision. You could only make it collectively. In fact, I almost hold in contempt some of the political stuff I read. I mean, Milton Friedman, um perhaps you're familiar with his four ways you can spend money. Really, two of them he almost made up because they're not very relevant. But the main ones that he are spending it yourself directly on what you want, which he says this gives you good value, and uh that's the best way that uh things work, and or having the government spend your money on other people, and he says then they get bad value and bad results. And um, in my book I I put a little graph of how much is spent by the British government on all UK secondary and primary schools. And it's just a tiny bit more, but but almost the same as what consumers spend in the UK on gambling, alcohol, tobacco, and illegal drugs put together. So who's making the better choice about spending that money? Educating our children or gambling, very likely pushed into it by the endless advertising for gambling we now got on TV and social media and so on. So it's hard to do good regulation well, and people will complain about red tape, but I see no alternative. Uh in a world full of endless new technologies, I see no alternative. And in fact, Einstein said much the same thing after the dropping of the nuclear bomb. There will be many new technologies coming down the track that we have to control.

SPEAKER_01 12:36

So, Donald, regulation is not controversial. I mean, I completely agree with you. And if you if you picture driving on the roads in a country where there's no regulations, you quickly think, oh my god, this is chaos, right? Absolutely. And even the most right-wing people do, they threw four-year-old temper tantrums against the idea that regulations are wrong. But yeah, even re running a family or a marriage, you have internal regulations.

SPEAKER_00 12:59

Where do ordinary people feel the failures of the current system most clearly? Work, housing, health, debt, climate, loneliness, or something else?

SPEAKER_02 13:11

It's a great question, but I'm afraid I feel the answer is depends on who you are and where you are. Because, you know, I'm I'm conscious there are garment workers, perhaps say, in Far East, I don't name a particular country, who were working. I looked it up the other day, uh, it was appalling. I mean, I can't remember if it was 12 or 15 hour days for repittance, desperately trying to earn enough to stay afloat. So, you know, they're affected directly by work. There's people in cities with bad pollution problems affected by health. Um there'll be people in some of the countries of sub-Saharan Africa who are affected by uh crop failures. So I think it varies. And an interestingly also perhaps as I was alluding to earlier, there'll be people who are affected by some of the more toxic and harmful products that are pushed to them by mass advertising, whether it's uh just something as simple as junk food and so forth. So I think uh there are many, many areas where uh the system is failing us. And it's actually quite fascinating. I mean, there's a new relatively new book, The Anxious Generation by Jonathan Hayde, about uh the effect of smartphones on people's mental health. So I think there are there are many areas.

SPEAKER_01 14:34

Wow, yeah, I mean Donald's right, but here in Canada, and I know it's true in Britain and America, housing crisis. For the two-thirds of people who have a mortgage and leveling in the houses happily, you know, you you're pretty comfortable you're getting on. One-third of the entire population is being really crunched by the housing crisis. If your rent is pushed up by an extra thousand dollars a month or thousand pounds a month, you suddenly have to go to the food bank because you have to pay the rent. You have to pay your visa bill, you have all your visa bill, you can go into debt on that one. You're accumulating debt. And the housing crisis is a great example of how the market system will not produce what's needed because developers, building developers will always want to build the houses that bring the most profit. So they're going to build a million-pound house rather than affordable unit. And so until 1980, until neoliberalism became the guiding economic philosophy of the Western world, governments routinely built public housing, or they encouraged cooperative housing, places like Finland, Sweden, Zurich, Norway, New York, they all built large amounts of cooperative and social housing in high speed. And then Margaret Thatcher came along and said, you know, you've got to sell all that. Everyone, if we make it all private, they'll all vote for me. In America, they even passed legislation that said that every new socially owned house or social house that's built, another one must be demolished. And so it's been a 45 years of failure to provide for social housing and cooperative housing. And that is, I meet people regularly who are just struggling so much to find somewhere to pay, who are having to do two or three jobs. And it's it's the the tragedy is they're not organized. They're not in the early days of the labor unions when brokers got together, their first goal was an eight-hour working week instead of a 16-hour working week. But the people struggling from the housing crisis have not yet been able to mobilize into an affordable housing alliance to put the real pressure on the government. And they're the people running the shops and businesses, they're the staff in the hotels, they're the all the folks like that. But if you're trying to live in Cornwall, in some villages, you know, there might be 500 units out for Airbnb and two units available to rent for a regular family. So, yeah, the housing crisis, the greatest failure of capitalism and of governments to regulate capitalism and get involved and do what's needed to provide housing should be a right for all of us. I could go on about the other ones, but hey, back to you, Zack.

SPEAKER_00 17:10

I show I do know a couple people kind of living in garages, the the housing situation, there's so few affordable houses in London. But also I find it interesting that in Finland they had this thing, housing first, wasn't it?

SPEAKER_01 17:24

Everyone gets a home because you need housing is like the the basics to have the sp the specific of housing first is to eliminate homelessness.

SPEAKER_00 17:33

Yeah.

SPEAKER_01 17:34

And so the bit the what they're saying with housing first is that first of all, give someone a home. Do not expect them to be free of drinking and free of drugs. Get them a home first so they can stabilize, and then we'll give them the support to get off whatever whatever addictions. If you insist that people get off their addictions first, you're caught in a trap. So it's just a matter of commitment by the government and the regulations needed to make that happen.

SPEAKER_00 17:58

I I do wonder if it's partly a difference in the population or a difference in things like taxes.

SPEAKER_01 18:05

I have not been to Finland, but I'm very interested in the country. They never had a large landed aristocracy in the way that Britain and France did. So France managed to overthrow its aristocracy in the French Revolution, although they claimed a lot of power back. In Britain, we have never overthrown our aristocracy. They still own vast quantities of land, and Duke of Westminster, goodness knows what all sorts of stuff. And in Finland, they never had a large aristocracy. So in the 1920s and 30s, when they were bringing in social democracy and when everyone got the vote, the Social Democratic Party was able to do deals with the Farmers Party to reassure the farmers that they would not, you know, take their farms into public ownership and stuff like that. And then electoral alliance to bring in social democracy. And every culture, if you go back far enough, has a tradition of working cooperatively together. You build each other's homes together, you hunt together, you look after the village together. And in Britain, like that's you know, you've got to go back to the druids to find that sort of stuff. In Finland, you just got to go back 200 years because it's really cold in Finland, and it really the colder the country, the more you have to cooperate together to help each other. And then I think having this is a joke comment, but having saunas where everyone is naked in the sauna, you eliminate self-importance when you're naked in the sauna together. So all of Scandinavian countries have a thing called a code of yante, which has got ten clauses. It says, you are no one special. Don't get big ideas about yourself. We're all struggling here together, we're all getting by. It lends itself to cooperative thinking and working and not to self-importance. Whereas the American culture, you know, is be as self-important as you can, post an Instagram picture of yourself every five minutes, you know, make yourself out to a complete jerk and then celebrate it. Kind of stuff. Britain's halfway between the two. It doesn't know which way to go. The Nigel Farange be a be a complete jerk, end of things, or hopefully the Andy Burnham Let's All Work Together end of things. It's a current choice, right?

SPEAKER_02 20:05

I'm interested to hear you talk about Finland, because it's a country I admire as well. I haven't uh studied its history as much as you have, but I have actually been there a few times on business trips and very much enjoyed it. I mean the facilities are extraordinary in a very small town that I was visiting, you know, just the local library would do proud of quite a few universities. I'm also aware that the Scandinavian countries in general fought for a social democracy, and I think that they have a stronger social democracy than a lot of the rest of Europe does. And I also agree very much with I wasn't aware of the landownership in Finland, but I have another example. As I told you, I worked in Econoga five years, but I started out with two months of language training in Costa Rica, which sometimes people refer to as the Switzerland of Central America. Costa Rica is one of the most together little countries you can find in the Americas, really. National Health Service, schooling, state schooling, peaceful, no army. But uh it was colonized. When it was colonized, the Spaniards that came didn't think there was anything very interesting there. So it was mainly colonized by small farmers. It has a much broader middle class and land ownership.

SPEAKER_00 21:13

You see that same pattern you described by the I haven't actually visited Finland, but I visited Sweden and Norway, and I'm very in favour of the higher taxation in those countries.

SPEAKER_01 21:27

The common wisdom is that oh, they charge so much tax in Denmark and Sweden and places like that. But if you take the level of tax paid in America and you combine it with the healthcare costs, which can be between 12,000 and 20,000 a year for a for a person or family, you get the same level of payment for uh b as in Scandinavia. Because in Scandinavia, your taxes include healthcare, they include seniors' care, they include education, they include all that stuff. So it's a very false comparison when they people think the government's paying all the taxes.

unknown 21:59

So

SPEAKER_01 22:00

The government's levying taxes on everyone. And and if we think about tax differently, if you give to a charity to help tackle the causes of cancer, you feel really good about it. But if the government invests in a project to reduce the causes of cancer, that's exactly the same. And we do that through our taxes.

SPEAKER_00 22:17

Can each of you tell a story of a project, place, or community that made a better future feel possible?

SPEAKER_01 22:26

So let me just tell the story of Scotland very recently because the concept of community wealth is quite a new one. The phrase originated in Preston, which was initially one of the poorest cities, towns in the whole of Britain. And they started thinking about the the way the procurement budget is used by the city and how it standardly goes out and buys from things from big corporations. So they started sharing out the procurement budget to local companies and local corporatives. And so you know, schools would buy and hospitals would buy food from local farmers instead of buying them in from some corporation, who knows where. And then so they had a lot of success with community wealth as a concept. But Scotland took it a step further, and they see community wealth as every way in which local people are taking ownership of their local economy by, for instance, you know, buying a local pub and putting it into community ownership, buying land that's threatened and putting it into community ownership, starting a cooperative, starting a savings union, using common interest shares to buy wind turbines and stuff like that. And they then went a step further, and the Scottish legislature crafted a community wealth building act, which basically requires every region and city and government unit in Scotland to develop plans to build community wealth within their region. And that act went through the Scottish legislature, I think, in February of this year, and passed by 103 votes to zero. So putting the whole Scottish economy on a framework to move to community-based economic development and wealth, as opposed to it being purely private. So it's an ongoing story with a thousand different pieces in Scotland, but it's a really exciting one that we can all learn from.

SPEAKER_02 24:11

Perhaps I'll talk about the one of Nicaragua. So that was five years I spent there and working there. Um, and uh I wasn't doing politics, I was getting on my job in a university, they'd set up at a University of Engineering. But what was stunning was what a difference it made having in the 80s a government that had broad popular support that was devoted to doing something different. So they set up a national health service, a free health service. They launched a literacy campaign. So um much of the the rural parts of Nicaragua people were largely illiterate, and they um sent out volunteers from the towns, from the more educated young people in the towns on lorries, to spend months in the countryside uh teaching literacy. Also uh amazingly staffing uh simple health centers. And uh on top of that, they looked at ways of uh establishing local industries that would make use of local products. For example, they grow cotton, but they hadn't got a decent clothing industry. So they tried all these things, and it was called by the aid agencies the threat of a good example, because as you will probably know, the US government uh dedicated itself to funding terrorists who attacked it from abroad and destabilized it and held the had an economic embargo. Unfortunately, eventually, after two elections, on the second election they lost power. Uh sort of centre-right government came in and it's since had a rather turbulent time. Curiously, it's ended up now under who was then the president of Nicaragua, but now has become a rather less attractive figure, a sort of semi-dictator. But during that time there was an extraordinary amount of hope. And also hope from abroad. Thousands of young people came from all over the place, including the United States, to do voluntary work or to work for aid agencies, and they were free to carry out whatever project they like. And the sense of community was really powerful amongst uh uh local people. So sadly, there are lots of uh powers in this world that don't want something like that to succeed. And I think we have a fight on our hands, and in some ways, we have to try to do it in the richer countries because the poorer countries are too subject to interference quite often.

SPEAKER_01 26:39

Can I give an example from India? Yes, so in India there's another example very parallel to what Donald was talking about. It's in the state of Kerala in southwest India, and it's called Kudan Bashri. That means prosperity of the family, and there are village groups where women gather together in the village to decide together what are our priorities for the village. Is it healthcare? Is it getting a community garden going? Is it getting a credit union going? Is it getting the portholes out of the street, whatever? But there are 317,000 Kudum Bashri groups in Kerala where women are determining the future of their villages together, and they have support right to the highest level of the government in Kerala. One thing that's not much known about Kerala is that dating back to 1956, they elected a communist government, which has basically been in power ever since, changes its names, calls itself Social Democrat or this, that, or the other, but it's still driven by the same impulse for equality. And right back in the beginning, in 1956, they abolished the caste system and they insisted on literacy for everyone. So the literacy rate in Kerala is up to 90%, the highest in India. And if you know India, the caste system is a misery everywhere else. So those two things abolishing the caste system, getting equality for everyone, getting literacy to everyone, and then empowering women in the villages to take control. It's a great story. Now, the the fun thing is if America knew about communists being in control, they'd have got their dominoes theory, the paranoia, like they did in Vietnam and sent in the army, whatever, but they didn't know about it or care about it. So it managed to keep going without interference from other nations. It's called Kudum Bashri. You can look it up, and it's a great success story. Back to you, Rachel.

SPEAKER_00 28:22

Cool. So it's kind of like a citizen's assembly type setup.

SPEAKER_01 28:27

Well, a citizens assembly is a very particular kind of democratic governance where people are chosen at random to sit together in an organized way every weekend. In these villages, it's the women who meet together. Now, I don't know whether internally it's all the women. I'm sure there's always some are too busy doing something else, but it's it's it is not, it's the women who do this. The parallel is with the Grameen Bank in Bangladesh, where Yunus Mohammed founded the Grameen Bank when realizing how much poverty there was among women, and he eliminated the need for collateral in terms of you've got to put your house or your land up. So the collateral of the women in the Grameen Bank in Bangladesh was simply their own trusting each other in circles of five. And he found from experience that if the men were given a loan, they'd spend it in the pub on the way home and get drunk. And the women felt a stronger discipline because of the need to manage the household and their children and stuff like that, so they could be trusted with the money. Huge, I mean 98% repayment and records, and in you know, huge numbers of families that pull themselves entirely out of poverty within 10 years by taking out small loans to spark microenterprises. And microenterprises, micro lending, has become so successful that the big banks have got in there and jacked up the interest rates and given it a really bad name. But the way it was founded in Bangladesh by you know Younus Bahamut was a huge success story. You know, and he's an economist himself who's realized that he's sitting at his desk in his economics department doing all this thinking and writing and stuff like that. And right down the road in the village, these people are struggling with extreme poverty for the lack of a $30 loan. So he lent them $30 out of his own pocket to see how it worked. And when that was successful, it grew and it grew and it grew into the into the millions.

SPEAKER_00 30:08

It's a woman's thing because women run the households.

SPEAKER_01 30:11

There's evidence all around the world that women are much better at cooperating than men. I mean, there are obviously women who get self-important and women who think they control everything. Difficulties of women, including our deep ancestral women, you know, we're still living on the plains of Africa, the difficulty in giving childbirth because of the large brain and the small pelvis meant that women have probably been cooperating around childbirth for a good two million years. Anyone who's raised small children, ha, knows that two small children will dominate one mother and make her life hell. But I lived in a village in West Africa for three months, and I saw how the women and the children work together, and the women were always a group working together, and the children always knew who the boss was, and it was the women collectively. Whereas on some modern parenting, if you've got two children, they think they're the boss, and the mother is their servant to run around and do what they want, and they throw a tantrum if they don't get their own way. And the phrase that it takes a village to raise a child is so true, but in that village it is the women who are doing the child raising, and it's a highly cooperative activity. So I think it's got very deep roots in among women in particular.

SPEAKER_00 31:24

So what does a sustainable, fairer future look like in someone's ordinary daily life?

SPEAKER_02 31:32

Well, I do talk about all sorts of possibilities in the my book is divided into two halves. The larger half is pure analysis. You could read it if you wanted to uh be a nastier capitalist. It basically uh explains how the economy actually works um and deals with all the usual graphs and um and so forth that you would find in in an economics talk. But the second half is uh the half that deals with uh what we might do to improve things in terms of uh the ideas that the book's interested in, in terms of the environment and in terms of social justice. And that's much harder to write because we're not there. There are so many possibilities and uh but we haven't got there. And what emerges is really very, very hard to foresee, I think, given the rapid development of technology, AI and so forth. So in a sustainable world, the first thing that we have to do is we have to limit the total amount we produce and consume, because it is just not possible to be sustainable if uh people all over the world expect to live at the living standard of wealthy Europeans or citizens of the of North America. The the figures are just astonishing. Since 1992, when we first started talking internationally about climate change, uh we've actually doubled the amount of CO2 we've pumped into the atmosphere compared with what we had then in the entire history of the Industrial Revolution from about 1750, say. And you can see why, because cars have got bigger every year in well, everywhere, basically. People think it's necessary to have a four-wheel drive vehicle to drive around central London. People expect to be able to fly away at weekends. And you look even at the power consumption, the power consumption of a 1960s saloon might be 50 horsepower. A large SUV can have 600 horsepower, 600 horses to pull you around. So we've got to move away from that, and we've got to find other things that satisfy people that are not continually travelling around in large metal structures, not flying abroad at every opportunity. So what we can offer them is more free time. Because if we're producing less, we could easily probably achieve the necessary production in perhaps a three-day week. We can also also offer security, so we can make sure that there will be work available if they want it. And part of reducing the need to travel will be that things are more local. So instead of spending ages sitting in a car commuting, you should be able to walk or cycle to work and so forth. So there have to be a lot less consumption of stuff, but we've got to replace that with other things that people are content and interested in doing. And obviously, it's not for one person to determine that. Um, people will have to decide. But I think the key is to provide them with collective ways to choose those things, and that might be uh things very basic, like more police and more education, so they feel um safer and so forth, or it might be much better leisure facilities. But uh at the end of the day, those are the sorts of things creating a lifestyle that people do find interesting. Um, they can be enterprising in that lifestyle, but it does not consume so much that it can't be emulated across the globe.

SPEAKER_01 34:54

So let me jump in seven things. You wake up in the morning in your own house that you either own it privately or you own it cooperatively, and that there is basically no more renting going on. All ha all homes that are rented with a landlord have been bought by a housing cooperative. So you have security of housing. At work, your the the place to your your place of work, if it's a business, you're an employee shareholder or you're a cooperative owner of that. You make decisions together. And when AI and robots come along, you move to a four-day week or even a three-day week. So you're you're having more leisure time. In your neighborhood, you're finding that the street you're on, you live on, the cars can't do more than five miles an hour, which is in Holland they call it a woonerf. So the people and the children are reclaiming the streets. There are trees and there are picnic benches, and the cars have to wind through very carefully, or else take a back lane only. So, and in the neighborhood, people are knowing each other, they're chatting with each other, they're building community wealth, and they're getting engaged in all sorts of, you know, whether it's chess clubs or walking clubs or groom the dog clubs. For transport in the town you're in, you don't need to own a car at all because there are great cyclanes, there are separated, safe, separated bike lanes, there's great public transit, um, there's great underground railways, everything's electric, so there's no air pollution at all anymore. Um but this this but basically you don't need to own a car. If you need a car for getting out to the country, you go to the local car share cooperative and you take the car for the day as you need it. The town you live in or the neighborhood you live in is also full of greenery. You've got trees growing everywhere to bring much more shade when it's super hot in the summer, like when it's 35 degrees in the city right now. And there are plants growing and there are there are streams being recovered, and there's greenery everywhere. And then two more things if you need money, you'll find that the bank you go to is either a public bank or a cooperative bank. It is not a corporate bank squeezing your money out for profits. There's no visa credit cards charging 26% interest. And finally, you're part of a local democracy, so your voting for your local council is on a proportional voting of not first past the post, when you know you've got 10 candidates and one can get elected with only 30%. And there's also participatory budgeting. There's a town in Portugal called Casquet where a third of that, I think it is a third of the whole city budget is decided by vote. And people spend a whole month discussing the projects they want to support. And the more people who vote, the more money goes to those projects. So people are really involved in their city governance, that sort of stuff. So it's a really lively way of looking at it. And if you go to a place like Copenhagen today, a lot of it's already there. It's already happening. The people of Copenhagen who are getting around on bicycles and by bus and using, you know, um, renewable heat systems, their energy footprint is already 60, 70, 80% lower than it is for a regular suburban place where you, you know, the way we live normally. So you can have a really high quality of life with a far lower ecological impact in terms of your energy use and your consumer goods use when you're emphasizing shared transportation through cycling and public transit. And the importance of community wealth, your wealth is in the people you know and less in the stuff that you buy. You'd rather spend time with people than work for five hours to buy another thing that ends up sitting in your house as a gadget, whatever. So it's a I think it's a very visualizable future. It's already happening in many places in the world, and people like it when they get there, and loneliness disappears.

SPEAKER_00 38:26

Too much more leisure. I'm I'm all in favour of UBI and people kind of working less, do less damage, as well as have better time.

SPEAKER_01 38:38

UBI is universal basic income, and I am strenuously opposed to universal basic income. I think it'll be an absolute disaster. The evidence is very clear that in the trials, when people are given a universal basic income, they use the money really well. There's no question about that. Whether it's education or whatever it might be. But when you give that money to everyone, what's going to happen is that the landlords can raise their rents because people they got an extra thousand dollars a month in their pockets, so the rents will go up. The childcare costs will go up. Wages will not go up because employers will feel we don't need to raise wages anymore because they got their basic income. Unions will feel less need to campaign for higher wages because workers will be having the basic income to be happy. And suddenly all that money is going to end up in the hand of private sector entrepreneurs and businesses. And two years later, people are going to come back, well, I need $2,000 a month now because the prices have all gone up. So the answer is not universal basic income, it's universal basic services. When the government makes a commitment to affordable transportation for everyone, affordable childcare, affordable seniors' care, and affordable housing and affordable broadband where that comes in. Because those services that doesn't cause the macroeconomic impact to kick in of other people exploiting and gaming the system, which is otherwise I'm 100% sure will happen. And you'll still get all the same benefits because a basic income equivalent, if you imagine that your rent is held steady at under you know, £700 a week and your child care is kept low and your transportation costs are kept low, your income equivalent is more than you'd get through a check in the mail as basic income. So I there are other people thinking that way, and I'm trying to reverse the thinking from basic income to universal basic services.

SPEAKER_00 40:31

So whether universal basic income triggers inflation or landlord exploitation will depend on how it is enacted. So if it's supported by strong rent controls and targeted wealth or land taxes, it is less likely to create these problems. There's actually an argument for doing UBI and UBS combined, and I'd like to explore this in another podcast.

SPEAKER_02 41:00

There's a lot of agreement here. I mean, regarding UBS, I also feel that we're a long way from needing that. I mean, there is so much work that could usefully be done. You know, you could harvest class sizes, you could provide far more medical provision and so on, you could improve the environment. And also, there is an awful lot of evidence that an interesting work is important to people. And if you look at people who are happy in retirement, they've usually got lots of hobbies.

SPEAKER_00 41:25

So a point here, not everyone has access to fulfilling or adaptive work, and many are entirely locked out of the labour market due to systematic barriers, making UBI a vital tool to decouple human survival from employment status.

SPEAKER_02 41:40

Another one I'd like to mention is one of my favourite 19th century socialists is William Morris, who's well known for his uh arts and crafts, but less well known for his socialism. But uh he painted a portrait of the future called News from Nowhere. Probably bears some resemblance to what you described, Guy. But it's a very environmentally sound place where brutally heavy work is done by machines and so on. But bear in mind his background, interesting craft work was done by people, uh still. And uh quite how we manage this, you know, it's not up to me to say. But I think that sort of future, because what's the alternative? The alternative was automate every away everything away and become sort of jealous sitting at home watching the TV or scrolling the internet.

SPEAKER_00 42:27

Maybe automation will not create a passive society of screen addicts. Maybe it will liberate people to pursue self-actualization, allow them to trade, mandatory labour for deep self-directed learning, like mastering instruments and foreign languages.

SPEAKER_01 42:43

Locally, if I go to craft markets and things like that, there's an awful lot of people who are doing crafts. But the crafts they're making are knick-knacks, to put it bluntly. They may be very beautiful knick-knacks, but they're not essential. No one is making a cell phone or a mobile phone by crafting. And things like mobile phones that are require highly repetitive work by loads of women on great big assembly lines. I think Foxconn in China employs 30,000 people, something like that, could be automated and in my mind should be automated. The key then is around the ownership of the company. There was a company in Taiwan or Korea that said if you know they're happy to accept AI, but they want to reduce the work, so they'll they'll keep the benefits, and you know, they'll keep the same number of workers. Instead of firing 20% of the workers, they'd all work 20% less. And there's another example of Siemens, the big manufacturing company with operations all around the world. And last year they needed to fire 5,000 workers because of changes in the competitive environment and stuff like that. So in America, people got a you know an email saying you're fired, and that was it. In Germany, where the Siemens operations were basically very unionized and where workers took part in workers' councils with majorities, not a single Worker was fired in Germany. They negotiated all of the changes through people moving to a shorter week or taking early retirement or being transferred to another part of the company or something like that. Because the workers got to control how the downsizing was done. In America, they didn't. People are working in the democratic governance of the places where they work is a core human principle that I believe in.

SPEAKER_02 44:24

I think this is something that would be interesting to discuss a little bit. Because my worry would be that there was a period post-war, post-World War II, where Europe and North America did particularly well. There was a lot of work to be done, there was a lot of reconstruction to be done, and a lot of new technologies that could be deployed. And the capitalists, as you like, or the market needed more workers. And the workers, for various reasons, came out of that war, war well organized and were able to demand better conditions. There were social democratic governments in power in many places. Taxes were into the 90% in both the USA and Britain on higher wages, on higher salaries. We had a very different economy then. A lot of things were nationalised, particularly in the UK. We've now moved into a different situation, a globalized world where our workers are competing with the Far East, competing with countries that have far lower salaries and poorer working conditions, weak trade unions, and often brutal dictatorships, or at least not very democratic governments. And that's that's almost like going back to Victorian times. And while I know that there are good examples in Germany, and Germany has strong unions, and they're better able to defend themselves. Nevertheless, uh, it just happens last night, uh, two German friends were visiting us, and we had a long discussion about economics and politics, and they were commenting that the companies might not lay off people directly, but they just didn't replace them, they shifted work abroad to where it was cheaper, and so on. So I'm absolutely in favour of social democratic governments, strong trade unions, but if we're faced with this globalized economy, it's a very big thing to challenge, and I think it has to be done uh very directly, very internationally. Somehow we have to face up to the fact that companies within whichever country we're talking about, Germany or whatever, are bound by this competitive necessity to minimize their wages and perhaps to ship production. And I've seen it so often. I mean, we had a patriotic entrepreneur here, Mr. Dyson, who pushed for Britain to uh leave the EU. The moment it left, he shoved all this uh manufacturing off to uh far east. I'd be interested to hear your take on this guy, because I'm totally in favour of kindness and everything you've said, basically. But how do we tackle this market pressure on the companies?

SPEAKER_01 46:46

Firstly, I believe there's value in competition in the marketplace. If when you get no competition with state-controlled companies, you end up with Soviet-Russia type stuff. Competition is in a sock again. You're you're combining competition with cooperation. Globally, what's happening though is that the big corporations are setting up monopolies and monopolizing things and oligopolising things so that there's no competition and they are controlling the market. So, colleague of Michael Anne Petafor wrote a book called The Global Casino, How Wall Street Gambles with People and Planet, and she's particularly concerned about the shadow economy, which is a $300 trillion chunk of the world's money that's not being regulated by anyone. And when people like Andy Burnham are faced with economic commentations, say, Oh, well, the bond market will pull you down because capital controls everything under the sun, she sees that as a core problem because the global capitalist system is actually being run by major financial players, often whom names we don't know, like stateside or whatever it might be. And she believes we need to return to a system of capital controls. And one of the ways is to have a financial transaction tax, a small financial transaction tax, in every single transaction that takes place, which also a steady source of income for the government. And if that seems shocking, bear in mind that Visa and MasterCard impose a 2-3% transaction tax every time you pay. They help themselves to 2% to 3% of the price. And in addition to that, I've been looking at the need to change corporate charters. So this would happen country by country. So in with the way I've written it in The Economics of Kindness, every business is told that over ten years there's going to be a transition to a new social purpose charter, where the business is invited to state to adopt a new charter which states its social purpose, which is more important than just making money. Making money is a secondary purpose. They also state their commitment to have women on the board, to have nature on the board, to not do tax evasion, to not have offshore shell companies and stuff like that. When companies sign up to the new social purpose charter, they get priority access to government contracts and procurement. They get a lower interest rate through the central bank, and they pay a lower rate of corporation tax. At the end of 10 years, however, any company that's not adopted a new social purpose charter is actually denied the ability to operate in that country. And so all businesses are giving up selfishness as their core purpose. And their core purpose is making the best shoes or growing the best carrots or making the building the best apartment buildings, whatever it might be. The way it used to be in the 1950s, actually, before the financial controllers took over and made every business a source of making money. And so the asset class, the private equity companies that are purely in there to let's buy up all the veterinic, let's buy up the old folks' homes, let's buy up the nursing homes, let's buy up the daycare centers, purely because they can squeeze money out of them, they'll be eliminated by law, because then they weren't social purpose businesses. And then we need a global treaty with countries working together to bring in social purpose charters across the world, because we cannot afford to have a world where the common theme of every business is making money regardless of the cost. The cost to nature, the cost to the climate, the cost to workers, and the cost to communities. That is immoral and unethical, and we shouldn't be running our world on that basis. But that is the current operating system. It's the algorithm that governs the way all businesses and banks and finance companies work, which where the only goal is to make money. And there are this socially responsible investment, and that's great. It's probably about, I think, you know, 10% of the world's investment is now being invested socially responsibly, but 90% is still just chasing the highest return. And some of the worst things happening in the world, you know, the illegal deforestation, the illegal fisheries are being financed by, you know, socially irresponsible money by that is basically destroying our planet and destroying nature purely so that people can get rich in an offshore bank in the Bahamas. That's wrong. That has to end. I'm sure you know you're agreeing with that. Yeah.

SPEAKER_02 50:53

The extending the social purpose charter to multiple countries, I think, is perhaps key because of the extremely great inequalities between conditions in different countries and the resulting trade imbalances. Um, for example, Germany kick-started the solar panel industry with its feed-in tariff, and they were hoping to have a manufacturing industry making solar panels. They were completely undercut by China, and anyone who invested in solar panel manufacturing in Europe, and I briefly did, lost their money. So I mentioned my career was in industry. So I've worked all my life in private industry, uh large private industry usually, except for the five years in Nicaragua, and I'm certainly not against market forces. I've also seen Soviet products. There were many Soviet products in Nicaragua, vehicles, fridges, and so forth. And I briefly visited um very briefly the Soviet Union and Cuba. And the contrast is astonishing. You know, I mean Gorky Street, uh most prestigious street in Moscow in uh 1989, so they were used abacuses to add up. It it was extraordinary, the contrast. And you can see why, because of the lack of competition, the lack of consumer choice, and so on. So that's not a place we want to end up. But also my early career was in some of the giants of British industry. First job was in the biggest private company in the UK, which was called GEC, similar to the American GEC, but a general electric company instead of corporation. They made everything from power stations to trains to fridges to light bulbs to colour televisions. It doesn't exist anymore, and most of that stuff isn't made in Britain anymore. A few things are, and awful lot isn't. I mean, that basically is the effect of globalized competition, and to some extent automation, but very much globalized competition. So the UK's manufacturing base has completely been stripped away in my lifetime, and we really only have one or two giant engineering companies left, principally Rolls-Royce aero engines.

SPEAKER_01 52:49

And uh that's really difficult stuff to deal with. Counter that, you you gave the example of the solar company in Germany, but in Denmark, the company Vestas, which was set up by Danes in 1945, now employs 29,000 people globally. They're the large, seventh largest wind turbine company in the world. They're based in Denmark. And in Mondragon, in the best company of Spain, set up in the 1940s with the network of cooperatives, they now have 70,000 people who they're employing, mostly in machinery manufacturing type things, employing 70,000 people globally in a hundred different cooperatives, where the ratio between the highest worker, paid worker and the lowest paid worker is like one to six, whereas in America it's one to six hundred, or if it's a it's a hedge fund manager, it's one to four thousand. So they have sustained manufacturing in the Basque region of Spain because they were cooperatively managed and because they work really well with their own research laboratories. If one co-op needs to close down, they've got six other ideas ready to start it up again. It's not inherent to the global system that manufacturing has to fail. It's a choice of neoliberal governance for the government never to get involved and to allow companies, shareholders to run the show. Whereas in, I don't know how Vestas works with its shareholders, but in Mondragon, the workers control the business through their voting system democratically because they own the business. So there are other ways of doing this.

SPEAKER_02 54:20

It's quite fun that you gave the example because I invested in the solar power company, I invested in investors. The Vesta shares are still worth something. There are not very many of them. But um it's a greater example. But China has moved more slowly into wind energy, but now it's very big it is. So I mean we'll see how that plays out across the board. I mean, why on earth? You mentioned furniture. I agree with you what you were saying about uh the sort of knick-knacks that made in made in craft markets. But I'd like to see, as happened in a village I lived in once in Italy, and also in my wife's village in Spain, the local carpenter makes your bed and your wardrobe and your dresser. That's gone. So it would be good to get back to where it was possible to manufacture locally in a country, relatively low-tech items like furniture. I was astonished when um during the period when Trump was applying all sorts of tariffs to China, they interviewed a sofa retailer in the United States. All their sofas were made in China. And you think, has the United States got wood? Has it not got cloth? Has it got the ability to knock together a sofa? They have to be transported from the other side of the world. I think we're on the same, we're on the same page on this, but I just see it as a very large issue. And designing those cross-border arrangements, and I don't want to penalize poorer countries, quite the opposite. I've always been keen on third world development as it was called back then. Uh, and I think we need to aim for a convergence where living standards become less excessive in consumption in advanced countries and uh more reasonable, basically because big businesses are out to exploit as they can, and that's the driver behind them.

SPEAKER_00 55:53

I'm gonna give Donald a chance to speak a little bit about how his book is different because you've you've already kind of covered that, and then I'm just gonna ask you both to read an extract. So, Donald, how is your book different from some of the other ones out there on economics and improving the system and how it sort of treats people and planet?

SPEAKER_02 56:15

Over the many years I was reading about this, I kept on looking for a book which would do what I've tried to do in my book. I spell out how does the system actually, the capitalist system or the economic system, what you want to call it, that we have mainly in the West actually work. And when I read mainstream economic books, there just seemed to be so many obvious flaws. And I I mentioned some of them uh earlier. But uh there are plenty of books criticizing the economic system we have, and plenty that suggest alternatives. There's the fairly well-known Donut Economics, there's uh books by Jackson Post-Growth, many others. And typically they point out all the problems we've got that have been caused by the uh the economic system we have, and say that we should do something different, but very few of them actually take on the job of rewriting the sort of economics that you'll find in a standard textbook, a basic textbook, and pointing out the flaws in it. So that's what I've attempted to do.

SPEAKER_01 57:15

So my book is called The Economics of Kindness. It's subtitled A New Ecological Civilization, and chapter one is called The Great Mistake, and it starts like this. Our world needs more kindness, people need more kindness, nature needs more kindness, but we need it deep within our economies where so many of our troubles begin. We've been told a thousand times that the free market economy is the best possible kind of economy, but for so many people and for nature it's just not working. Surely there must be a better way. Our capitalist economy has been built on the primacy of selfishness. What's the alternative? In this book, I hope to convince you that it's the economics of kindness, which can use to achieve massive transformative change and build a new ecological civilization. And it's not just an idea, it's a very real thing. But first, we must address the question that's causing so much anxiety. Why are things in such a mess? We've got the rising cost of living, the housing crisis, and the ridiculous increase in inequality alongside the tax-avoiding billionaires. We've got increasing loneliness, we've got refugees and desperate immigrants. In America, we've got oligarchy, kleptocracy, and billionaires who believe they're entitled to rule the world. And all the while, with ominous drum beats of warning, we've got the climate crisis, the collapse of biodiversity, and the reality that we're overshooting Earth's ecological boundaries, and the horrible ongoing wars. And just when we need calm, decisive action, we've got social media chaos, increasing anxiety, anger, and hate. Young Canadians aged 16 to 25 were surveyed in 2022. Almost three-quarters said they felt frightened about the future. So enough. It's time for change, time for determined hope, time for moral ambition, as the Dutch historian Rutger Bregman puts it in his Clarion Call to Action. In the pages of this book, you'll find a solid analysis of how we got into this mess and a practical guide for not just how we can get out of it, but for how we can build an economy based on cooperation and kindness as the foundation for a new ecological civilization.

SPEAKER_02 59:21

My book's called An Economy of Wants. It's a play of words in English. It can mean an economic system based on the promotion of wants or desires, because our economic system continually encourages people to consume more. It could mean an economic system that leaves many of us in want, that's in poverty. And it could mean an economic system where we exercise frugality or restraint and economize on how much we want to consume. In Spanish it's been translated as Una Economía de Carrera. There is a website for the book which is www.economyofwant.uk and the website is in English and also in Spanish and one to other languages. The website adds to the book in that it contains some short articles and summaries of the book. And uh also I really wanted this to be in the uh international because it's as important for me that we have a healthy and sustainable economy in any part of the world, not just the country I live in. Summary of the book's main argument. So our current market economy can only provide such employment as it does and counteract the loss of jobs to automation by producing an ever growing volume of stuff and persuading the better off to want it. This continual growth in consumption, combined with overpopulation, is destroying the environment we depend on. Even at this unsustainable level of consumption growth, the economy still fails to provide much of humanity with a secure livelihood, leaving them in want of life's basics. There is no natural full employment and equilibrium to which the economy tends. Furthermore, since money can be made more easily out of addiction and dependence than out of restraint and self-sufficiency, much of the consumption growth consists of products with limited benefits or that are actively harmful to health, well-being, and community life. Our challenge is to end catastrophic consumption growth while simultaneously enabling all of us everywhere to have the opportunity of a good life. The solution has to lie in government regulation from the local level to the international, with the environment and fairness as the major goals, and preferably with the best democratic and pluralist checks and balances that we can elaborate on citizen participation in setting society's direction. Only by taking control of the market can we ensure that instead of it dictating to us, it serves us.

SPEAKER_00 1:01:55

Thank you so much to Donald and Guy for joining me for such a wide-ranging conversation about economics, fairness, climate, work, housing, and what a better future might look like. And if you enjoyed this episode, please do follow the science intersection, leave a rating or a view, and share with someone who might be interested in how economics shapes everyday life from housing and work to health, community, and the planet. See the show notes. Thanks so much for listening, and until next time.