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Reducing Material Consumption through Economic and Social Transformation

Elinor Hurst

A recent paper by University of Melbourne social science postgraduate Timothy Redfern [1] outlines a strategy for reduced material consumption applicable to OECD countries. The strategy covers the domains of political economy, governance, green technology, and socio-cultural norms.

In the area of political economy, worker-owned cooperative enterprises are recommended as a way to quell the relentless pressure for growth under capitalism. Since the workers own the enterprise, there is no incentive to cut jobs, and productivity gains are instead captured by the worker-owners themselves and distributed to themselves either as profit or additional leisure time. There is no need to expand the business as there is not a constant push for increased profits from shareholders.

However, there is more required to ensure ecological limits are respected. Macroeconomic oversight of the economy would be needed to achieve this, by identifying rates and scales of resource throughput and ecosystem service usage, and implementing mechanisms to restrict economic activity within these constraints.

The author then goes on to outline a four-pronged transition strategy to implement such an ecological macroeconomic model.

Firstly, governments can use policy options to encourage worker-owned cooperatives by various legislation, including “right of first refusal” to workers to buy an enterprise when it is sold, government assistance with establishing a co-op, preferential purchasing of co-op goods and services by governments, and various subsidies and tax exemptions.

“Tongbong Cooperative Farm” by Clay Gilliland is licenced under CC BY-SA 2.0

Secondly, ecologically bounded macroeconomic management could be introduced via a sort of corporatist governance model à La Northern Europe, entailing bringing together the various institutions of civil society, government and the economy to participate in joint economic negotiation and decision making. [Bob Hawke attempted something along these lines, albeit a more neoliberal version, with his National Economic Summit and Accord project.] The author asserts that the examples of successful corporatist governance models in Scandinavia and some European countries mean that this sort of central planning by the various interest groups is feasible. For it to be successful, environmental representatives such as environmental scientists and ecological economists would need to be important members of these economic planning committees.

Thirdly, there would need to be a national plan for transitioning energy to renewable sources, and investing in green technologies. The state would inevitably need to be a leading investor and driver of these processes, due to the lower short-term returns to capital involved. The author sees an expanded role for government in the economy as part of this shift, entailing increased taxes and national ownership of assets.

“Renewable Energy” by Bureau of Land Management is licenced under CC BY 2.0

Fourthly, the culture of consumerism needs to be overcome. The author makes the point that high inequality drives status anxiety, which in turn leads to much unhelpful consumption. Status consumption does little in the long term to improve wellbeing, as it is part of a cycle of anxiety to prove one’s worth and identity via material goods. So he recommends reducing inequality to address this, via such mechanisms as reduced pay-gap ratios within business, caps on bonuses [employee co-ops incidentally have a better track record with these policies], a progressive tax system, and a universal welfare state.

The advertising industry also needs to be tackled to limit its power regarding who it may target, for example, children and young people. [Recommendations for more far-reaching restrictions have been made by other commentators, for example by Jason Hickel in Less Is More, including banning of outdoor advertising, quotas on ad expenditure, and legislation against psychologically manipulative techniques.]

“Advertising” by Jeremy Keith is licenced under CC BY 2.0

Of course, a profound sociocultural change would be needed to bring all this about and sustain it. He quotes Tim Jackson in advocating that we start with redefining our notion of “prosperity”. We should define it as: the conditions which allow us to flourish and be happy – to participate meaningfully in society, to enjoy fulfilling relationships, to experience trust and belonging within community, while having our basic needs met – instead of simply affluence or income.

I note that ERA members Assoc Prof Steven Hail, Professor Philip Lawn and Gabbie Bond are leading instigators locally in promoting this conceptual change through their work in the Sustainable Prosperity movement.

  1. Source: Redfern, Timothy “Reducing Material Consumption through Economic and Social Transformation: Outline of a Reform Strategy for Developed Nations (2016). 

Timothy Redfern possesses a BA (Phil) degree from Monash University and a Masters degree in Social Policy from University of Melbourne.

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