A wellbeing economy is more than a green, social sticking plaster

WEAll Scotland response to the Programme for Government in Scotland

by Lukas Hardt and Katherine Trebeck; 28 September 2020

Earlier this month, the Scottish government published its Programme for Government, setting out its plans until the election for the Scottish parliament next year and explicitly committing to building a wellbeing economy in Scotland; an economy that is “fairer, greener, more prosperous”.

We welcome that commitment. And lot of the measures go in a promising direction.

For example, the government recognises that rebuilding the economy after COVID needs to simultaneously contribute to climate change mitigation and other environmental goals. The promised investment in energy efficient buildings, green sectors, tree planting and peatland restoration is important and to be welcomed, even if it still falls short of the scale necessary.

There are nods to the importance of social enterprises, community wealth building and the 20-minute neighbourhood. Some money is provided for cycling infrastructure. The emerging Scottish National Investment Bank could be used to provide the long-term investment we need for a just and green transition. The Youth Guarantee could be a great way to provide meaningful, well-paid job opportunities (although it could also become another way to subsidise poverty wages). Adopting the UN Convention on the Rights of the Child into Scots law gives society real power to hold the government to account.

But, despite the promising direction, the Programme for Government doesn’t live up to the ambition of a wellbeing economy. Building a wellbeing economy is about transforming our economic system so that it delivers social justice on a healthy planet, the first time round. That last phrase is important, because the Programme for Government, and much of our social policy debate in Scotland, is still too much about cleaning up and redistributing after the fact.

What do we mean by that? Our current socio-economic model is failing because it tries to deliver good lives, but does so by taking the long way round. The approach can be described in three steps¹:

1. Get the economy to grow bigger, but don’t fret too much about the damage to people or the environment that this does.
2. Second, sequester a chunk out of this economy via taxes.
3. Third, channel some of this money into helping people and the planet to cope with step number 1.

The limits of this approach are clear – it implicitly concedes to damage and harm being done to people and planet by stage 1; such damage is now so great that actions in Step 3 cannot keep up, so people and planet are inadequately repaired; and in a world of finite resources and ever-more apparent limits to growth, the risks of step 1 are mounting.

Unfortunately, the main thrust of the Programme for Government seems largely confined to such a model. Step 1 policies include the £100 million “Green Jobs Fund” or the “Inward Investment Plan” aimed to boost GDP. Yes, the government is now putting a strong green slant on such policies, which is good, but fundamentally such policies are still about stimulating more growth within the current system. That won’t work.

On the other end, the government needs to spend heavily on Step 3 policies to patch up social inequalities and environmental damage.

Consider the high-profile announcement of a Scottish Child Payment and Child Winter Heating Assistance; or the Tenant’s Hardship Loan facility, which will help tenants, but is only shifting their debt from landlords to the government; or the £150 million of additional funding quietly earmarked for additional flood protection measures (and, while you’re at it, compare the latter amount to the Green Jobs Fund – telling isn’t it?). Such policies are good and important if we are to take care of people in the face of an economic system that generates inequality, financial insecurity and poverty and climate chaos.

But the real tragedy is that they are necessary in the first place.

Heralding redistribution as progress and patting ourselves on the back for helping people survive and cope with the current system is a sad reflection of how low our ambitions are.

A wellbeing economy is about attending to root causes – looking upstream. Designing the nature and configuration of the economy so it enables people to live good lives first time around rather than allowing so much damage to be done – often in some outdated and misguided pursuit of growth – and then thinking we’ve done well when we patch up that damage. A wellbeing economy agenda asks more of the economy. It starts from the premise we can no longer be content to patch and heal and repair – we need to construct the economic system in a way that delivers social justice on a healthy planet. From the outset.

Building a wellbeing economy requires changing the rules of the game and redesigning our institutions, our infrastructure and our laws. It means embracing the potential of pre-distribution rather than re-distribution and measuring our progress in a way that is better aligned with what is really needed. We already have lots of ideas on how to do this.

Some of what is needed is already being done in Scotland – just too tentatively. Take support for alternative business models that put people and planet before profits, such as worker-owned cooperatives or social enterprises. There are good steps towards community wealth building to keep wealth in the place where it is created and reform of land ownership rules (and that of other assets). The National Performance Framework is starting to broaden goals away from simply GDP growth – but hasn’t yet knocked GDP off its ill-deserved pedestal.

While the Scottish government’s powers are limited, it could use planning and procurement and business support much more proactively to cultivate the sort of business activities required for a wellbeing economy. Radical transformative action can be done in small steps. It is time that it takes its own rhetoric on the wellbeing economy seriously and initiates transformative change.

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[1]Trebeck, K., and Williams, J., 2019. The economics of arrival: Ideas for a grown up economy. Policy Press, Bristol, p. 86