17 February 2013
Let’s play fantasy economics. Things could really get better
An article by Andrew Simms, NEF, for the Guardian, 17 february 2013

Do you grudgingly accept there is no fundamental alternative to how things are, hard times and difficult choices? Then come to Goodland. You might want to live here.

Its president refuses the state mansion. He gives away 90% of his pay, living on the national average wage to share in the struggles of his people. Goodland has a new constitution, written by citizens. When its financial sector fell apart, speculators had to take their losses and the guilty were taken to court, not given a public bailout.

The country has a dynamic, largely mutually owned, local banking system. It avoids bad risk and bends over backwards to help small businesses. In Goodland, human wellbeing is more important than economic growth. There is a national plan for good living, free health and education services, subsidised childcare allowing for a more equal workplace, and support for the elderly. It has a law enshrining protection of its life-supporting ecosystems that stands above all other laws.

Goodland’s cities are green and grow healthy, organic food for the inhabitants. A phase-out of most fossil fuels is planned by 2017, and its business sector has large, intelligently connected and productive cooperatives. A shorter working week is available by choice.

Utter fantasy? No. Goodland exists. It is just a little, well, spread out. Each aspect can be enjoyed in the real world, just not all in the same place. It’s like fantasy football, where you build your perfect team from all known players, but better. Fantasy economics is not limited by the supply of players, but rather grows from emulating best practices wherever you find them.

The president mentioned above is José Mujica of Uruguay. He lives on about £450 per month. His presidential guard is two policemen and a three-legged dog. He drives a 1987 VW Beetle and criticises the rich countries’ development model, berating other world leaders’ "blind obsession to achieve growth with consumption".

After financial meltdown in Iceland, the "pots and pans" revolution led to a new citizen-drafted constitution, adoption pending, that actively engaged half the electorate. Rather than making the public pay for the crisis, as Nobel-winning economist Paul Krugman points out, Iceland also "let the banks go bust" and, instead of placating financial markets, "imposed temporary controls on the movement of capital to give itself room to manoeuvre". In Porto Alegre in Brazil, since 1990, citizens meet every week to decide how a big portion of the city’s public purse gets spent. It’s called participatory budgeting and in seven years led to doubling access to proper sanitation in poor neighbourhoods.

One reason Germany was less hit by the bank crisis is because 70% of the sector is in small or community banks. By comparison, in the UK the big five banks hold 80% of mortgages and 90% of small and medium enterprise accounts. The German banks have a dual mandate, having to be useful as well as profitable. They’re also mostly mutually owned, don’t indulge in risky speculation, have local knowledge, branch autonomy and decision making.

In Spain, the multi-headed €14bn Mondragón cooperative, with over 80,000 employees, demonstrates that less self-interested company ownership models can succeed at scale. And the successful uptake by the Dutch of a shorter working week suggests we aren’t condemned to work ourselves to death, whatever the coalition says.

Bhutan famously measures its success not by using GDP – simply a measure of the amount, not quality, of economic activity – but by assessing Gross National Happiness. This broad, composite indicator uses 151 variables including: good governance, education, health, ecological resilience, community vitality, wellbeing, time use, living standards and cultural diversity.

After the UN General Assembly adopted 22 April as Mother Earth Day, Bolivia adopted its Mother Earth Law in 2010. The law requires all current and future legislation to accept the "ecological limits set by nature". In practice, it means pushing a transition from fossil fuels to renewable energy, and environmentally auditing companies. Elsewhere, Nicaragua committed to a near-complete phase-out of fossil fuels by 2017, while Cuba’s organic, urban farming movement has greened cities and boosted public health.

In Ecuador, there is an overarching National Plan for Good Living that rejects "most orthodox approaches to development". It embodies what it calls five revolutions: constitutional and democratic; ethical; economic and agrarian; social; and "in defence of Latin American dignity". The aim is to reassert a country’s sovereign authority to put its own social and economic objectives above that of the markets.

As Britain agonises about the affordability of services, Denmark’s tax system pays for free health and education, home help for the elderly, and about three-quarters of the cost of childcare. Far from harming the economy, higher taxes stimulate investment in infrastructure, education and R&D.

To suggest Britain has no economic alternatives to its current chosen path is a self-serving political deception. Only our will and imagination restrain us. Here is one, possible, Goodland. Why not build it, or create your own?

Andrew Simms is a fellow of the New Economics Foundation (nef). His book Cancel the Apocalypse: the New Path to Prosperity is published on 28 February by Little Brown.

The Guardian