BRAINPOoL Final Conference: Towards a Beyond GDP Narrative

Beyond GDP: From Measurement to Politics and Policy

Development of a compelling narrative

Paris 24 March 2014

1. The challenge

2. Labour markets, green economy and the narrative

3. Theoretical underpinning

4. Next steps

A narrative creates appeal and credibility

• A good narrative wins votes – it has to have appeal but also give credibility to a party’s programme – by also explaining

• So Reagan’s narrative had appeal and credibility

– Cut taxes (direct voter appeal)

– We would be better off if we got the government off our backs (explanation)

– Based on a neo-liberal version of neo-classical economics (theory, credibility)

• It is easy but not enough to attack this kind of thing – we need a Beyond GDP narrative of this type and we don’t have one

• ‘Wellbeing’ and ‘sustainability’ associated with what have been at best politically weak messages (happiness, constraints)

• So what is electorally appealing about new policies?

• And what kind of theory will give this credibility?

1. The challenge

2. Labour markets, green economy and the narrative

3. Theoretical underpinning

4. Next steps

The ‘GDP’ approach to labour market policy…

GrowthEfficient Labour markets

Jobs

…is associated with a slogan summarising the narrative

GrowthEfficient Labour markets

Jobs

Jobs and growth

The ‘beyond GDP’ approach aims to maximise wellbeing

GrowthEfficient Labour markets

Jobs

Good Jobs(security, work life balance, conditions, pay etc)

…and recognises there is sometimes a trade-off

GrowthEfficient Labour markets

Jobs

Good Jobs(security, work life balance, conditions, pay etc)

It is difficult to optimise

GrowthEfficient Labour markets

Jobs

Good Jobs(security, work life balance, conditions, pay etc)

So the aim is to create the conditions to soften trade-off

GrowthEfficient Labour markets

Jobs

Good Jobs(security, work life balance, conditions, pay etc)

Economic structures and norms

…requiring a full range of government actions…

GrowthEfficient Labour markets

Jobs

Good Jobs(security, work life balance, conditions, pay etc)

Economic structures and norms

Active government – the ‘entrepreneur-ial state’

…and an alternative narrative

GrowthEfficient Labour markets

Jobs

Good Jobs(security, work life balance, conditions, pay etc)

Economic structures and norms

Active government – the ‘entrepreneur-ial state’

Jobs and growth

The state securing good jobs

Can this convince?

• We are not there yet – growth is still seen as the sign of economic policy success

• However…

– jobs always feature in polling as a top concern, and

– some (UK) evidence of shift in focus from growth to whether life is getting better

• Potentially opening space for

– median real wages

– other job related drivers of wellbeing…security, equality (fairness), decent living standards for all, good work

• And the broader message:

– markets deliver growth but growth doesn’t deliver these good things – so we need collective (government) action….

As sometimes framed, the green economy problem is unsolvable

xMaximise wellbeing by maximising aggregate consumption

Live within environmentallimits

There are two strategies dealing with this – green growth…

A green economy

Maintain growth and jobs by investing in the green economy

Live within environmentallimits

…and decoupling wellbeing from consumption

A green economy

Maintain growth and jobs by investing in the green economy

Live within environmentallimits

Maintain wellbeing growth but restrict or change aggregate consumption growth

Both involve lower/changed aggregate consumption vs b.a.u.

A green economy

Maintain growth and jobs by investing in the green economy

Live within environmentallimits

Maintain wellbeing growth but restrict or change aggregate consumption growth

So other elements have to balance consumption in the narrative…

For example…

• FAIRNESS

– Those who can afford the burden pay their share

For example…

• FAIRNESS

– Those who can afford the burden pay their share

• SECURITY

– Reducing environmental risk – but also jobs, housing, income, health

– Language of “securing” and “protecting”

For example…

• FAIRNESS

– Those who can afford the burden pay their share

• SECURITY

– Reducing environmental risk – but also jobs, housing, income, health

– Language of “securing” and “protecting”

• WEALTH

– Collective and individual; linked to security – and basis for quality of life

– Language of “building” and “improving”

For example…

• FAIRNESS

– Those who can afford the burden pay their share

• SECURITY

– Reducing environmental risk – but also jobs, housing, income, health

– Language of “securing” and “protecting”

• WEALTH

– Collective and individual; linked to security – and basis for quality of life

– Language of “building” and “improving”

• QUALITY OF LIFE

– Now and in the future

– Based on public engagement to define the important, therefore local

1. The challenge

2. Labour markets, green economy and the narrative

3. Theoretical underpinning

4. Next steps

There is a wealth of theory that can be drawn on – for example…

• Outcomes– Subjective wellbeing data as a guide to what to aim for (Wellbeing science)

– Worker interests – including fulfilment (eg Marxists)

– Social relations (Communitarians)

– The resources and capabilities needed to function (Capabilities approach)

• Explanations– The natural tendency of markets to create inequality (eg Galbraith)

– The natural tendency of financial markets to create instability (eg Minsky)

– Institutional power relations rather than markets as key to explaining (Institutionalists)

– Land as a factor of production (Ecological economists)

– Social reproduction which occurs in the home (Feminist political economists)

• What we do to get there– Government as the legitimate and effective driver of outcomes (Social democrats)

But more work needed of course – both to synthesise and create theory

1. The challenge

2. Labour markets, green economy and the narrative

3. Theoretical underpinning

4. Next steps

Next steps

• Democratic renewal– Work with people – including at local level – to define what is important, eg jobs– Link to work with parliamentarians (participative with representative democracy)

• Identify policies– What is needed to deliver what is important? How is this new?

• Communications– Different messages and language for different audiences – same fundamentals– Positive messages reflecting what is important

• Indicators– Part of the narrative: research effectiveness of alternatives (index/dashboard)– Statisticians to develop their role as agents of change

• Business– Establish the business version of the Beyond GDP narrative

• Link to theory of the economy– Synthesise existing work (eg how will the economy work at low/zero growth?)– Test starting axioms (neo-classical vs positive economy)

• Progress reports – (eg mapping of the 28 EU governments)