Various events of late have reminded me to look beyond the immediate horizon and this was all brought together very effectively when listening to Ian Johnson, General Secretary of the Club of Rome, at a DHI seminar I chaired last week.
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Ian has a remarkable track record in two areas that might loosely be termed development economics and environmental economics; having been a vice-president of the World Bank before taking over at this Geneva-based global think tank. The Club of Rome is responsible for stimulating all the thinking over the past 30 or 40 years on the limits to growth. This thinking has never been more relevant globally than at the present economic and social conjuncture; as Ian phrased it we are at "an inflexion point in global affairs". Further, the same issues matter domestically. There are key issues to consider for Scotland as part of our reflections during the continuing constitutional debate.
We are faced with five key global challenges, which are inter-related and for each of which our view - national and globally - on "values" really matters. To simplify dramatically, there is more to economics than maximising GDP and more to life than maximising personal affluence. To what extent do we wish to take account the interests of others, at home and abroad in the short and the longer term?
In Ian's view the biggest challenge across the world is that of finding jobs for all who wish them. We know in Scotland and the rest of the UK that underemployment is rife even if unemployment has of late surprised on the downside. But even in rural Africa capital is being substituted for labour. As we head for a global population of between seven and nine billion is the concept of "jobs for all" really feasible? If so how? Can we create more jobs while also making more efficient use of other scarce resources?
That takes me to the other global challenges. Ecologically, excess and unsustainable use of natural resources sit there alongside climate change - with a "tipping point" faced in a decade or so. Then we may be living towards the tail end of the cheap food world - note the commodity price spikes in recent years. Global demand for food is set to double by mid-century. This will result both from the massive population increase and the move towards a much enhanced middle class demanding more livestock products which in turn demand massive amounts of more feedstock. And already we waste some 30-40% of the food we produce!
Another challenge comes from the financial and banking sector, where I agree with Ian that there is evidence of an increasing divorce from the real economy. And then there is the continuing crisis of poverty in both the developed and developing world. In the latter the challenge may be more about relative than absolute poverty, but that diminishes neither the scale of the challenge nor the necessity of again reflecting upon values within our society.
So these are the challenges - jobs, ecology, food, finance and poverty. All are linked and all find their root cause in the actions of humans. To again cite Ian "we created them all; so we can fix them".
Bringing this home to Scotland, the first question has to be what kind of nation we want and how we wish to relate to the rest of the world. I have mused in the past regarding clarity for policy makers as to our "objective function" - to use horrible economist jargon. What are our priorities? How do we see the desirable trade-off between increasing aggregate affluence and the division of the cake?
Are we satisfied with the present increasingly skewed distribution of income and wealth?
Do we care sufficiently about the future to accept a lower growth rate to enhance sustainability domestically and globally? Do we care about nature - or about potential poverty and lack of jobs for people we do not know? To what extent are we prepared to take risks with the future?
These are difficult questions but we should be reflecting upon issues such as these at this economic and potentially political "inflexion point".
We should make an explicit decision as to whether we are content to proceed broadly as in the past or wish a move to what might be termed "more enlightened" public policy. Domestically the latter might include seeking an end to the bonus culture to help reduce income and wealth disparities; working to bring the financial sector back to base - banks as servants of the economy even; higher taxes on (scarce) resource use and lower taxes on (abundant) labour; an end to early planned obsolescence - repair rather than scrap.
Internationally, we would need to think of ourselves as one element of an inter-related world. In all ways we need to be less myopic and press for longer term thinking by all. Policies need to look to the next generation rather than the next election. Perhaps I have provided some food for thought during the half-term week.