In the new Netflix sensation Don’t Look Up, two astronomers, played by Jennifer Lawrence and Leonardo Di Caprio, discover a massive comet heading towards Earth, and desperately try to warn the US president, played by Meryl Streep.
Their hope is the government will take action to avert catastrophe while there is time. Their efforts are subverted by a combination of self-serving political cynicism, billionaire business interests, a media that sees its job as respecting those interests and that cynicism, and a population conditioned not to look up.
It is an obvious metaphor for the threat of climate breakdown, where warnings and pleadings from climatologists and scientists and from a growing number of campaigners, ecological economists and others, are being ignored, trivialised and sometimes even ridiculed by political insiders.
But after 40 years marked by the dominance of neoliberal pro-market economic policies, the metaphor can be extended to almost any challenge requiring a serious response, particularly where it involves standing up to vested interests.
There’s more amiss than vision and courage. Public services no longer have the capacity they did to respond to problems like long-term climate change and short-term pandemics.
Their administrative and decision-making capacity has been stripped away, as has the surge capacity in health systems and in many countries the ability to react to disruptions to supply chains – all in the name of efficiency, but with the effect of creating fragility while contributing to inequality and extremism.
Hayek, Friedman and Buchanan got us here
Neoliberalism is rooted in the work of three Chicago School economists: Friedrich Hayek, Milton Friedman and James Buchanan.
Hayek, though a famous name, was probably the least influential of the three. He saw mixed economies, market-based but regulated by governments, as inevitable steps on the road to totalitarianism.
Friedman espoused a naïve and outdated theory of money, which was no sooner adopted than abandoned in the early 1980s, but like Hayek saw freedom in low taxes and championed privatisation and deregulation. It was Friedman who argued that many people had to remain unemployed in order to suppress wages.
Buchanan, like Friedman, argued that politicians and public servants could be trusted to act in in their own interests at a cost to society, and that almost anything that could be done by public servants could be done better by the private sector.
In the 1980s the trio effectively took over the conservative side of politics in high-income countries. Their ideas also helped intimidate those on the other side, including the Hawke-Keating Labor government in Australia, and every Labor front bench that succeeded them. That influence persists to this day.
Mazzucato, Kelton and Raworth want to get us out
In her book Mission Economy, the University College London economist Marianna Mazzucato imagines a different relationship between the public and private sectors: a proactive, problem-solving government cooperating with the private sector to address, among other things, climate change and the problems and opportunities associated with a rapid transition to sustainability.
This would require rebuilding public capacity and an approach to government experimentation and risk-taking not seen for 40 years.
Aligned with her are modern monetary theorist Stephanie Kelton and ecological economist Kate Raworth.
Kelton’s The Deficit Myth describes how modern monetary systems work and demolishes the metaphor of the government as a household used by neoliberals to push for balanced budgets and minimalist governments.
Kelton points out it is normal for governments to run deficits (Australia’s Commonwealth government nearly always has) and that these deficits allow the private sector to avoid building up debt.
Governments that create their own currencies such as America’s or Australia’s are well-placed to guide the private sector to serve a public purpose.
While both Mazzucato and Kelton discuss what this means, and give examples, it is Raworth’s book that most clearly identifies the goal governments should aspire to.
That book is called Doughnut Economics. It sets out a framework for providing everyone with an opportunity to enjoy a secure, dignified and connected life, while respecting nine environmental planetary boundaries that are prerequisites for the maintenance of the planet.