In 1992, Rio de Janeiro was the setting for the establishment of 17 Sustainable Development Goals. These were a call to action for nations across the world to achieve objectives such as ending poverty, fighting against climate change, promoting peace, and ensuring access to education. Goals such as number 8 (decent work for all and economic growth) and number 12 (responsible consumption and production patterns) refer to the use of inclusive and sustainable economic practices to drive progress for all. But it this really possible? Can the economy improve the world?
Enrique Lluch Frechina is a lecturer in Economics at the CEU Cardenal Herrera University. In his latest book, Una economía para la esperanza, he questions the economic paradigm in which our lives take place. We spoke to him about how the economic – and social – model would change if we moved towards an economically sustainable system.
“A sustainable economic approach is not an easy option – there’s a long road to travel. But nothing worthwhile in this life is ever easy”
Sometimes, the notion of the sustainable economy is confused with that of the circular economy. What is the main difference between them?
The priority in most economic systems today is that of growth. To achieve that growth, to have more than before, we need to produce more and increase our GDP. The thing is that you can’t do that without using resources (work, machinery, natural resources, etc.). What some of us as economists are saying is that the objective of the economy doesn’t necessarily have to be to keep on producing more, to have more. So, the sustainable economy is a move beyond growth and focuses on maintaining a level of production that is sufficient for us to live. That means putting in place a system that ensures that all people, including those who have the least, have enough to live.
And the sustainable economy is not just about the people of today, but about future generations, about those who will be alive in 100, 200 or even 500 years. In short, it’s about not exhausting the resources available so that the possibilities for life of future populations are the same as the ones we enjoy today.
The circular economy is not in itself an objective, but an instrument with which to get there. In fact, it’s an old idea that has been used for a long time: it’s about ensuring that everything that we spend on resources in the economy is not wasted but can be reused. It’s about completing the circle. It’s that familiar idea of reduce, re-use and recycle to ensure that there is no waste. In other words, you take the resources that have been used along those that have not and you put them both to a new use.
“What some of us as economists are saying is that the objective of the economy doesn’t necessarily have to be to keep on producing more, to have more”
However, the circular economy can also occur within a sustainable economic framework or one of growth. You can seek growth with a circular economy in the sense that you can produce more things and then try to recycle everything. I think that the circular economy is a good approach and is a positive thing, but within a sustainable economic framework, not as part of a way to generate economic growth. You cannot produce more and more infinitely – you end up running out of resources.
What has to happen for us to be able to transition from a growth economy to a sustainable economy?
We need to raise public awareness: we need people to buy into changing the economic model and, as part of that, into changing their approach to life. The main obstacle for this change to happen is the fact that many people believe that if they have more, they are better off. What they want is more. This mentality of economic growth has installed itself in both business and people.
The economic and environmental doomsayers claim that, if nothing changes, the planet will collapse. Some of these apocalyptic forecasts are science-based, so their forecasts may be right. But, in my opinion, you’re not going to change what people think by constantly predicting the end of the world.
In short, to get the model to change, we need to change people’s mentality first, and that’s not going to happen overnight. It’s going to take time. But someone has to get the ball rolling.
You talk of the need for a social change. How can we make this happen?
Firstly, by convincing people through argument. We have to know how to construct our arguments, because changing and redirecting our society towards different objectives is better for everyone.
Secondly, by persuading people through appealing to their emotions. This is almost more important because most of us take decisions and act based on our emotions and instincts. The more people are rationally convinced and emotionally persuaded that sustainability is a real option for their lives and business, then the easier it will get. And by “emotionally persuaded” I mean that they should feel this in their own lives and really believe in their hearts that this change is a good one.
“The sustainable economy is not just about the people of today, but about future generations”
What three positive arguments would you put forward to convince sceptics about the value of a sustainable economic approach?
Firstly, I’d say that, by making “having enough” rather than “having more” the key to our economic approach, we will have lives which are more fulfilling, happier, less demanding and more rewarding. At a personal level, when we change our economic model and don’t think about always having more, but having enough, then that will give us a chance to live more peacefully and to focus on what’s more important, enabling us to feel more fulfilled. It also takes away stress, demands placed on ourselves, and worries.
The second big argument is that, with a sustainable economy, there would be more people with enough. We could build a society in which even the people who have the least have enough. Which is not to say that everyone would have the same amount.
“We could build a society in which even the people who have the least have enough”
And the third thing would be the harmony with creation. We have become the exploiters of creation. A gardener takes care of his garden, he tries to make it sustainable and for it to thrive, but a gardener also wants it to be beautiful and for it to last. We are behaving like exploiters rather than gardeners. The way we use resources is to squeeze the most out of them in the shortest time possible. Maybe we could try to get the resources from nature in a manner more like that of a gardener. In this way, we would have a garden which would give us enough, and which would be beautiful and sustainable.
In general, do you think business is doing things in the right way? Might there be some companies that advocate sustainability as a marketing strategy rather than out of conviction?
Our system is economicist: this means that it puts the economy before anything else. And there are companies – not all of them – whose only and exclusive priority, is economic growth. Their objective is profit for shareholders. An example of this is the recent merger between Bankia and CaixaBank. The main reason for this deal is that the resulting company will be more profitable.
Many companies implement sustainable procedures only if they think that, by doing so, they will increase profit. It’s not based on any conviction. Sometimes, ecological, social and environmental issues are just used just to facilitate profitability.
The other kind of business philosophy is one that still seeks to achieve profitability, but which also has other priorities such as creating jobs for the local community, making products in an environmentally friendly way, etc. There are companies that take an economy of communion approach, an economic approach for the common good – they are examples of how change is possible.
“We can design the economy however we want”
Some people say that we are ruled by the economy and that we have to adapt to its laws, but this is not true in my opinion. We can design the economy however we want. And it can change. The structure we give it can make it good for some things and bad for the others. There’s no way to make it good for everything. Growth economics is very good for the creation of profit; there’s never been so much growth before. But it’s also bad for other things: for the distribution of wealth, for sustainability. The important thing is to know what we want the end state to be.
Do you think that governments are doing what they need to do to create a sustainable economy?
No. Governments are economicist, always putting economic growth first. We’ve made economic growth such a priority that the system is hooked on it. We produce and grow as never before – so much that it is now an addiction. We know that it’s not right to continue in this way, but the problem is that we also know that we’d have serious problems in the short term.
“We’ve made economic growth such a priority that the system is hooked on it”
Without growth, today’s society falls apart. It’s designed for growth and it only works when there is growth. The politicians know that if they stop growth, everything will collapse on them. In order to shift from a society that is addicted to growth to one that is not, we’d have to undergo a period of withdrawal. What politician is willing to be the one to press the button on hard times?
A sustainable economy: utopia or reality?
Are they really incompatible? Utopia can help us change reality, so we need it. My answer is that for a sustainable economy we need both: utopia and reality.
A sustainable economic approach is not an easy option – there’s a long road to travel. But nothing worthwhile in this life is ever easy.