Income Inequality and Sustainability: Healthy Societies and Healthy Ecosystems

By John BristowNo Comments

It is now become clear in the first two decades of the 21st century that further economic growth in the most developed economies does not improve health, happiness and wellbeing. The degree of income equality is as important as, if not sometimes more important to, the quality of life than growth, once a certain level of net national income is reached. More equal societies are safer, have better health, have fewer social problems, and, with better quality of social relationships, are nicer to live in. The savings in public expenditure that come from a healthier, safer society can be used to invest in health, education, culture and support for those in need, as well as research, and the transition to green technology and infrastructure. From this we can see ways of improving the quality of life without more economic growth, while choosing carefully where material growth is purposeful and environmentally sustainable within specified limits for a set time. This comes at a time when there are many factors disrupting our current economic system and capitalism as we know. But for a low growth economy to be acceptable there has to be a shift in societies to a high quality of life and human satisfaction coming more from being in a more sociable society than from simply from the goods and services that can be bought.

Achievements, creativity and innovation in all spheres of life can be the same in more equal societies, and perhaps even greater as those lower in status positions would be less likely to see themselves as inferior and so be more confident in fulfilling their potential in different ways. Having smaller income differences does not mean that people are any the less different in their potential and achievements.

As Donella Meadows and her colleagues pointed out in the studies of limits to growth, economic growth can also happen in a sustainable way. A society less obsessed with growth in itself would be “interested in qualitative development, not physical expansion. It would use material growth as a considered tool, not a perpetual mandate. Neither for nor against growth, it would begin to discriminate among kinds of growth and purposes for growth. It would ask what the growth is for, who would benefit, what it would cost, how long it would last, and whether the growth could be accommodated by the sources and sinks of the earth”. It would attend to fair distribution of wealth and to sufficiency and security for all. Rules, standard, laws, boundaries, social agreements and constraints would be there to protect freedom and the quality of life and not be rigidly controlling.

The WWF report Living Planet positions countries on their ecological footprint per person and the UN Human Development Index to measure the quality of life (based on life expectancy, education and Gross Domestic Product per person). This shows that a good quality of life can be achieved while living within the limits for sustaining all life on earth. Only a few countries are both above the threshold for high human development and also relatively low on ecological footprint – at, or near the limit of, the world’s biocapacity per person. Cuba and Costa Rica are examples where the quality of life is above the threshold and the eco footprint low – as GDP per person is only one factor. Costa Rica has around 97% of its electricity generated by renewable sources (hydro, solar etc) and scores high on wellbeing and happiness. Cuba has life expectancy and infant mortality rates as high as the USA and achieves a low eco footprint without access to the greenest technologies. Others above the threshold have a very high footprint (United Arab Emirates, USA, Finland, Canada, Kuwait, Australia, Sweden, UK, New Zealand for example). In countries with colder winters a low carbon economy and overall resource efficiency can take longer to achieve.

Global warming, and the risks of climate change and its effects such as reducing agricultural yields, food and water supply and increasing conflict over resources, require us to work together to prevent it and to adapt to it rather than for individuals, companies and countries to be finding ways around regulations for their own short-term gain, in a similar way to tax avoidance. Reducing inequality over time encourages more collaboration and reciprocity in societies. Societies that are more collaborative are more likely to collaborate with each other to keep within limits to address climate change and maintain the resilience of life on the planet in a sufficiently diverse variety of form. (See Australia’s Planet Ark Environmental Foundation Trust). More equal societies are more are more public-spirited and ready to collaborate with nature.

More equal societies – and societies wanting to address some of the inequities and costs of capitalism, having enjoyed the improved material standards of living it can bring – are also likely to have a more people participating in developing a more collaborative economy with collaborative forms of investment, ownership and control, production and consumption. This will help maintain income equality and lead to as much emphasis being put on benefits to local communities and their economies and on environmental sustainability as on the economic and financial health of the business. The economy is more likely to be more mixed in its forms of ownership and control than it is now, with capitalism, as we know it, likely to change too. A more diverse mix of forms of organization in a society’s economy means that it can evolve and adapt more easily to changes. Part 2 will address building the future, ways of organizing our economy, different forms of governance in organisations.

Greater income inequality heightens people’s sensitivity to, and anxieties about, social status as it becomes more important as an indicator of self-worth and is seen as a key aspect of identity. So conversely a more equal society is less prone to hyper-consumerism. People are less likely to buy products just to keep up with others – and maybe advertising will play less on this too. This extra consumption of course affects both carbon emissions and resource depletion. If more income and status equality means better health and social relationships does that mean we can maintain or improve our quality of life while consuming less? It certainly helps – but other factors come into play here too. What richer countries consider to be an acceptable material living standard is of course important – but material needs may be less prominent when social and self-esteem needs are also met through better social relationships and social networks. Changes and improvements in technology can also lead to greater efficiency in the use of energy and material resources, and near-zero waste of course. So what is saved at the beginning and end of the product life cycle reduces consumption in a broader sense too. Part 2 will look at the contribution of technology and the internet and the circular economy.

Policies to cut emissions and increase energy efficiency must be applied fairly, and this might be easier to do in more equal societies. Richer people and countries may cause 10 times the carbon emissions that are caused by consumption than poorer. Carbon rations have been considered with equal amounts of allowable emissions for a whole population. Those requiring less sell their unused rations at the end of a set period to a carbon bank for those who want and can afford to buy more. Research in this area has shown that personal carbon trading would be a progressive policy instrument – redistributing money from the rich to the poor – as the rich use more energy than the poor, and so would need to buy allowances from them. This is in contrast to a direct carbon tax, under which all lower income people are worse off, prior to revenue redistribution.

 

 

 

Carbon & Greenhouse Gases, Economics, Governance & Organising, Quality of Life, Resources and Pollution, Rich and Poor Gap
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