Gaian Economics: Who do we owe the national debt to?

The Green party economics spokesperson sheds some light on who the deficit is owed to. Mainly ourselves, it seems. Gaian Economics: Who do we owe the national debt to?

Green tax - the new VAT?

One of the main thrusts of Green economics is that the environmental cost of a product isn't included in its purchase price. That means that none of the 'incidental' environmental damage caused — such as the use of scarce resources, the pollution created during manufacture, transport and disposal of a product — is taken into account. The environment is treated as a free resource which manufacturers can exploit with impunity. Ultimately, the cost of cleaning up this mess is passed on to governments — and funded by the tax-payer, ie you and me.

One way of tackling this problem would be to impose a Green tax. Or, more exactly, to replace VAT with a Green tax. Instead of the current uniform 17.5% VAT, companies would be banded according to their environmental credentials. They would be required to fill in a detailed questionnaire about their activities — including the sustainability of raw materials, details of work practices, transport policy, etc — at the end of which they would be assessed and put in a tax band. The worse their environmental credentials, the more tax they would have to pay. Tax bands might range from 10% for the best performers to 25% for the worse offenders. Like VAT, it would be self-assessed with periodic spot checks. And, like VAT, there would be heavy fines for those caught cheating.

The beauty of this system is that it doesn't outlaw anything, it just provides a financial incentive for manufacturers to adopt sustainable practices. It also narrows the price gap between products that are produced cheaply and unsustainably (which would be taxed more) and those that are produced with more consideration for the environment (which would be taxed less). Which means that, for the first time, consumers would be paying a price which actually reflects some of the environmental cost of the product they are buying. 

What happened to the leisure dividend?

When I was growing up in the 1970s, there was much discussion about the 'leisure generation'. With machines rapidly replacing manual labour and productivity increasing all the time, commentators predicted that the next generation of humans would have less and less need to work. Instead, they would have time to pursue hobbies, sports, cultural activities and education. They would be the 'leisure generation'. Some worried about how humans would cope with having so much free time and imagined there would be major changes in society to cater for the new reality.
How differently it all turned out! Instead of using improvements in productivity (and therefore profitability) to reduce the length of the working week and improve workers' lives, companies simply tightened the screw even further. Products became cheaper, leading to a boom in consumer spending. As globalisation increased the competition for jobs, workers' rights were eroded. Meanwhile, the enormous profits created by global markets were handed out in dividends to share-holders and salaries and bonuses for company bosses. The workers who created these prtofits were rarely rewarded — and their working week remained just as long. In fact, most people now work longer hours than workers in equivalent jobs in the 1970s. So much for the leisure dividend!
The result isn't just an unfair distribution of profits — profits created by improvements in productivity from machines and workers — but a poorer, more regressive society. If the long-term goal of humanity is to create a more enlightened world, then trading culture for consumerism must be a backward step.
The solution? At the top of the list must be a campaign to reduce the length of the working week. We might also consider setting a scale which links workers wages with bosses' pay and dividends. If bosses award themselves huge bonuses, they would be legally obliged to increase workers' pay by the same proportion. That way, the benefits of improved productivity are passed on to everyone - not just those at the top. And if we do create a 'leisure generation' in the process, then so much the better for everyone!

By what authority?

When the Thatcher and Blair governments came to power, they did so after landslide election results which  gave them a mandate for radical social change. The current UK government, headed by a Conservative party which failed to achieve a majority, has no such mandate. Yet the changes they are enacting will have profound impact on the nature of our society for generations to come. Far from tinkering at the edges, they are meddling with the very fabric of society. Such arrogance might be expected from Cameron and his cronies, but the Lib Dems are doing their reputation irreparable harm by colluding in such antics. As someone who has sometimes voted for the Lib Dems as the best of a bad bunch, I for one will never vote for them again.