Don’t look up! has a surprising amount of things to tell us about the economy, much of which is helpful


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.

They hope the government will take action to avert disaster while the time comes. Their efforts are subverted by a combination of self-serving political cynicism, billionaire business interests, a media that sees their job as respecting those interests and cynicism, and a population conditioned not to look up.

It is an obvious metaphor for the threat of climate collapse, where the warnings and pleas of climatologists and scientists and a growing number of activists, ecological economists and others, are ignored, trivialized and sometimes even ridiculed. by political insiders.

But after 40 years marked by the dominance of pro-market neoliberal economic policies, the metaphor can be extended to almost any challenge requiring a serious response, especially when it comes to standing up to vested interests.

There is more evil than vision and courage. Public services no longer have the capacity they once had to respond to issues such as long-term climate change and short-term pandemics.

Their administrative and decision-making capacity has been removed, as has the surge capacity of health systems and, in many countries, the ability to respond to disruptions in supply chains – all in the name of efficiency, but with effect of creating fragility while contributing to inequality and extremism.

Hayek, Friedman and Buchanan brought us here

Neoliberalism has its roots in the work of three Chicago School economists: Friedrich Hayek, Milton Friedman and James Buchanan.

Hayek, although a famous name, was probably the least influential of the three. He saw mixed economies, based on the market 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Friedman espoused a naïve and outdated theory of money, which was no sooner adopted than abandoned in the early 1980s, but like Hayek saw freedom in low taxes and championed privatization and deregulation. It was Friedman who argued that many people needed to remain unemployed to suppress wages.

Buchanan, like Friedman, argued that politicians and public servants could be trusted to act in their own interests at the expense of society, and that almost anything that could be done by public servants could be done better by industry. private.

In the 1980s, the trio effectively took control of 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 all the Labor front benches that succeeded them. This influence persists to this day.

Mazzucato, Kelton and Raworth wanna get us out

In her book Mission Economy, 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 , climate change and the issues and opportunities associated with a rapid transition to sustainability.

This would require rebuilding public capacity and an approach to government experimentation and risk-taking unparalleled in 40 years.

Modern monetary theorist Stephanie Kelton and ecological economist Kate Raworth are aligned with her.

Stephanie Kelton, at the University of Adelaide in January 2020.
John Stains

Kelton’s deficit myth describes how modern monetary systems work and demolishes the metaphor of government as household used by neoliberals to push for balanced budgets and minimalist governments.

Kelton points out that it is normal for governments to run deficits (this is almost always the case with the Australian Commonwealth government) and that these deficits allow the private sector to avoid debt.

Governments that create their own currencies, such as that of the United States or Australia, are well placed to guide the private sector to serve a public purpose.

While Mazzucato and Kelton discuss what this means and give examples, it is Raworth’s book that most clearly identifies the goal to which governments should aspire.

This book is called Donut Economics. It sets out a framework to provide everyone with the opportunity to enjoy a secure, dignified, and connected life, while respecting nine planetary environmental boundaries that are prerequisites for sustaining the planet.

The framework requires a shift in focus from the goal of economic growth as defined by gross domestic product to a set of indicators of a prosperous society. The indicators are similar to the United Nations Sustainable Development Goals.

Kelton and Raworth are both members of the World Health Organization’s Council on the Economics of Health for All, chaired by Mazzucato. Its guiding principle is that health should be seen not only as a human right, but also as an investment in the pursuit of prosperity. It’s an approach that would have led to, among other things, better preparedness for the long-heralded pandemic.

Deficit-financed spending pays dividends

With Kelton and others, including eminent medical researcher Steve Robson and health economist Martin Hensher, I discussed the implications of modern monetary theory for health in an article for the Insight magazine of the Medical Journal of Australia and in a position paper for the Institute for Health Transformation at Deakin University.

As a nation, we should not have worried about the prospect of health spending climbing above 10% of gross domestic product as it did in 2015-2016, nor about the prospect of it climbing higher in the decades to come. We should invest in the resources, including skills, health infrastructure and technology that we will need to deal with future pandemics and the consequences of climate change.

Read more: ‘Don’t Look’: Hollywood’s Primer on Climate Denial Illustrates 5 Myths Fueling Science Rejection

When it comes to climate change, people are gradually realizing that the outcome of COP26 in Glasgow did not measure up to the challenge we face and that many countries will not even achieve what they engaged in Glasgow.

To a greater or lesser extent, every leader in a high-income country fails to articulate a mission when it comes to climate change, to drive that mission with the right public investments, and to situate climate change issues in the broader context of the planetary boundaries identified by Raworth – the most obvious of which is biodiversity.

The attitude is “Don’t look up!”, we have it. Or “technology will save us,” as President Orlean (Meryl Streep) believed in the film.

Few leaders better than Streep

Meryl Streep as President of Orleans.

Research by Raworth’s colleagues at the University of Leeds has found no country in the world that provides its citizens with the social foundations of a good life while remaining within planetary boundaries.

If that were to be the definition of a developed economy, none of our economies are developed.

Either we are not meeting the needs of our people, or we are exceeding the carrying capacity of our planet, or (in the case of about a third of countries) we are doing both at the same time.

This is both a warning and a challenge; a threat and an opportunity.

Our mission should be to meet the social foundations everywhere without destroying the environment of which we are a part and on which we depend.

We have the opportunity to govern differently

Governments, and in particular the sovereign monetary governments of high-income countries like Australia, will have to lead the way.

They will have to shed the neoliberalism of Friedman, Hayek and Buchanan, and the baggage that goes with it, and embrace the new economics of Kelton, Raworth, Mazzucato and their colleagues.

Then we can look up, with some confidence that we can deflect the metaphorical comets that threaten the lives of millions and the quality of life of us all.

The resources and technology to do what is needed already exist. But so far we have been trapped in an outdated way of thinking about both the role of government and the purpose of economic activity that has held us back to the point where the comet is heading our way.

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