Restorative Economy

I have just finished reading Tearfund’s report: Restorative Economy; and am struck by its ambition, and practical sensible level-headed stance. Tearfund is a specifically Christian charity, but around the world are people of every belief system who share Tearfund’s commitment to the view that a different, more humane, more effective way is what we urgently need – and who have bold ideas about what that way may be. We all need to work together; and as we do, our heart and soul, our various beliefs about right and wrong are essential. This report outlines a Biblical motivation for addressing poverty and justice globally; it is Tearfund’s inspiration, and mine, and I am interested to know how this report sits with others who are seeking the same goals.
The full report is 50 pages. Here I have given a lite summary. But if you want to skip to the most exciting bit it’s at the end: a list of 10 big policy ideas.

Rather brilliantly Tearfund begins the report with a quote from Charles Dickens – a Tale of Two Cities: “It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way…”
Between 1988 and 2008, the proportion of humanity living in extreme poverty was halved. More than 100 million fewer people go hungry now than at the turn of the millennium. Since 1990 the total number of children under five who die each day has halved and the number of mothers dying in childbirth in East Asia, North Africa and Southern Asia has declined by two thirds. The proportion of children around the world who make it to primary school now exceeds 90% – and disparities between boys and girls are narrowing all the time. The political participation of women and marginalised groups is also increasing, ensuring that their voices are heard and their interests reflected in government policies.
Improvement is not the same as problem-solved. 1.2 billion people still live on less than $1.25 a day. 1.6 billion people are poor on multi-functional measures which include things like education and neutrition. For the most part, these people are either geographically or politically marginalised and, by 2030, they will be heavily concentrated in the world’s war zones and ungoverned spaces, and at severe risk of violence or displacement. At the same time, as more and more formerly-poor people become able to adopt the high resource-consuming lifestyles as those of us in the West, so the strain placed on finite resources increases massively. By 2025, up to two thirds of the world’s people will be living with ‘water-stress’. Some of the world’s great rivers – including the Colorado, the Yellow River, the Indus – now often run dry before they reach the sea, while the Aral Sea, once one of the four largest lakes in the world, has ceased to exist. Vulnerable indigenous communities face ruin as multinationals carry out land-grabs for bio-fuels, timber or other purposes. Right now, the world is on track for a 3.6°C to 5.3°C long-term temperature rise, though 1.5º we are told, is the safe limit. The world’s poor are by far the most exposed to extreme weather, to food price spikes, to agricultural land grabs, and to the ‘consequences of consequences’ that come with these changes, such as armed conflict.

We Need a Bigger ‘Us’
Who can take charge? Nation state governments and even bodies like the United Nations are not all that well placed to address today’s concerns. Issues are complex and straddle different ministers’ and departments but are dealt with as if the opposite were the case. Issues are divided up into finance, development, environment and so on, and left to the ‘relevant’ tribe of ministries and international agencies, populated by single issue ‘experts’ rather than people who can join the dots. The toughest issues increasingly get escalated upwards – to heads of government at home and to bodies such as the G7 or G20 internationally – where there is too little capacity to do much more than react. Governments thus often manage symptoms rather than tackling root causes: cleaning up after floods rather than getting serious about reducing emissions, bailing out banks rather than putting in place a new approach to financial regulation. Strong governance, by international bodies, with contribution by nation states, is essential; but it’s hard to make it stick. To make matters worse it is hard to reach wisdom, either in public debate or policy, with so many well funded, vehement vested interests. By one estimate, billionaires in the US channelled almost $120 million to groups casting doubt on the science of climate change between 2002 and 2010. One thing this points to, is that nowadays public opinion – your opinion – really matters.
Tearfund believes one of its basic functions is to develop alternatives to existing policies, and to keep them alive and available until the politically impossible becomes the politically inevitable.’ Think in terms of 7 billion ‘us’ – recognising that we are more interdependent than we have ever been, that the consequences of our individual actions and lifestyles can ripple across the world as never before,, for good or evil. And think in terms of a longer future.
Our political leaders rarely have the luxury of thinking beyond the next election; our business leaders, the next financial quarter; our journalists, the next 24-hour news cycle. But we, the rest of us, the so-called ordinary people, in every country in the world, have the privilege, the duty, of thinking in a long term way – one that encompasses human need. Our children and grandchildren in Britain face a far more uncertain future than their parents, with unaffordable housing, costly higher education and student debt, and the end of ‘jobs for life’. Globally, meanwhile, the next generation faces a future of increasing climate change and resource scarcity. I don’t think these are two separate spheres. If the world’s poorest suffer disproportionately as inequality increases, this will not yield a safe affordable future for our grandchildren.
A 2010 report from Tearfund, CAFOD and Theos, argues, ‘Human creativity and productivity, our relationships and responsibility, our participation and contribution to society, our environmental stewardship, and, crucially, our generosity are all fundamental to flourishing as human beings.’ So Tearfund’s approach to movement building is based on a conversation: between different kinds of Christians, between Christians and people of other religions, between those of faith and those of none. All of us have something to bring, and this kind of conversation isn’t designed to lead to us all having a shared faith. Inequality and climate change are the threats to our common future. If we’re to avert a tragedy, we urgently need some common values and reference points. And I think the ideas in this tract can make a unique contribution to that conversation.

God, Relationships, Peace and Jubilee
One of the oldest and deepest ideas in the Bible is God’s intention for right relationships. The creation account situates human beings in three distinct but interrelated relationships: with God, each other and the environment. In the bible the Hebrew word usually translated ‘peace’ is ‘Shalom’ – but it means much more than merely an absence of violence: instead, it incorporates ideas of wholeness, completeness, balance, well-being, tranquillity, prosperity, security and justice: again it is an idea full of right relationships. It does not allow for an exploitative attitude towards each other or nature.
The Bible describes a system called jubilee (in Deuteronomy 15 and Leviticus 25). Every 7 years debts are cancelled and the land has a fallow year; every 49th year all slaves are freed and land, if its been sold, is returned to its original owner. If anyone becomes poor “you must not sell them food at a profit or lend them money at interest. Farmers were to leave some of the harvest aside for the poor. The timing of jubilee years every half-century prevented wealth inequality from building up over generations. Land ownership was reset to its initial, per capita distribution: for as business leader and Christian author Kim Tan explains, ‘When the nation of Israel entered the Promised Land, the country was divided up in an equitable manner.The territories were divided up in proportion to the size of the tribes.’ This provided equality of opportunity. Kim Tan again: the idea of a jubilee was that ‘every fifty years each family [would have] an opportunity to start afresh – free of debt and in possession of their own land’. Jubilee was also a kind of fallow season for all nature, and a recognition that we have enough, really, and can be gentle to our world.
The Jubilee 2000 Campaign was based on these principles and achieved extraordinary results: low income countries’ debts fell from nearly 75% of their national income to 25%.
Jubilee looks like the political and economic expression of God’s idea of peace and right relationships.
At the very beginning of his work, Jesus read from the prophet Isaiah:‘The Spirit of the Sovereign LORD is on me, because the LORD has anointed me to proclaim good news to the poor. He has sent me to bind up the broken-hearted, to proclaim freedom for the captives and release from darkness for the prisoners, to proclaim the year of the LORD’S favour’ (Luke 4:18-19). Jesus’ death and resurrection begin the ultimate jubilee in which all things can be released and restored. He calls us to a radically different way of living, taking the Old Testament teaching to a whole new level: ‘You have heard that it was said, “Love your neighbour and hate your enemy.’’” but I tell you, love your enemies’ (Matthew 5:43-44). As Margaret Barker puts it, the Bible has a ‘beautiful and sophisticated account of the creation and the role of human beings within it. It is, in a very real way, a theory of everything: politics, economics, social cohesion, justice, the integrity and the security of the creation.

Tearfund’s Vision: Restorative Economy

Broadly, a restorative economy will depend on restorative living – with all of society engaged in repairing nature, using opportunities to be producers rather than just passive consumers, building resilient communities that are creative and fun to be part of, and restoring bonds of fellowship and friendship. First, it would ensure we live within environmental limits. Second, it would ensure that everyone was able to meet their basic needs. Third, it would keep inequality within reasonable limits
Environmental Limits
In practice, I think (based on what Tearfund says) we have to shift to a ‘zero-carbon’ economy, with global emissions peaking well before 2020 and developed country emissions falling to zero before 2050; we need to shift to a circular, rather than linear, materials economy, in which everything gets reused or recycled and nothing goes to waste, exactly as happens in nature; and we need a new Green Revolution in the way we grow our food, making agriculture twice as productive but half as resource intensive.
Basic Needs
While the income needed to meet basic needs such as food, healthcare, education, energy, clean water and housing clearly varies from one country to another, the bottom line is that every person on earth should have enough for a life with dignity.
Trade on the international and internal markets is crucial to meeting these needs, much more-so than aid,, if you think purely in terms of the amount of cash transferring. . So governments need to put in place the right enabling environment: no one above the law, contracts enforced, impartial courts, customs systems that work, educated workforces, dependable infrastructure, from roads to internet connection, and so on. Influencing and enabling these kinds of institutional changes around the world is in large part the role of aid. Tearfund also advocates policies to address market failures and for public funding to plug the gaps. Successful countries have done exactly this: using policy to design markets intelligently, fund basic services and provide a social safety net available to all.
Limit Inequality
Just because the world’s poorest and richest families may live on opposite sides of the world doesn’t mean that the gulf between their life chances matters any less. A growing number of countries have shown that sustained action to tackle inequality can go hand in hand with strong economic performance, from developed countries such as Denmark or Norway to emerging economies such as Brazil which has recognised the challenge of high inequality and started to take serious steps to tackle it. In practice, we think a good benchmark for the UK to aim for would be the kind of low inequality levels that we see in countries such as Denmark (which has a Gini score of 24 per cent, on a scale where 0 per cent is perfect equality and 100 per cent is absolute inequality), Sweden (25 per cent) or Norway (26 per cent) – as compared to 34 per cent in Britain, 42 per cent in China, 48 per cent in the United States or 63 per cent in South Africa. Inequality is poisonous to society: increasing crime, reducing educational attainments and life expectancy (‘the Spirit Level: Why More Equal Societies Almost Always Do Better’ by Wilkinson, R. and Pickett, K. Published by Allen Lane, London in 2009). Inequality creates an ‘us and them’ culture, breeding resentment, envy in which even the super-rich are worse off than in equitable societies. Inequality makes it less likely we can reduce climate change or poverty.
Making Change
Politicians often assume, on the basis of polls, focus groups and so on, that most of us vote on the grounds of narrow economic self-interest. But if a sufficient critical mass of people are vocal and visible in demonstrating that this isn’t the case, and that there is real demand for a restorative economy that lives within environmental limits, allows everyone to meet their basic needs and keeps inequality within limits, then change will follow.
At the same time, there’s much that we can achieve through the power we exert when we make decisions about what to buy and how to invest. Many companies are increasingly focused on reputational issues. Given their own power as purchasers, they themselves are increasingly able to drive change throughout supply chains – if they perceive that there is strong demand for it from their consumers. So buying ethically does matter-from Fairtrade-approved items such as coffee or chocolate, to environmentally certified goods such as Marine Stewardship Council-approved fish or Forest Stewardship Council-accredited wood and timber.
Socially responsible investment, meanwhile, is also becoming increasingly significant. In the United States, for example, total assets in ‘socially screened’ portfolios were worth $5.67 trillion at the start of 2014 – a 76 per cent increase since 2012. One in six dollars under professional management in the US is now involved in socially responsible investing. You may be able to help build on this with a push on pension fund managers to pull out of fossil fuel investments. Start by writing to your pension fund manager and asking how much of your pension is invested in coal, oil and other fossil fuels, and how much is invested in renewables, as this information is not always publicly available.
We can all do our part restoring the broken relationships we see around us. In his book, Walking with the poor, experienced development practitioner Bryant Myers talks about the deepest form of poverty being not lack of money, but a distorted sense of identity – about how people living in poverty come to see themselves. This often results from the daily grind of material poverty, but is not solved through giving money. It requires relationship. This form of poverty is not limited to poor countries: it is also found right on our doorsteps. But the reality is that many of our day-to-day interactions with those who need help do more to reinforce broken identities than restore them. Instead, we all need to watch how we interact with our fellow humans: beware pity and condescension. Treat all people with respect and dignity.
Tearfund (and I) would also like to set out ten big, transformative policy ideas of the kind that we think could help to bring about a restorative economy in line with jubilee principles. While we recognise that shifting to a restorative economy has to be a worldwide undertaking, our main focus here is on what we can do in the UK – whether in how we organise our own economy, or in how we address our global impacts (for both good and ill), or in ways that the UK can lead internationally. The following help to meet an unmet demand for big ideas, and we think all of them are worthy of careful consideration.
10 Big Policy Ideas
1 Create a circular economy – through powerful incentives for resource efficiency and ensuring that nothing goes to landfill and that instead everything is reused over and over again, in keeping with God’s design principles in nature.
2 Double food production and halve resource intensity with a 21st-century Green Revolution – above all in Africa, where crop yields are far lower than the rest of the world – by making the sustainable increase of agricultural productivity a top priority in Britain’s international aid programme.
3 Accelerate the shift to a ‘zero-carbon’ economy – in particular by banning coal-fired power generation by the early 2020s, ending fossil fuel subsidies including the reduced rate of VAT for electricity and gas, and introducing mandatory carbon stress-testing for pension funds and institutional investors.
4 Agree a carbon jubilee by defining a safe global emissions budget that keeps the world to 1.5°C of warming. This budget should be shared between countries in proportion to their populations, on a per capita basis – recognising that the sky belongs to everybody, and all our descendants (or it belongs to God, whichever way you want to look at it). This would create a major new source of development finance – from trade, not aid.
5 Allow poor people everywhere to meet their basic needs by introducing a global social protection floor, including healthcare, education, nutrition and basic income security. In the case of the poorest or most fragile countries, the funding for this will need to be raised internationally.
6 Make the UK a world leader in ensuring markets work for poor people around the world. While retaining the UK’s commitment to spending 0.7 per cent of national income on aid, buttress this with a stronger focus on helping developing countries create environments in which the private sector can flourish.
7 Go much further in tackling international tax avoidance – increasing developing countries’ capacity to finance their own development from their own tax revenue, and doing much more to help them recover stolen assets from abroad.
8 Adopt a jubilee stance on inequality, by implementing measures that give modern-day expression to the principles behind the jubilee reset of land ownership. For example, this could be through stronger and fairer taxation of property (via a land value tax) and of wealth transfers (via replacing traditional inheritance tax with a wealth receipts tax).
9 Ensure that the financial sector contributes to shared prosperity – and doesn’t jeopardise it. In particular, we need to reduce the capacity for unsustainable levels of debt (or leverage) to build up, for example by radically raising reserve requirements for banks, or creating a new maximum leverage target for the financial system as a whole.
10 Rebalance the tax system in line with jubilee principles, by shifting more of the burden of taxation onto activities we want to discourage (such as carbon emissions, pollution, waste or the excessive concentration of wealth), and away from those activities we want to encourage (such as work).

Full report available here

Aid and Humanitarianism: a Critique

Click on the above link to open or download the essay. I wrote this as part of the course I’m on, and I think it might be of general interest. International aid and humanitarian interventions: maybe they reinforce inequality rather than reducing it. If so what?
This is the ‘deluxe’ version of the essay. 🙂 There were a few interesting passages I had to remove, to get it under the word-count limit for university essays, but I’ve put them back in for this version. Enjoy! And I’d be really interested in anyone’s comments.

Can Big Business Eradicate Extreme Poverty

Who can deliver the Eradication of Extreme Poverty? Amongst the main players will be:

    Governments, including the G20
    the United Nations
    Big Business

But how will money-grabbing, blood-sucking, exploitative, evil fat-cat bully-bossing cigar-puffing big business be persuaded to help eradicate extreme poverty? Here are some ideas.

    Civil Society Pressure. Here is a paper by a group called Trade Justice Scotland – with some genuine influence and a lot of right ideas about how companies should set their priorities. Principles of Just Trade Deals
    Flagship Sustainability Programmes. Astrazeneca (where I used to work) had a lot of social responsibility programmes including supporting charities and promoting healthy lifestyles for young people etc.  Then they decided to consolidate into a single “Flagship Sustainability Programme”: Healthy Heart Africa.  At the same time Kellogg’s decided to consolidate their sustainability programmes into something called “Breakfasts for Better Days” and give away a billion breakfasts, mostly in the developing world.  “Flagship Sustainability” it seems is the order of the day.  Flagship programmes might form a meaningful part of the G20’s Sustainability Development Goals (SDG’s) which in theory are supposed to eradicate extreme poverty by 2030.  The United Nations Global Compact is the mechanism for marshalling big business into helping with the delivery of the SDG’s. See this link: UN Global Compact
    And finally: Indoces. My favourite is the Access to Medicines Index run at very little expense by the Access to Medicines Foundation. They publish indices of how well the pharmaceutical companies do at developing medicines which are relevant in the developing world, and making them available to the poor. As soon as the AMI existed Astrazeneca wanted to be on it, despite being quite low in the rankings at first; and having joined the index Astrazeneca is extremely keen to improve their ranking (as, presumably are the other pharmaceutical giants). This could be how medicines and health-care come available to the poorest people in the developing world. See Access to Medicines Foundation