2020 is around the corner and there’s no place to hide
Rod Oram takes stock of the decade that is finishing - and the one just starting, in which the stakes will be getting higher.
We’re better prepared for the next decade than we were for the one just ending. We have a stronger sense of identity and purpose, we’ve honed some skills, made our economy more sophisticated and lifted our ambitions. In many ways we’ve had a better decade than have many other countries.
But along the way we’ve intensified the strains on our ecosystem and economy, and on our society and politics. Moreover, our challenges in the 2020s will be more severe and more urgent. If we fall short, we will do much greater damage to ourselves. This we have in common with all of humankind. There is no place to hide.
We began the 2010s in the aftermath of the Global Financial Crisis. To cope, the Key government set a fiscally conservative, economically conventional strategy for the nation. Its mantras were less deficits and debt, and more people, fossil fuels, minerals, farming and offshore financial services.
Overall, it worked. A decade later the Government (now Labour-led) is running surpluses and is among the least indebted among developed nations. Our population has grown by 15 percent, our milk production by 30 percent, our overseas tourists by 37 percent and our economy by 25 percent – but no thanks to Key’s targeted sectors. They all fizzled except for farming. Meanwhile, our net greenhouse gas emissions rose 19 percent between 2010 and 2017, the latest data available.
In business, we’ve had some small companies such as Xero, RocketLab and a2 Milk winning in the new economy because of bold strategies and new business models; and some big companies losing in the old economy, notably Fletcher Building and Fonterra. Both have cost their shareholders more than $1 billion because of weak strategy, governance and execution.
... we must not let our relative progress make us complacent. We are citizens of a world crying out for radical reforms
But we’ve made some crucial factors worse, such as inequalities of income, health and education, household and farming debt, housing affordability, infrastructure and the natural environment.
As a society, we’ve coped well with great crises, particularly the Christchurch earthquakes and mosque massacre. But we’ve diminished our capacity for informed debate, effective policy making and social cohesion.
Across all aspects of our lives we are largely following global trends, although thankfully we’re lagging on the most damaging such as the social and political breakdown evident in the US and UK.
But we must not let our relative progress make us complacent. We are citizens of a world crying out for radical reforms. We can contribute values, ideas and energy to the tasks, and be the better for doing so.
Take the economic one. Some of the best recent analysis of this has come from Martin Wolf, the chief economics columnist of the Financial Times. In September he wrote about “why rigged capitalism is damaging liberal democracy.” This month, he wrote about how to reform it.
Accessing these articles will cost you just US$1, which is the FT’s current rate for a four-week trial of its journalism. (That in itself says something about the economically parlous state of my profession, but I’ll save that for a column next year.)
Wolf begins his remedy article:
“ ‘It is clear then that . . . those states in which the middle element is large, and stronger if possible than the other two [wealthy and poor] together, or at any rate stronger than either of them alone, have every chance of having a well-run constitution.’ Thus did Aristotle summarise his analysis of the Greek city states. The stability of what we would now call constitutional democracy depended on the size of its middle class. It is no accident that the US and UK, long-stable democracies today succumbing to demagogy, are the most unequal of the western high-income countries. Aristotle, we are learning, was right.”
A chart accompanying the article shows the five most unequal economies in the world (in terms of disposable income after taxes and cash transfers). They are, in order, the US, South Korea, the UK, New Zealand and Spain. Ours is the best functioning of those five democracies. But rising tensions will sorely test us in our general election next year.
While Wolf’s economic and political analysis is excellent, it doesn’t have much to say about humankind’s relationship with the planet. In other columns he has written rigorously about the urgent need to tackle the climate crisis. But he does not deeply integrate ecosystem and social responses into his proposals for economic and political reforms.
The best economist who does this is Kate Raworth. Her book Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist, is insightful, practical and highly readable. As she writes on her website:
“Humanity’s 21st century challenge is to meet the needs of all within the means of the planet. In other words, to ensure that no one falls short on life’s essentials (from food and housing to healthcare and political voice), while ensuring that collectively we do not overshoot our pressure on Earth’s life-supporting systems, on which we fundamentally depend – such as a stable climate, fertile soils, and a protective ozone layer.”
How businesses rise to these imperatives and opportunities is one of her particular interests. She gave some excellent examples in her talk at the Auckland Writers Festival this May.
But if the likes of bushfires in Australia, climate stalemates in Madrid, political chaos in Washington and homelessness in Auckland leave you feeling humankind is regressing, there are plenty of examples of progress to offer you hope. One of my favourites is the Seeds of a Good Anthropocene project established by the Stockholm Resilience Centre. Amid its rich examples from around the world, our predator free ambition is the only New Zealand one. Clearly we need to speak up about some of the other great things we’re doing.
For an update on bringing back the birds, New Zealand Geographic has just published this extensive article, replete with sumptuous photos.
The piece has encouraged me to see such wonders first hand over the summer holidays. As it happens, I’ll be out on my bike a lot anyway in wild and rural places as I train for and then ride in the Tour Aotearoa. Cheers, John, for the cycleways!
Such summer fun is one of the great bonuses of living in the Southern Hemisphere. So, I wish you all the best for your holidays…and a tanned, relaxed and eager start to the new decade.
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