A plea to politicians: ask the economists to tell the truth

A plea to politicians: ask the economists to tell the truth (qui la versione in ITALIANO)

TO
the President of the EU commission
the President of the EU Parliament
the Prime Ministers of the EU countries
the President of the USA
the President of Russian Federation
the Prime Ministers of the other OECD Countries

 

Economists, governments, and media focus on GDP to measure the economic consequences of the COVID-19 pandemic. Recovery policies largely aim at sustaining demand and supporting the existing production structure. At the same time, at least for 100 years, economic theory has shown that unregulated markets produce too much of some goods and not enough of others, as compared with what we would like to have. The reasons are the competitive society that normalises shifting of costs on to others to make profits (the so-called negative “externalities”).

As is well known by economists, there are many good reasons for criticizing the use of GDP beyond its technical economic domain. However, the present plea wants to remind economists and policy makers that, even from a standard and mainstream economics approach, looking at GDP can hide serious misallocations of jobs and other production factors. The same level of GDP can be associated with very different levels of well-being.

For example, automobiles cause road accidents, urban air pollution, and greenhouse gases but rather than addressing the root causes of these problems through alternative transport modes or new working arrangements, resources are targeted at  fixing problems afterwards. It would be cheaper to treat the causes of car accidents so they can be avoided, instead of allocating money to treat people involved in the accidents and to repair cars. The lock-down taught us that remote working is possible, implying less time and money spent on commuting, less car accidents, and lower pollution. This is one of the many examples that reveal we are living in a “broken window” economy where smashing windows makes economic sense because it leads to more window repairs. GDP nourishes itself from the misallocation of resources, social cost shifting, and resulting harm.

The potential for restructuring following the COVID-19 pandemic gives every country a unique opportunity to promote job reallocation from useless and harmful economic activities toward valuable ones. Each person can now envision many examples of how such restructuring can occur and each community has the chance of reflecting upon the transformation that suits it best. We can move to an economy that generates less waste and uses less toxics, employs more people in meaningful jobs promoting local sustainability, has shorter workweeks, is more resilient, and has more space for ethics, justice, and equity.

The general guiding principle for any economic policy, as emphasised by Ecological Economics and Industrial Ecology, should be to minimize the economy’s materials flows (including energy). Increasing the speed at which extracted materials become waste increases GDP but degrades our environment, negatively affecting our well-being and happiness, and forcing us to work much more than necessary to get the same level of services.

We ask governments and institutions to reorient our economies to move them away from a model based on producing goods that quickly become garbage.

We urgently need a less hazardous and low-carbon economy that efficiently and effectively sustains human needs and well-being. 

Economists should follow their own logic and ask for transforming the economy to improve wellbeing and make progress towards sustainability.

SIGNATORIES

  1. Tommaso Luzzati, Università di Pisa, Italy
  2. Simone D’Alessandro, Università di Pisa, Italy
  3. Tiziano Distefano, Università di Pisa, Italy
  4. Elisa Giuliani, Università di Pisa
  5. Nicholas Ashford, MIT Sloan School of Management, Cambridge MA, USA
  6. Federico Demaria, Federico Demaria, Universitat de Barcelona, Spain
  7. Joshua Farley, University of Vermont, USA
  8. Ralph P. Hall, Virginia Tech, USA
  9. Tim Jackson, University of Surrey and CUSP, UK
  10. Giorgos Kallis, Universitat Autònoma de Barcelona, Spain
  11. Peter May, Federal Rural University of Rio de Janeiro, Brazil
  12. Massimiliano Mazzanti, Università di Ferrara, Italy
  13. Dan O’Neill, University of Leeds, UK
  14. Begüm Özkaynak, Boğaziçi University, Turkey
  15. Amy Showalter, Virginia Tech, USA
  16. Clive Spash, WU Vienna University of Economics and Business, Austria
  17. Hannes Vetter, University Heidelberg, Germany
  18. François Briens, IIRCCESF, France
  19. Claudio Cattaneo, Masaryk University, Brno, Czech Republic
  20. Pablo Dominguez, CNRS, France
  21. Jordi Roca, Universitat de Barcelona, Spain
  22. Plumecocq Gael, INRAE, France
  23. Tiago Teixeira da Silva Siqueira, INRAE, France
  24. Junior Garcia, Federal University of Paraná, Brazil
  25. Adrián Saldarriaga Isaza, Universidad Nacional de Colombia – Sede Medellín, Colombia
  26. Lucas Ferreira Lima, University professor at FMU (Laureate International Universities), Brazil
  27. Bleys Brent, Ghent University, Belgium
  28. Gabriel Porcile, UFPR and ECLAC, Chile
  29. Katia Romero, Universidad Veracruzana, Mexico
  30. Ernest Aigner, WU Vienna University of Economics and Business, Austria
  31. Thais Diniz Oliveira, CIRED, France
  32. Juan David González Ruiz, Universidad Nacional de Colombia, Colombia
  33. Charlotte Guillard, University College London, United Kingdom
  34. Jose Carlos  Silva Macher, Pontificia Universidad Católica del Perú, Departamento de Economía , Perú
  35. Lukas Hardt, University of Leeds, United Kingdom
  36. Stef Kuypers, Happonomy, Belgium
  37. Markus Krecik, Freie Universität Berlin, Germany
  38. Sylvie FERRARI, University of Bordeaux, France
  39. Ana Casquete, Universidad de Burgos, Spain
  40. Joseph S. Weiss, ISEE, BRAZIL
  41. Ademar Romeiro, Institute of Economics – University of Campinas, Brasil
  42. Hartmann Hans J., La Rochelle University, France
  43. Peter Graham, Concordia University, Montreal, Canada
  44. Pedro Alarcon, FLACSO, Ecuador
  45. Robert Richardson, Michigan State University, United States
  46. Madhavi Venkatesan, Northeastern University, USA
  47. Jan Vávra, University of South Bohemia, Czechia
  48. Anitra Nelson, Melbourne Sustainable Society Institute, University of Melbourne, Australia
  49. David Robinson, Laurentian University, Sudbury Ontario, Canada
  50. Oliver Braunschweig, The New School, USA
  51. Judith McNeill, University of New England, Armidale, , Australia
  52. Giovanni Marin, Università di Urbino Carlo Bo, Italy
  53. Boyd Blackwell, ANU, Australia
  54. Kanchan Chopra, Formerly Institute of Economic Growth, University of Delhi, Delhi, India
  55. Mario Morroni, Università di Pisa, Italy
  56. Ingmar Schumacher, IPAG Business School , France
  57. Jim Crosthwaite Crosthwaite, Independent, Australia
  58. Roxana Juliá, New York University, United States
  59. Mladen Domazet, Institute for Political Ecology, Zagreb , Croatia
  60. Stefano Menegat, McGill University, Canada
  61. Lekha Mukhopadhyay, Jogamaya Devi College, Calcutta University, India
  62. Alpina Begossi, Fisheries and Food Institute, Brazil
  63. Oscar Gonzalo Manrique Diaz, Universidad Nacional de Colombia, Colombia
  64. Michele Filippo Fontefrancesco, UNISG, Italy
  65. Nick Martin, Universitat Autònoma de Barcelona, Spain
  66. Thomas Hahn, Stockholm University, Sweden
  67. Lino Sau, Università di Torino, Italy
  68. Paolo Coccorese, University of Salerno, Italy
  69. Christopher DeGeer,  University of Waterloo, Canada
  70. Davide Fiaschi, University of Pisa, Italy
  71. Matthew Evangelista, Cornell University, USA
  72. Neri Salvadori, University of Pisa, Italy
  73. Rachel, Graefin von Keyserlingk, Universität zu Köln, Germany
  74. Marta Marson, Università di Torino, Italy
  75. Jonas Van der Slycken, Ghent University, Belgium
  76. Domazet Mladen, IPE, Croatia
  77. Hofferberth Elena, University of Leeds, UK
  78. Ines Oman, Austrian Foundation for Development Research, Austria
  79. Pompeo Della Posta, University of Pisa, Italy
  80. Laurie Elizabeth Adkin, University of Alberta, Canada
  81. Alessio Moneta, Scuola Sant’anna Pisa,  Italy
  82. Michele Carducci, Università del Salento, Italy
  83. Mauro Gallegati, UNIVPM, Italy
  84. Patricia Ellie Perkins, Canada
  85. Barbara, Armani, Università di Pisa, Italy
  86. Nicola, Meccheri, University of Pisa, Italy
  87. Rodolfo Metulini, University of Salerno, Italy
  88. Elena Vallino, Politecnico di Torino, Italy
  89. Alida Sangrigoli, Politecnico di Torino, Italy
  90. Gianni Vaggi, University of Pavia, Italy
  91. Simone Borghesi, University of Siena and EUI, Italy
  92. Lorenzo Pellegrini, Erasmus University, The Netherlands
  93. Miklós Antal, Eötvös Loránd University, Hungary

17th September 2020