“The progressive “way” out of this dystopian chaos is with a green, caring and just transition that requires a paradigm shift to a needs-based approach to policy.”
This article is a published version of the speech given by Professor Özlem Onaran, University of Greenwich at the Arise Festival 2023 session ‘Socialist economic policies explained – The alternative to never-ending cuts.’
You can view Özlem’s accompanying slides here.
We are at a crossroad of intersecting multiple crises with environmental breakdown, care crisis in an aging society, inequalities with respect to class, race and gender, technological change with a new nature of AI, Russia’s invasion of Ukraine and cost of living crisis.
“The progressive “way” out of this dystopian chaos is with a green, caring and just transition that requires a paradigm shift to a needs-based approach to policy.”
We need ask questions such as “how much investment in the green economy is needed for transition to net zero carbon economy? How many care workers are needed to meet the demographic needs with decent pay for workers?”, just to name a few. We need to use all tools and all means of funding, and coordinate fiscal, monetary, industrial, labour and social policies. We need long-run thinking. Starting with the short-run emergency measures we need to medium-run planning.
In the short-run we need:
- Price controls to deal with short-run shocks, supply bottlenecks and profiteering-led cost of living crisis, in particular in energy, rent and essential food items.
- Regulations and windfall tax targeting the increase in the mark-up rates.
- To ban speculation in commodity markets.
- Link household debt payments to income and a permanent ban of disconnections/compulsory pre-paid meters and evictions.
- Reverse the squeeze in wages and low incomes with an increase in public sector pay, minimum wage, strengthen the trade unions and reactivate fiscal support for short time work where needed.
In the medium run we need urgent and large scale public investment in:
- the green economy (renewable energy, energy efficiency, public transport, organic agriculture, forestry; circular economy).
- Purple care infrastructure (education, childcare, healthcare, social care).
- Other infrastructure, e.g. green social housing, hospitals, schools, nurseries, care homes.
This programme needs to be embedded in a democratic participatory plan at least covering the key sectors with publicly owned enterprises (central, local, cooperatives).
How can we fund this programme? It is partly self-financing thanks to high multiplier effects. But we need to use all tools including:
- Progressive taxation of not just income but also wealth.
- Borrowing with a redefinition of infrastructure rather than narrow fiscal rules.
- National investment bank (networked with public banks, cooperative banks)
- Accommodating monetary policy, targeting full employment and inflation, with a higher weight on employment and an inflation target consistent with full employment, eg 4-5% rather than 2%, BoE buying government bonds to accommodate an expansionary fiscal policy.
- Professor Özlem Onaran, University of Greenwich was speaking at the Arise Festival 2023 session ‘Socialist economic policies explained – The alternative to never-ending cuts‘ held on June 21st, 2023. You can watch or listen back to the session here.
- Özlem Onaran is a Professor of Economics at the Centre of Political Economy, Governance, Finance and Accountability (PEGFA) at the University of Greenwich. You can follow the PEGFA on Twitter here.
