The Plague Economy: Inequality and the Preoccupation with Growth

The COVID-19 pandemic has exposed fault lines that highlight weaknesses in our economic system. Unfettered capitalism imperils biodiversity and endangers the future of civilization. Julia Steinberger echoes these sentiments saying that confronting capitalism is the only way we can “avoid disaster”. We will not be able to protect the natural world or combat global warming without changes in corporate governance and more specifically the fiduciary obligation to deliver profits.

Even more fundamentally we need to challenge the business ethos that seeks profit at the expense of everything else. Our metrics must reflect the costs and the risks associated with environmental degradation and climate change.

The fact that Wall Street has become so fundamentally disconnected from Main Street is a symptom of a broken economy. As reported in a BBC article by Luke Kemp, as wealth inequality worsens the 1% have increased their share of global income from approximately 16% in 1980 to over 20% today. The share of global wealth from 1% has swelled from 25-30% in the 1980s to approximately 40% in 2016.

A recent Bloomberg article cites research that indicates that we can expect to see the greater disparity between rich and poor as the world warms. Climate change is expected to cause a 20 percent drop in GDP in the coming decades and this will exacerbate wealth inequality. According to a 2014 NASA study, such concentrations of wealth have historically contributed to the collapse of civilizations.

This pandemic offers us an opportunity to rethink the economic principles that underpin our society. The coronavirus has already changed the way we work, returning to the broken approaches that got us here is suicide. If we are to have a future we need to see a structural reorganization. We need a sustainable economy that inculcates the limitations imposed by the Earth’s carrying
capacity.

Although growth is the bedrock of capitalism, it is becoming increasingly apparent that this is both unsustainable and dysfunctional. We cannot survive a return to the old model of neoliberal growth. The only way that growth is tenable in the long term is if it is decoupled from both greenhouse gas (GHG) emissions and terrestrial resource extraction.

The growth that contributes to planetary health and social well-being should be encouraged but all other forms of growth must be closely monitored and regulated to ensure that they do not contribute to ecological destruction or social inequity. It is short-sighted insanity to prioritize short-term economic gains. As the old cliche goes, there is no economy on a dead planet.

Steinberger says that we can change, but, she adds, “it will take the fight of our lives, for all of our lives, to change this…This is a fight for life itself.” We know what we have to do, now we just have to do it. It’s now or never, we can either listen to science and confront the climate crises on multiple fronts or we can surrender and move perilously into an uncertain future.