Rio+20 and responsible capitalism: opportunities for Labour

We cannot rely on the market to create sustainable growth.

Next week, world leaders will meet in Rio de Janeiro to discuss how the global economy can tackle the joint challenges of global poverty reduction, social equity and environmental sustainability. The United Nations Conference on Sustainable Development marks the 20th anniversary of the 1992 Earth Summit: hence the popular short-hand, "Rio+20".

For environmentalists, Rio+20 is one of the most significant events to happen for a generation. But that's precisely the problem. As long as it remains the preoccupation of the green movement, Rio+20 will deliver only a fragile consensus that will ultimately fail.

The natural environment is fundamental to supporting and supplying the basis of economic value. Yet we do not consider the protection and enhancement of the natural environment is a strategic economic priority. Part of the reason for this is because our conventional model of economic growth values short-term return and wealth creation, rather than long-term productive wealth. While we may increase GDP in the short term, our conventional approach to economic growth can actually reduce a nation’s wealth.

Ed Miliband recognised these limitations in a speech to the Social Market Foundation last year where he told the audience that rules that encourage wealth creation focus on "short-term returns not the productive creation of long-term value". A major consequence is that resource consumption and the loss of ecosystems are treated as a benefit rather than a cost. And communities, co-operation and equality are undervalued in favour of creating conditions to maximise consumption.

An important challenge for Labour is now to translate Ed Miliband's vision for a "new economy" into a shared understanding of exactly what we want, and need, from the economy - and to be clear about the measures that will ensure that this can be achieved sustainably.

For many years there has been a lively debate about how the transition to a "green economy" will happen. However, no one has successfully managed to align the green economy with the everyday priorities of people, business and politics. Nor has anyone managed to set a pro-growth agenda that is also clear about the long-term productive value of a sustainable economy.

Most would agree that our expectations for the economy include job creation; competitiveness; the fair distribution of resources and wealth; fair and affordable access to food, water and energy; and enhanced biodiversity and ecosystem services. While these outcomes are complementary, much of the debate about our economic future has hitherto traded one aspect against another: green groups have one priority, business another, politicians another still.

Rio+20 provides a valuable political focus to continue work already underway on how Labour can address this. A question that the party might seek to answer is how we embed the three pillars of sustainable development - economic, social and environmental - into policy-making so that they become a natural by-product of the economy's total activities.

This would create huge economic opportunities for the UK - new green technologies, sustainable innovation, sustainability skills and sustainable investment products - all of which will also be instrumental in assisting emerging economies with the transition to a green economy.  

The Labour Party has a strong track record on the green economy. The world’s first Climate Change Act and the Climate Change Committee; the 2005 Sustainable Development Strategy with its recognition of the concept of environmental limits; the Sustainable Development Commission; the Commission on Environmental Markets and Economic Performance and the Low Carbon Industrial Strategy are all good examples of the Labour government's successes.

The party's approach in government was based on an understanding that policy and regulatory intervention is necessary to correct the market failure of un-priced environmental costs and benefits - thereby reconciling the free market economy with environmental sustainability. It understood that a strong and robust economic-environmental policy framework would also encourage finance and investment in low-carbon, resource-efficient business operations and supply chains.

Green conservatism of the sought advocated by David Cameron is flawed in this respect as it fails to reconcile the free market economy with environmental sustainability. It relies heavily on "environmental stewardship", which typically values the natural world only in terms of its contribution to human well-being. It leave the environment detached from and irrelevant to the wider economy.

As Chancellor, George Osborne has resurrected the age-old argument that we need to choose between economic growth and the environment - despite stating in 2009 that he had "always considered this to be a false divide" and that "economic growth and environmental sustainability can go hand in hand". He is the cheerleader for the outdated view amongst Tory MPs that the free market alone can satisfy the long-term needs of the economy.

For the reasons Miliband identified in his speech to the Social Market Foundation, an over-reliance on free markets - and their short-term priorities - is not a viable response to the challenges we face.

He has therefore been absolutely right to distinguish between "productive" and "predatory" capitalism. If it can underline the links between economic and environmental sustainability, Rio+20 will represent a valuable opportunity for the party to develop further examples of how it would tackle predatory capitalism.

It’s a chance to challenge the limitations of Tory economic orthodoxy. Most importantly, it’s a chance to start thinking about how the next Labour government can deliver long-term growth and sustainable wealth creation, while at the same time improving human well-being, creating jobs, ensuring fair and affordable access to resources such as water and energy, reducing inequalities, and tackling poverty.

Danny Stevens is an independent environmental policy and political consultant and a Labour councillor in Hackney.
 
Tristan Stubbs works on climate change and development policy at the Overseas Development Institute.

Terena indians dance around a Brazilian national flag during the opening of the Green Games as part of the UN Rio+20 environmental summit. Photograph: Getty Images.
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Chuka Umunna calls for "solidarity" among Labour MPs, whoever is voted leader

The full text of shadow business secretary Chuka Umunna's speech to Policy Network on election-winning ideas for Labour's future, and the weaknesses of the New Labour project.

There has never been an easy time to be a social democrat (or “democratic socialist” as we sometimes call ourselves in Britain). Whereas the right can demonise the poor and extol the virtues of the market, and the hard left can demonise the market and extol the role of the state, our position of constraining the domination of markets and reforming the state is, by definition, more complex.

It is nonetheless the case that social democracy has a historic responsibility, in every generation, to renew democracy and preserve a civic culture. This is achieved not through soundbites and slogans, but through the hard-headed development of a progressive politics that reconciles liberty and democracy, new comers and locals to our communities, business and workers, in a common life that preserves security, prosperity and peace.  This historic mission is all the more urgent now and my determination that we succeed has grown not weakened since our election defeat last May.

But, in order to be heard, it is necessary to make balanced and reasonable argument that both animates and inspires our movement, and which is popular and plausible with the people.  The first is pre-requisite to the second; and there is no choice to be made between your party’s fundamental principles and electability. They are mutually dependent - you cannot do one without the other.

We are in the midst of choosing a new leader and it is clear to anyone who has watched the UK Labour Party leadership election this summer that amongst a significant number there is a profound rage against Third Way politics – as pursued by the likes of Bill Clinton, Tony Blair, Gerhard Schröder and others - as a rejection of our fundamental values.

In the UK there is a view that New Labour accepted an uncritical accommodation with global capital that widened inequality, weakened organised labour and we were too close to the US Republicans and too far from the European left.

I do not believe this is fair, not least because we rescued many of our public services from the scrap heap when we came to office in 1997 and there were very significant achievements  we should celebrate.  New Labour renewed our National Health Service in a fundamental way; we built new schools and improved existing ones; we set up new children’s centres all over the country; we brought in a National Minimum Wage; we worked with others to bring peace to Northern Ireland; we introduced civil partnerships.  Just some of our achievements.

However, though we may take issue with the critique, I do not think we can simply dismiss out of hand those who hold critical views of New Labour. Like any government, the New Labour administration made mistakes - it could and should have achieved more, and done more to challenge the Right’s assumptions about the world. In the end, it is not unreasonable to be ambitious for what your party in government can achieve in building greater equality, liberty, democracy and sustainability. It is far better we acknowledge, not reject, this ambition for a better world, as we seek to forge a new politics of the common good fit for the future.

Realising our values in office has been disrupted by globalisation and the surge of technological forces that are displacing and reshaping industry after industry.

Some argue that globalisation as an ideological construct of the right. But we must recognise that we live in an increasingly integrated world in which markets have led to an unprecedented participation of excluded people in prosperity, a rise in living standards for hundreds of millions  of people and a literacy unprecedented in human history – this is particularly so in emerging economies like my father’s native Nigeria. And the internet has led to a level of accountability that has disturbed elites.

Yet, this has been combined with a concentration of ownership that needs to be challenged, of a subordination of politics that requires creative rather than reactive thinking, and these global forces have exacerbated inequalities as well as helped reduce poverty.

So it is important that we understand the sheer scale and impact of new technologies. At the moment we are engaged in a debate about Uber and its threat to one of the last vestiges of vocational labour markets left in London, those of the black taxi cabs and their attainment of 'The Knowledge'. But the reality is that within the next decade there will be the emergence of driverless cars so we have to intensify our exploration of how to support people in a knowledge economy and the realities of lifelong learning, as well as lifelong teaching. As people live longer we will have to think about how to engage them constructively in work and teaching in new ways.

Once again, I'm addressing all of this, Social Democracy requires a balanced view that domesticates the destructive energy of capital while recognising its creative energy, that recognises the need for new skills rather than simply the protection of old ones. A Social Democracy that recognises that internationalism requires co-operation between states and not a zero sum game that protectionism would encourage.

Above all, Social Democratic politics must recognise the importance of place, of the resources to be found in the local through which the pressures of globalisation can be mediated and shaped. Our job is to shape the future and neither to accept it as a passive fate nor to indulge the fantasy that we can dominate it but to work with the grain of change in order to renew our tradition, recognising the creativity of the workforce, the benefits of democracy and the importance of building a common life.  Sources of value are to be found in local traditions and institutions.

This also requires a recognition that though demonstration and protest are important,; but relationships and conversations are a far more effective way of building a movement for political change.

One of the huge weaknesses of New Labour was in its reliance on mobilisation from the centre rather than organising. It therefore allowed itself to be characterised as an elite project with wide popular support but it did not build a base for its support within the party across the country, and it did not develop leaders from the communities it represented. It was strong on policy but weak on strengthening democratic politics, particularly Labour politics.

Over half a million people are now members, supporters or affiliated supporters of our party, with hundreds of thousands joining in the last few weeks. Some have joined in order to thwart the pursuit of Labour values but many more have joined to further the pursuit of those values, including lots of young people. At a time when so many are walking away from centre left parties across the Western world and many young people do not vote let alone join a party, this is surely something to celebrate.

So it is vital that we now embrace our new joiners and harness the energy they can bring to renewing Labour’s connection with the people. First, we must help as many them as possible to become doorstep activists for our politics. Second, I have long argued UK Labour should campaign and organise not only to win elections but to affect tangible change through local community campaigns. We brought Arnie Graf, the Chicago community organiser who mentored President Obama in his early years, over from the U.S. to help teach us how to community organise more effectively. We should bring Arnie back over to finish the job and help empower our new joiners to be the change they want to see in every community – we need to build on the links they have with local groups and organisations.

I mentioned at the beginning that in every generation Social Democracy is besieged from left and right but the achievements of each generation are defined by the strength of a complex political tradition that strengthens solidarity through protecting democracy and liberty, a role for the state and the market and seeks to shape the future through an inclusive politics. Solidarity is key which is why we must accept the result of our contest when it comes and support our new leader in developing an agenda that can return Labour to office.

Yes, these are troubled times for social democrats. All over Europe there is a sense among our traditional voters that we are remote and do not share their concerns or represent their interests or values.  There is surge of support for populist right wing parties from Denmark to France, of more left wing parties in Greece and Spain and in Britain too. There is renewal of imperial politics in Russia, the murderous and abhorrent regime of ISIL in the Middle East, volatility in the Chinese economy and in Europe a flow of immigration that causes fear and anxiety.

But, the task of Social Democracy in our time is to fashion a politics of hope that can bring together divided populations around justice, peace and prosperity so that we can govern ourselves democratically. We have seen worse than this and weathered the storm. I am looking forward, with great optimism to be being part of a generation that renews our relevance and popularity in the years to come.

Chuka Umunna is the shadow business secretary and the Labour MP for Streatham.