With a masterful awareness of the import of his actions, President Roosevelt termed his economic program to lift the US out of the Great Depression ‘the New Deal’. Laissez-faire capitalism, whereby the ‘invisible hand of the market’ ruled, had failed to fulfil the conditions of the social contract (a fair distribution of wealth between capital and workers). A new deal was needed to restore the living conditions of workers and, ultimately, to protect capital from revolution. The New Deal replaced hands-off government with active state capitalism – the Government increased participation in the economy by investing in new sectors and job-intensive infrastructure, created better unemployment benefits, and improved regulation of financial markets. It also increased the legal powers of organised labour to put unions on a more equal footing with capital. Corporatism – active, cooperative economic management by capital, labour, and the State -was introduced. New Zealand’s First Labour Government followed the Democrat’s lead with their own program of infrastructure investment, work rights, and improved social security.
Now, we face a crisis on a similar scale to the Great Depression. Neoliberal capitalism has failed. Not only have gamblers masquerading as financiers crippled the world’s credit markets but we are hitting up against the reality that the natural resources on which we build our economy are limited and in decline. The credit meltdown, peak oil, the food crunch, and climate change all look like very different things but the problem arises from the same failed model(s) of economy management. Luckily, we can solve all these problems with the same set of solutions.
The idea of a Green New Deal is gaining momentum in political circles around the world. The United Nations Environment Program has released a template for this Green New Deal, focused on getting us off unsustainable economic practices, creating jobs, and building natural capital. It highlights five areas that we need to make centre-pieces of our economies in the 21st century:
– Clean energy and clean technologies including recycling
– Rural energy, including renewables and sustainable biomass
– Sustainable agriculture, including organic agriculture
– Ecosystem Infrastructure
– Reduced Emissions from Deforestation and Forest Degradation (REDD)
– Sustainable cities including planning, transportation and green building
Add to that stronger workers’ rights and greater restrictions on the concentration of wealth and control of resources in a few private hands.
Luckily too, we have a leader for the times. Obama is the person with the power and vision to lead such a program, and the leadership and oratory to bring the world with him. If he fulfils his promise. We can look forward to the emergence of exciting and forward looking innovations in the coming years.
There’s no reason why the National/Act government can’t follow the same path but, unfortunately, ideology isn’t always subject to reason. With a money-man heading a government of climate change deniers, free-market radicals, and head-in-the-sand conservatives we are unlikely to see the change we need in New Zealand in the next three years.
So, the Left needs to start building its own Green New Deal plan with which to contest, and win, the 2011 election. We will be starting from behind other countries and we’ll need to hit the ground running. In the meantime, the Left parties can get elements of the program on the agenda with private members’ bills. Thought also needs to be given as to how the Left will win control of the councils in the 2010 elections – councils have a lot of control over infrastructure and urban planning, central aspect of the Green New Deal. Right now, the Left is too fractured at local level, the Left vote is split between too many disorganised candidates, allowing rightwing candidates to prevail with minority support.
The neoliberal system has failed. To protect our standards of living with we need to rebuild the foundations of the economy and ecology that underpin it. The Green New Deal is coming.