From ‘Yel­low Vests’ to the Green New Deal

Shanghai Daily - - FRONT PAGE - Joseph E. Stiglitz

IT’S old news that large seg­ments of so­ci­ety have be­come deeply un­happy with what they see as “the es­tab­lish­ment,” es­pe­cially the po­lit­i­cal class. The “Yel­low Vest” protests in France, trig­gered by Pres­i­dent Em­manuel Macron’s move to hike fuel taxes in the name of com­bat­ing cli­mate change, are but the lat­est ex­am­ple of the scale of this alien­ation.

There are good rea­sons for to­day’s dis­gruntle­ment: Four decades of prom­ises by po­lit­i­cal lead­ers of both the cen­ter left and cen­ter right, es­pous­ing the ne­olib­eral faith that glob­al­iza­tion, fi­nan­cial­iza­tion, dereg­u­la­tion, pri­va­ti­za­tion, and a host of re­lated re­forms would bring un­prece­dented pros­per­ity, have gone un­ful­filled. While a tiny elite seems to have done very well, large swaths of the pop­u­la­tion have fallen out of the mid­dle class and plunged into a new world of vul­ner­a­bil­ity and in­se­cu­rity. Even lead­ers in coun­tries with low but in­creas­ing in­equal­ity have felt their pub­lic’s wrath.

By the num­bers, France looks bet­ter than most, but it is per­cep­tions, not num­bers, that mat­ter; even in France, which avoided some of the ex­trem­ism of the Rea­gan-Thatcher era, things are not go­ing well for many. When taxes on the very wealthy are low­ered, but raised for or­di­nary cit­i­zens to meet bud­getary de­mands (whether from far-off Brus­sels or from well-off fi­nanciers), it should come as no sur­prise that some are an­gry. The Yel­low Vests’ re­frain speaks to their con­cerns: “The gov­ern­ment talks about the end of the world. We are wor­ried about the end of the month.”

There is, in short, a gross mis­trust in gov­ern­ments and politi­cians, which means that ask­ing for sac­ri­fices to­day in ex­change for the prom­ise of a bet­ter life to­mor­row won’t pass muster. And this is es­pe­cially true of “trickle down” poli­cies: tax cuts for the rich that even­tu­ally are sup­posed to ben­e­fit ev­ery­one else.

When I was at the World Bank, the first les­son in pol­icy re­form was that se­quenc­ing and pac­ing mat­ter. The prom­ise of the Green New Deal that is now be­ing cham­pi­oned by pro­gres­sives in the United States gets both of these el­e­ments right.

The Green New Deal is premised on three ob­ser­va­tions: First, there are unuti­lized and un­der­uti­lized re­sources — es­pe­cially hu­man tal­ent — that can be used ef­fec­tively. Sec­ond, if there were more de­mand for those with low and medium skills, their wages and stan­dards of liv­ing would rise. Third, a good en­vi­ron­ment is an es­sen­tial part of hu­man well­be­ing, to­day and in the fu­ture.

If the chal­lenges of cli­mate change are not met to­day, huge bur­dens will be im­posed on the next gen­er­a­tion. It is just wrong for this gen­er­a­tion to pass these costs on to the next. It is bet­ter to pass on fi­nan­cial debts, which we can some­how man­age, than to con­front our chil­dren with a pos­si­bly un­man­age­able en­vi­ron­men­tal dis­as­ter.

Al­most 90 years ago, US Pres­i­dent Franklin D. Roo­sevelt re­sponded to the Great De­pres­sion with his New Deal, a bold pack­age of re­forms that touched al­most ev­ery as­pect of the Amer­i­can econ­omy. But it is more than the sym­bol­ism of the New Deal that is be­ing in­voked now. It is its an­i­mat­ing pur­pose: putting peo­ple back to work, in the way that FDR did for the US, with its crush­ing un­em­ploy­ment of the time. Back then, that meant in­vest­ments in ru­ral elec­tri­fi­ca­tion, roads, and dams.

Cre­at­ing good jobs

Econ­o­mists have de­bated how ef­fec­tive the New Deal was — its spend­ing was prob­a­bly too low and not sus­tained enough to gen­er­ate the kind of re­cov­ery the econ­omy needed. None­the­less, it left a sus­tained legacy by trans­form­ing the coun­try at a cru­cial time.

So, too, for a Green New Deal: It can pro­vide pub­lic trans­porta­tion, link­ing peo­ple with jobs, and retro­fit the econ­omy to meet the chal­lenge of cli­mate change. At the same time, these in­vest­ments them­selves will cre­ate jobs.

It has long been rec­og­nized that de­car­boniza­tion, if done cor­rectly, would be a great job cre­ator, as the econ­omy pre­pares it­self for a world with re­new­able en­ergy. Of course, some jobs — for ex­am­ple, those of the 53,000 coal min­ers in the US — will be lost, and pro­grams are needed to re­train such work­ers for other jobs. But to re­turn to the re­frain: se­quenc­ing and pac­ing mat­ter. It would have made more sense to be­gin with cre­at­ing new jobs be­fore the old jobs were de­stroyed, to en­sure that the prof­its of the oil and coal com­pa­nies were taxed, and the hid­den sub­si­dies they re­ceive elim­i­nated, be­fore ask­ing driv­ers who are barely get­ting by to pony up more.

The Green New Deal sends a pos­i­tive mes­sage of what gov­ern­ment can do, for this gen­er­a­tion of cit­i­zens and the next. It can de­liver to­day what those who are suf­fer­ing to­day need most — good jobs. And it can de­liver the pro­tec­tions from cli­mate change that are needed for the fu­ture.

The Green New Deal will have to be broad­ened, and this is es­pe­cially true in those coun­tries like the US, where many or­di­nary cit­i­zens lack ac­cess to good ed­u­ca­tion, ad­e­quate health care, or de­cent hous­ing.

The grass­roots move­ment be­hind the Green New Deal of­fers a ray of hope to the badly bat­tered es­tab­lish­ment: They should em­brace it, flesh it out, and make it part of the pro­gres­sive agenda. We need some­thing pos­i­tive to save us from the ugly wave of pop­ulism, na­tivism, and proto-fas­cism that is sweep­ing the world.

Joseph E. Stiglitz is the win­ner of the 2001 No­bel Me­mo­rial Prize in Eco­nomic Sciences. His most re­cent book is “Glob­al­iza­tion and its Dis­con­tents Re­vis­ited: Anti-Glob­al­iza­tion in the Era of Trump.” Copy­right: Project Syn­di­cate, 2019. www.project-syn­di­cate.org

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