Polling conducted by Believe in Scotland indicates that the objective of a wellbeing economy has wide support amongst people who hold a variety of political views. Exploring how Scottish independence could create an opportunity to embark on a transition towards such an economy is, therefore, likely to be critical to winning over undecided voters.
What does ‘wellbeing economy’ mean?
The term ‘wellbeing economy’ needs some explanation otherwise there is a risk that it becomes just a campaign slogan. In a nutshell ‘wellbeing economy’ is shorthand for an economy driven by prioritising essential needs and that our overall prosperity depends on living within planetary limits.
Drilling down further, wellbeing is based on the provision of all the essentials that we all need to live happily, and these are reflected in the Universal Declaration on Human Rights; including rights to food, shelter (housing), energy, health, education, meaningful and rewarding work, etc.
A commitment to ‘wellbeing’ needs to be framed in a new Scottish written constitution or a Bill of Rights. This would mean that all future Scottish governments ensure all citizens have access to: wholesome and nutritional food, adequate housing, affordable energy, rewarding work at a level of pay sufficient to sustain a socially acceptable standard of living, free health and social care services, free education, pensions sufficient to maintain quality of life. Wellbeing also requires that all citizens are empowered and can participate in decision making in matters which affect them.
Wellbeing requires fundamental change
The mainstream narrative espoused by Scotland’s leaders and advocates of conventional economics argues that we must grow the economy in order to be able to pay for the public services that wellbeing relies on. Hence, we frequently hear Scottish Ministers speak of “growing a wellbeing economy”. This is despite the Scottish Government’s membership of the ‘Wellbeing Economy Alliance’ (WEAll), which insists that focusing on growth is an anathema to wellbeing.
The idea that growth will lead to a wellbeing economy is a case of putting the cart before the horse. It is based on the false belief that only the private sector can create the wealth which public services rely on. The private sector has an important role to play in a wellbeing economy. However, it can only fulfil this role if the state adopts policies which reallocate resources towards production of goods and services which people need in order to live well within planetary limits.
What we do not need, is an economy based on rising house and asset values or a focus on increasing GDP and debt fuelled consumption. Fitting wellbeing objectives into the current model of the economy is like fitting a square peg into a round hole. A wellbeing economy requires transformation with the focus on what we actually need to produce with the resources at our disposal to meet the essential needs of everyone. GDP growth may well follow, but it will be a consequence of production for wellbeing, not the cause.
Where should we start?
So where should we start on the journey of transformation?
Top priorities in the initial stages of the transformation will be:
- Rebuilding health and social care services and promoting healthier life choices and active lives.
- Provisions for food security and increased national self sufficiency, giving everyone access to food of sufficient nutritional value to sustain a healthy and active life.
- Building national energy self sufficiency and security and an energy system that ensures everyone has access to a reliable supply at minimum cost.
- Building new social housing and upgrading Scotland’s housing stock.
- Introduction of a proper level of minimum income and a real living wage.
Even as a start point, these are major undertakings which will place enormous demand on our resources and call for major public investment by our government.
‘How will we pay for it?’ – the recurring question
Unless the government has control of the nation’s money supply by issuing our own currency, these policy objectives can only be implemented by borrowing in another currency and by relying heavily on private investment and/or foreign investment. Borrowing in another currency would leave Scotland having to use resources to increase exports to earn foreign currency, undermining the objective of transforming the economy to serve the needs of our people first and foremost.Foreign investment means we will be at the mercy of decisions taken elsewhere and profits would be taken out of our economy to benefit overseas investors. Private investment would also be driven by commercial decisions which conflict with priorities of a wellbeing economy transformation programme.
Reliance on private finance to provide vital public goods and services constitutes the privatisation of the state itself, a process which culminates in what we are witnessing now in the USA under the second Trump administration. There is no need to involve private finance when the state has the full capacity to provide the necessary funding when it uses its own currency.
The role of public and private sectors
Viewing the state as the dominant partner, working with and shaping the role of the private sector, is an entirely different proposition than that advocated by Scotland’s current political establishment and orthodox neoliberal economists. These parties continue to insist that we must grow the economy by attracting inward investment, by creating an export-led economy, and bending to the demands of the private sector in the belief that this will provide the money needed to fund public spending. Such “trickle down” economics has totally failed people everywhere, except for the extremely wealthy.
How the private sector and government can achieve a wellbeing economy
Whilst we cannot rely on markets and the private sector to deliver a wellbeing economy, the private sector does have a vital role to play through its capacity to deliver projects being funded by government. However, the government has the mandate to determine how resources are to be allocated through its currency management, regulation of the financial system and the markets for essential goods and services. When a government can use its own currency, it can choose how public money is invested, in accordance with the democratic mandate given by the people. Those choices are not based on whether they are profitable, but on whether they fulfil the democratic mandate and deliver valuable public assets which meet the needs of all the people.
Nationalisation of key sectors of the economy may be required, although other forms of public ownership are possible: communal ownership, local authorities’ control, or mutual ownership via savings institutions and our own pension funds.
Government deficits matched by valuable public assets
Given the active role of the state in leading the economic transformation, it is inevitable that there will be a large fiscal deficit during the early years, and this can only be sustained if we have our own currency. Provided the public spending is used effectively, and our resources used wisely, then the deficit will be matched by new valuable assets which benefit the people of Scotland. By ‘value’ I mean their ‘use value’; how well they meet people’s essential needs, not the monetary value associated with what they cost to produce. Using ‘cost/benefit analysis’ in decision making can lead to poor choices because the benefits of assets such as. for example, a thriving health service cannot be reliably measured in monetary terms. Human health, and wellbeing more widely, ha intrinsic value.
What would these ‘valuable assets’ be?
- A properly resourced and functional health and social care service.
- A reliable energy system and network, delivering energy security for all at lowest possible cost to consumers.
- An adequate supply of quality housing built to or upgraded to the highest standards, using sustainable materials and built on suitable land away from the risk of flooding or rising sea levels.
- A resilient food system producing nutritional food available to all, capable of withstanding shocks to national and global supply chains, and adaptable to climate change.
Wellbeing and the use of resources
These challenges will create demand for a large workforce with the full range of skills required for the construction of the infrastructure related to our health, social care, energy and housing needs. We will need more health and care professionals and an increase in numbers of those with the knowledge and skills to produce food on both a large and small, community-based scale. Equipping our education and skills training system to meet the demand for these professions will be vital. This means that further public investment in education will be called for.
We will also need to rethink the numbers of school leavers progressing into further education at university and recognise the importance of apprenticeships and technical training leading to rewarding career opportunities requiring manual and technical skills.How we use our available land will also be important. Building health, education, energy and housing infrastructure whilst allocating adequate land for food growing demands careful planning. We will need to reforest large tracts of land with a view to restoring natural, native woodland but also to produce timber for construction. Land also needs to be protected in order to preserve and restore eco-systems and bio-diversity. We certainly cannot spare land for false climate ‘solutions’ such as ‘carbon offsetting’ or growing crops for bio-fuel.
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