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Do you know your circular economy from your just transition? How about your green growth from your degrowth? Over the summer, SCOTONOMICS will demystify the economic frameworks doing the rounds in Scotland.
Economic frameworks can be handy tools to simplify complex ideas. But they can also be used as lazy, throwaway concepts designed to misdirect. Demystifying our popular frameworks will help us to have a clearer picture of where our policymakers are steering the economy.
In this article, we will categorise 10 common economic frameworks. You will have heard of most of them, but we bet you could not define more than a few. The vagueness of a framework is part of its power and weakness.
We start by separating these frameworks into two economic paradigms: a Growth Paradigm and a Steady State paradigm. The titles of the paradigms are less important than the idea that many frameworks sit inside or outside the current economic framework.
We aim to help you more clearly identify whether our policymakers are discussing real change or some minor tinkering of the economic system. One of our main objectives is to get people talking about these concepts, so please add a comment to the article, share the diagrams and add your thoughts on social media. The placement of some of the following frameworks is subjective.
The growth paradigm is centred on the belief that we can continue to grow the economy by increasing productivity, and technological advances will always be able to deal with or mitigate any of the problems created by growth.
The steady-state paradigm is the belief that every country needs to find a steady-state economy that operates within its ecological boundaries while providing for people, place and the planet.
Figure one (above) is the SCOTONOMICS framework of frameworks.
Figure two (below) shows where the Scottish Government would place these frameworks based on their definitions and use within over 10 policy and strategy documents from 2017 to 2021.
Beware a new framework for the same type of economy!
You will notice that a just transition, a wellbeing economy and community wealth building have switched places. We don’t think this is controversial.
The Scottish Government would agree that the economy has to grow to be successful, and the larger the GDP number, the better. Scotland’s National Strategy for Economic Transformation, released last year, says as much. It states that progress towards a just transition in a "decisive decade" will see Scotland "significantly outperform the last decade" in GDP growth. But this time, it hopes the benefits will be shared equally without increasing environmental damage. We believe this is promising the impossible.
The need for a paradigm shift
The direction for the Scottish economy should be built upon the five frameworks placed in the steady state paradigm. We will argue that the Scottish Government and more Scots must abandon the current economic paradigm to do that successfully.
We must realise that the promise of a just transition and a wellbeing economy, delivered by community wealth building, must be created within the doughnut and use a much smaller ecological footprint. In other words, it must operate in a different economic paradigm than we currently have.
Do you believe a just transition or a wellbeing economy is deliverable within the growth paradigm? Join us on July 26 at 2.30pm to discuss this month's posts.
