Critique of Neoliberal Economic Model


Grandparents for a Safe Earth developed from a series of discussions which focussed upon the overuse of the Earth, especially by the current human population. Evidence of this overuse had come from the World Wildlife Fund which noted that since the mid 1970s, more of the Earth was being used than was able to be replenished. During the subsequent 40 years, this trend has accelerated. In addition, studies on the integrity of Planetary Boundaries have shown that four out of ten of these had been broken by 2015.

When we founded Grandparents for a Safe Earth, we decided that our main focus would be upon preventing climate change, especially by campaigning to keep fossil fuels in the ground. Our main objective for achieving  this has been to promote disinvestment from fossil fuels and to seek reinvestment in renewable energy and energy efficiency.

We have written this paper because we have come to the conclusion that the current economic model and the ideology which supports it is the principal cause of the overuse of fossil fuels; and that even if we contribute to some progress in keeping fossil fuels in the ground, the economy and the global culture which accompanies it will continue to deplete the Earth. For the sake of our descendants, we regard a worldwide debate about the fitness for purpose of Neo-Liberal Capitalism to be essential. We hope this paper will contribute to that debate.

Critique of Neo-Liberal Capitalism especially in relation to our descendants/grandchildren.

  1. This critique attempts to develop an aim of Grandparents for a Safe Earth: “To advocate an economy which respects the finite nature of the earth and what it can provide”. It has particular relevance for the well-being of our descendants/grandchildren.

2. Concerns about the Neo-Liberal economic model and its effects:

a) Its aim of never-ending growth upon a finite planet uses more of the Earth than the Earth can provide. According to research by the World Wildlife Fund, the world’s human population is using the Earth as though we have one and a half planets; and in some countries this overuse is much higher. The UK uses the Earth as though we have access to more than three planets. See ‘Living Planet Report 2014’ which states ‘’ We are using nature’s gifts as if we had more than just one Earth at our disposal. By taking more from our ecosystems and natural processes than can be replenished, we are jeopardizing our very future’’.

b) Although Climate Change (via increasing levels of CO2 emissions) receives most of the focus of concern with regard to this overuse, and formed the original basis of our group, it is only one of four planetary boundaries which have already been broken. The others are ‘’the extinction rate; deforestation; and the flow of nitrogen and phosphorous (used on land as fertilizer) into the ocean. What the science has shown is that human activities — economic growth, technology, consumption — are destabilizing the global environment,”

c) The absence of limits upon the accumulation of wealth leads to increasing inequality and consequently to the undermining of social stability. Despite considerable promotion of the Trickle-Down Theory that everyone shares from economic growth, the opposite is true. Levels of inequality continue to grow year by year. Research by Oxfam 18th Jan 2016 reports that the 62 wealthiest people in the world own as much wealth as a half of the world’s population.

d) The overall system promotes lack of transparency. Scarcely a day goes by without exposures by Non-Governmental Organizations (NGOs) and parts of the media about corruption by financial and economic corporations and the collusion of some politicians in this. The amassing of wealth by investment in off-shore funds which promote tax avoidance and make tax evasion more possible, exemplifies this. The poorest lose most from the loss of taxation whilst the richest gain from its avoidance and evasion.

e) It also promotes excessive consumption. By this we mean consumption which is not sustainable and therefore will radically affect the generations who follow us. This refers to aspects of the Earth which have always been in limited supply such as specific minerals; and those which were at one time capable of a steady renewal such as fisheries and forests. It is important to understand that Gross Domestic Product which is still the basic measure of economic ‘health’ can be measured by either production or consumption. Both are integrally related to the ongoing pursuit of economic growth.

The Neoliberal Economy requires that consumption be promoted by advertising which goes beyond providing information and instead encourages wants. The difference between wants and needs is spelled out in Marshall B. Rosenberg’s ‘Nonviolent Communication’ where needs and values are regarded as universal human attributes whilst wants are strategies for meeting them. A particularly valuable book about the overuse of the Earth and the need for an economy which ensures that future generations receive their share of what Earth offers, is ‘Supply Shock by Brian Czech’.

f) The standard measure of economic (and political) success by Gross Domestic Product (GDP) is now recognised as extremely limited because it leaves out major aspects of what it means to be human: well-being, happiness, relationships, health, community involvement and others. Studies of inequality show that increases in income above a certain level are not accompanied by increases in happiness and well-being. See    ‘The Spirit Level: Why More Equal Societies Almost Always Do Better’ was published in 2009. Written by Kate Pickett and Richard Wilkinson, the book highlights the “pernicious effects that inequality has on societies: eroding trust, increasing anxiety and illness, (and) encouraging excessive consumption”. It shows that for each of eleven different health and social problems: physical health, mental health, drug abuse, education, imprisonment, obesity, social mobility, trust and community life, violence, teenage pregnancies, and child well-being, outcomes are significantly worse in more unequal rich countries. There is an additional danger of international instability resulting from inequalities between nations, as seen at times of large-scale migration.

g) The emphasis upon Economic growth and the maximisation of profit as primary financial and economic aims constantly leads to the side-lining of environmental, social and political aims. These latter areas generally require a long-term perspective whilst maximisation of profit much more often promotes short-term ones. Financial and economic power, supported by political, military and media power is increasingly what runs the world.

h) Citizens across the world are experiencing a lessening of their democratic influence as political institutions more and more give way to economic ones, especially via the power and influence of large corporations, all of which have a vested interest in their own growth and survival. We need look no further than the current negotiations for the Trans-Atlantic Trade and Investment Partnership (TTIP) in Brussels, where there is a risk that public services, health and safety regulations and employment safeguards will be undermined by tribunals which operate outside national legal systems.

3. Who and what loses from this economic system and the ideology which supports it?

The primary losses are to:

a) Earth’s ecosystems at all levels.

b) Our humanity, especially our needs for truth, reality, trust, freedom and security.

c) Our children, grandchildren and those who follow them (because the more we over-use and destroy what the Earth provides, the less security and well-being they will receive).

d) The poorest peoples, but eventually everyone. Women are particularly vulnerable because they often experience a lower status than men even though the UN Food and Agriculture Organisation states that they produce more than half of the world’s food.

See in support of sections 2 and 3 above.

4. Reform of the current economy or its replacement by a different one?

a) It is vital to recognise that although there are proposals for a different economy  (usually referred to as a Circular Economy – one in which ‘wastes’ are  fully or partly replaced by the recycling of materials) these are in fact surface reforms of the present one. So the first question has to be whether the current economic model is capable of being reformed?

It seems that as long as the following features of this economy continue to be integral to it, it will remain not fit for purpose:

i) Never-ending growth as measured by GDP.

ii) No limits to the accumulation of wealth.

iii) Maximisation of profit.

iv) No limits to the processes of inequality.

v) Little consideration of long-term issues such as the integrity of eco-systems, the intrinsic value of life-forms, and the well-being of our descendants/grandchildren.

b) Our understanding of two models of circular economy, namely The New Climate Economy   and the Dame Ellen MacArthur Foundation, is that despite considerable positive developments, they still contain the essence of these five features.

5. Replacement of the current economy by a different model of economy.

A replacement economy raises the question of who has the authority and power to run it? If human beings are truly to turn to One-Planet Living, this will necessitate an economy which is fully accountable to political institutions. It will also require a politics which is promoted by, and accountable to, citizens who are themselves committed to a radically different set of values concerning care of the Earth and care of people. Many of these values are referred to in section 2 above.

A model which seems to offer a fit replacement is the Steady State Economy put forward by The Center for the Advancement of the Steady State Economy. This defines ‘’ A steady state economy (as) an economy with stable or mildly fluctuating size. The term typically refers to a national economy, but it can also be applied to a local, regional, or global economy. An economy can reach a steady state after a period of growth or after a period of downsizing or degrowth. To be sustainable, steady state economy may not exceed ecological limits.’’   Thus instead of the Earth being a subsidiary of the economy as it is at present, the economy will be a subsidiary of the Earth and of political institutions as referred to above. The subject of degrowth is taken up extensively by the Post-Growth Project of the Green House think tank

Another model which puts the Earth and the Common Good of people is the Social Ecological Economy put forward by Clive Spash and colleagues in the European Degrowth movement

Finally, we recognize that if the world’s population continues to grow as at present, there will be additional pressures on the Earth’s limited resources. This is likely to lead to an increase in levels of poverty unless a much greater emphasis is placed on redistributing wealth from the richest to the poorest. However, the neo-liberal model is unlikely to be  the basis to consider any such policy of redistribution.

  1. Conclusion. 

In looking at the negative aspects of a neo-liberal economy, we have particularly focused on long-term effects. This seems natural for a group that is concerned about the well-being of future generations. How our descendants are going to fare is something that is close to many people’s hearts, and we hope that others will find this paper useful. We are not advocating any particular party-political approach, but we are seeking an urgent world-wide debate about a different way of running our economy.

Brief Bibliography for a Steady State or Dynamic Equilibrium Economy or Social Ecological Economy. (These are economies which are reduced to a level which promotes a sustainable Earth and which shares what Earth provides in a much more equitable way.):

Blewitt, John, and Cunningham, Ray, The Post-Growth Project: How the End of Economic Growth Could Bring a Fairer and Happier Society, London Publishing Partnership 2015

Center for the Advancement of the Steady State Economy, CASSE Position on Economic Growth, 2004

Daly, Herman E., Beyond Growth, the Economics of Sustainable Development, Beacon Press 1997

Dietz, Rob, and O’Neill, Dan, Enough is Enough, Earthscan 2013

Heinberg, Richard, The End of Growth: Adapting to Our New Economic Reality, New Society Publishers 2011

Jackson, Tim, Prosperity Without Growth: Economics for a Finite Planet, Earthscan 2010

Monbiot, George, How Did We Get Into This Mess?, Verso 2016

Ostry, Jonathon D., Loungani, Prakash and Furceri, Davide, Neoliberalism: Oversold?, Finance and Development (a publication of the IMF), June 2016, Vol. 53, No. 22016

Schumacher, E. F., Small is Beautiful: Economics as If People Mattered, Blond and Briggs 1973

Simms, Andrew, Johnson, Victoria and Chowla, Peter, Growth Isn’t Possible, New Economics Foundation, 2010

Spash, Clive, Social Ecological Economics: Understanding the Past to See the Future, The American Journal of Economics and Sociology, Vol 70, Issue 2 April 2011.

Spash, Clive, This Changes Nothing: The Paris Agreement to Ignore Reality, Globalisations April 2016.


1 Response to Critique of Neoliberal Economic Model

  1. gfase says:

    test comment from Phil to see if this comes to me or to colleagues

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