Episode 156 – Doughnuts with Steven Hail

Macro N Cheese devotes considerable attention to ecological economics and environmental justice. We’re always working to expand our understanding of both. Dr Hail connects the dots between environmental sustainability and the broader public purpose. It’s a focus of his new podcast, “Modern Money Doughnut”. 

But that’s done best of all in Kate’s book, when she talks about the doughnut, when she talks about moving away from growthism, from pursuing the growth of GDP as though that is an end in itself, and towards identifying those things which ought to be true of a successful society that provides everybody with the best possible chance of living a secure and safe and rewarding, engaged, empowered life while living within those planetary boundaries. 

By expanding our scope, the problems appear more complex and vast but, paradoxically, everything starts to make more sense. The goal cannot be just to clean up the planet. If we want to sustain and prolong life on this planet, shouldn’t it be a life worth living, free of exploitation and inequality? Isn’t it kind of like trying to solve healthcare without addressing health? 

Steven Hail, along with others such as our recent guest Phil Lawn, has been working to bring MMT to ecological economists. At one point there was a danger of people seeing MMT as just a more efficient way of growing the economy faster.  

Steve Grumbine first heard the term “degrowth” from Steven Hail at the 2018 MMT conference in New York City. Hail says at the time he wasn’t necessarily talking about decreasing the GDP, but about living within our planetary boundaries.  

Or to put it another way, to a situation in the future where we are obeying Herman Daly’s three principles of sustainability, not emitting waste like carbon dioxide more rapidly than the environment can safely absorb it, not using up renewables like fish in the sea faster than our environment can renew those resources. And not using non renewables like lithium that you’re digging out from under the ground at a rate which is faster than you can develop renewable alternatives for them. 

When it comes to the need to reduce the GDP, Hail says he’s agnostic. Clearly, only a tiny minority benefit from its growth. Grumbine brings up the inadequacies of the GDP as a measure of those things or activities we value. Cleaning up an oil spill increases the GDP. Hail says “We don’t value a forest in GDP until we cut it down” and goes on to talk about the history of the GDP and our worship of it. They also discuss alternative measures like the Genuine Progress Indicator and the dashboard approach Jason Hickel spoke of in a recent Macro N Cheese episode. 

We saw a decrease in carbon emissions in 2020 (thanks, Covid!) but now we’re approaching the global peak again – about seven times as high as in 1950. Hail says we’ve been talking about carbon emissions for 30 years and at this point it’s not enough to get them to fall, we need to get them down to zero.  

We’re not cutting them at all at the moment. And the message of lots of people, the Mark Diesendorfs of this world, even the Kate Raworths of this world, is that we have the technology so that we could do this. Can we do it within capitalism? Jason Hickel would say no. I think probably Bill Mitchell would say no.  

Hail is known to be optimistic. His message of hope is that we have the science and resources to live within biophysical boundaries while meeting the needs of the people. How will we make that happen? He admits he may soon find himself in the streets with Extinction Rebellion. 

Steven Hail is an Adjunct Associate Professor at Torrens University, having previously been a Lecturer in the School of Economics at the University of Adelaide. He is the author of Economics for Sustainable Prosperity. Find the Modern Money Doughnut podcast and Dr. Hail’s other work at Modern Money Lab.  

@StevenHailAus on Twitter 

Macro N Cheese – Episode 156
Doughnuts with Steven Hail
January 21, 2022

[00:00:03.110] – Steven Hail [intro/music]

There’s a variety of ways in which we, as a species, have been living increasingly unsustainably. And we’ve been doing it for the last 40 years, at least, mainly for the benefit of people who are already very well off.

[00:00:23.310] – Steven Hail [intro/music]

What keeps me awake at night is the next American presidential election. I thought the last one was the most important one, but it’s not. It’s the next one. How are you going to elect somebody – and they’ll need to have Congress behind them, as well – who understands all this and is ready to do something about it?

[00:01:35.130] – Geoff Ginter [intro/music]

Now let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:43.060] – Steve Grumbine

All right, everybody, it is Steve with Macro and Cheese. It’s been a few years since I had my guest on with me and most of you know Dr. Hail. He’s got his new show, “Doughnuts”. I’ll let him tell you more about that. He’s also got his new Modern Money Lab that he’s doing with Phil Lawn, who you heard with us a few weeks back.

And I’m lucky enough to have Dr. Hail join me and my personal growth as both a host and as an activist within the economic space, you’ll hopefully take notice that I’ve been focusing very heavily on ecological economics and ecological justice as I see the impending climate crisis closing down on us. And there’s nowhere near enough talk about it, in my opinion.

And so as you see, some of the guests like Jason Hickel, Phil Lawn, who have spoken eloquently about ecological economics and the cross section with Modern Monetary Theory, I wanted very much to bring Dr. Hail on to discuss a combination of things. You’ve got Kate Raworth with her “Doughnut Economics”, which is largely adjacent and complementary to Modern Monetary Theory.

Jason Hickel’s “Less Is More”, and of course, “The Divide”, which is one of my favorite books of all time. And so it was a great honor that Steven reached out to me because he sees the effort. And to me, this is where common thoughts and kindred spirits come together and start realizing that we’ve got a pretty major problem ahead of us and we need to learn more about how to sustain society to survive the coming crisis.

The last time I talked to Dr. Hail, the subject was eleven or twelve years, and this was based on the IPCC report. And it was one of the more impactful interviews I’ve ever done. Dr. Hail was quite passionate and let us know, quite frankly, that this was the point where all of us come to at some point whether we believe in it or not, climate crisis is going to help us become believers, sadly, on its own accord.

And to quote the great Bill McKibben, physics doesn’t negotiate and we keep acting like we’ve got time and we don’t. So without further Ado, let me bring on my guest. Dr. Steven Hail, welcome to the show, sir.

[00:04:20.130] – Steven Hail

Well, thanks for having me, Steve. It’s a delight to speak to you.

[00:04:24.310] – Grumbine

Absolutely. So you’ve put out a great book and you were kind enough to put me in the endorsements on the back. I was very flattered and happy to be included in that. And that book is very important, in my opinion, in terms of sustainability. Hopefully, colleges are picking that book up. This is where people that are studying this, they’re going to take that information and build a body of knowledge of their own.

You’ve done some really important work in this space, and you’re a champion of others’ work. You’ve been able to synthesize their work into a common thesis that you’ve put out. Tell me, what is the state of ecological economics as it pertains to Modern Monetary Theory?

[00:05:14.350] – Hail

Well, as you know, Steve, I see myself as a teacher rather than a researcher. So I did, with the help of our friend Fadhel Kaboub, I did publish a book called “Economics for Sustainable Prosperity” a few years ago. But if I was to write another book now, which I’m not planning to do at the moment, there’d be a lot more ecological economics within it.

There’d be a lot more emphasis on sustainability and perhaps less time spent in the book criticizing the old mainstream economics than in the book I wrote. I think there have been some very important books written in recent years. Stephanie’s “The Deficit Myth”, of course, is the book that’s got MMT out there into the mainstream as a best seller. And she’s such an extraordinarily effective communicator.

Kate Raworth, who you were mentioning, a couple of years earlier wrote a book on ecological economics called “Doughnut Economics: Seven Ways to Think Like a 21st Century Economist”. That did for ecological economics, an approach to thinking about economics which takes seriously the planetary boundaries that we have to live within if we are going to pass on a safe, healthy, friendly environment to our children and generations beyond them.

“Doughnut Economics” outlined at least one version of an explanation of ecological economics principles. And there’s a big overlap. You can’t read those two books without seeing a big overlap between them. It was great to see a photograph, last year I think it was, where there was a photograph of Stephanie and Kate, and somebody else who’s written an important book, Mariana Mazzucato, the author of “Mission Economy”.

Where the three women were standing there, each of them socially isolated from each other and thousands of miles apart, but each of them holding the other’s two books. And I do think “Mission Economy” is important because if we’re going to do the things that we need to do over the next decade and then over the next generation or generations, we do need to rethink the role of government.

We need to make investments not just in our political system but, importantly, in the administrative capacities of governments around the world, which during the neoliberal era have been stripped of that capacity. We need governments that are fit to lead a mission to deliver an equitable and sustainable future. Then, of course, we need to understand the macroeconomics.

We need to understand how to pay for it. We need to understand what are the real constraints that we’re faced with. And one of those constraints, of course, is not a lack of dollars and that’s where “The Deficit Myth” comes in. Both of those books talk about the public purpose and what we ought to be striving to create in the years to come as we face the most severe crisis that our species has faced since its earliest days on this planet.

But that’s done best of all in Kate’s book, when she talks about the doughnut, when she talks about moving away from growthism, from pursuing the growth of GDP, as though that is an end in itself, and towards identifying those things which ought to be true of a successful society that provides everybody with the best possible chance of living a secure and safe and rewarding, engaged, empowered life while living within those planetary boundaries.

Because if we don’t do that, then we’re not going to be able to provide people with that quality of life and we’re going to see even more millions of people, not mainly in the US, not mainly in Australia, at least in the initial phase, but in the Global South, being faced with destitution and dying prematurely because of climate change.

But climate change is not the only issue that we have to face if we’re going to build a sustainable future and I really do urge people, of course. I imagine most of your listeners have read “The Deficit Myth”, and many of them will have read “Less Is More” perhaps, Jason Hickel’s book on de-growth, which doesn’t mean quite the same thing as reducing GDP necessarily.

It means something slightly different. But perhaps many of them have not read Kate’s “Doughnut Economics” book, and I strongly advise them to do so. As far as bringing MMT and ecological economics together is concerned, that’s something which I have been working a little bit with my dear friend, Phil Lawn on for years now.

But about a couple of years ago, while I was still a full time lecturer at Adelaide Uni and teaching finance courses there and Phil was doing the odd bit of work there as a casual, we decided it was time for us to do what we thought would be most useful. And although it was great teaching in what is the Australian equivalent of an Ivy League University, and having the two of us getting away with challenging our many mainstream colleagues and in some sense, you might think rivals for the hearts and minds of the young people that we were teaching.

We decided it would be best to try and do something else. And the most important part of that something else is that in our new charity, Modern Money Lab, we are trying to develop a suite of postgraduate online courses in MMT and ecological economics so that we can produce a production line of young people in the years to come who can, we hope, move into our policy institutions, big financial institutions, the central bank, the treasury and elsewhere, and join the small number of former graduates that we’ve taught who already formed something of an underground and an underground movement in those institutions in Australia, albeit at a junior level.

That’s not the only aim but that’s part of it. So we were looking for a public University that we could collaborate with in order to do that, and we literally couldn’t find any in Australia. There are two private universities in Australia, though, and one of those private universities was most encouraging and has been very helpful. And so that’s the partner that we are aiming to go with.

And that’s what we’re going to be spending most of this year on doing, because it’s an immensely time consuming thing to do. We want to develop a graduate certificate, a graduate diploma and a master’s degree, basically, in MMT and ecological economics. That’s the most important thing that we can do. But as we face the emergency we face at the moment, everybody has to do whatever they can do that is useful.

So that’s not the only thing that we’re doing as part of that project, we ran a conference two years ago this month at the beginning of it in Adelaide at the University, actually, which I think I’m right in saying is bigger than any MMT conference has ever been anywhere else. We had 450 people there for three days. We had Bill Mitchell, we had Stephanie Kelton, we had Andres Bernal.

We had another guy from the US and marvelous fellow called Michael Murray, but we had loads of other people, too. We had leading ecological economists, not just Phil, but somebody called Robert Costanza is perhaps even better known than Phil for ecological economics. We interviewed the Warren Mosler of ecological economics, Herman Daly, over the Internet while we were at the conference, but we also had people like the leader of the Australian Coal Miners Union.

[00:14:08.730] – Grumbine

Very good.

[00:14:09.590] – Hail

We engaged with everybody that we got in there, and that led to another organization, which is called the Sustainable Prosperity Action Group, which is a campaigning group of ordinary people, although there are some academics that are members. My friend Gabriel Bond runs it. And amongst the campaigning things they do, they do some educational stuff as well.

We got to the point where some of those members, although they’re not economists, now go out and give seminars in Modern Monetary Theory, and we are just pushing as hard as we can in all directions. And so that’s what we’re doing and I’ve learnt my MMT from many sources, including Bill and Stephanie. Of course, Stephanie is a dear friend of us and so encouraging the whole time.

And I’ve learned my ecological economics from Phil Lawn. And part of what I am aiming to do is to promote some of his ideas and give him a bigger platform in the years to come. And we both contributed chapters to a book called “Sustainability And The New Economics: Synthesizing Ecological Economics And Modern Monetary Theory”. Steve Keen is also in that book.

Will Steffen, the Earth system scientist who along with Johan Rockstrom, developed the planetary boundaries approach to thinking about sustainability is in the book. And I’m afraid it’s one of those books which is a bit expensive, but it’s a fantastic collection of topics and authors I think is very, very important. I wish it wasn’t so expensive, but we’ll certainly use in our courses.

[00:15:59.050] – Grumbine

I had the opportunity to talk to Stephen, the actual editor, and Phil a few weeks back. They broke it down quite nicely. I got to be honest with you. I didn’t know that you had written a chapter, so I’m very happy to hear that.

[00:16:19.470] – Hail

I wrote the MMT chapter. It’s just basically an introduction to MMT, but it covers some things that are not always covered in MMT. So there’s a little bit about the role of private banks in there. And, of course, it finishes off just talking about MMT and a Green New Deal. I’ve left the ecological material to the experts elsewhere in the book. Steve Keen’s chapter is on the IPCC and the appalling criminal work of people like William Nordhaus, the Nobel Prize winner…

[00:16:49.930] – Grumbine

Yes.

[00:16:50.450] – Hail

…On climate change. That’s covered in there. There’s Mark Diesendorf, who was at our conference, who is one of the greatest experts in the world on the potential for moving rapidly towards 100% renewables. There’s a chapter by him in there as well, if people are interested about “is that even feasible? How would you go about doing it?” All that kind of thing.

[00:17:15.490] – Grumbine

Let me ask you a question, because I remember distinctly you and I in the New School in New York City sitting in that upper room, and you are in this panel discussion with a bunch of smart people and all of us MMT junkies sitting there listening to you. You said, “de-growth”, you were already saying this stuff, and it wasn’t exactly received with open arms. And I remember it distinctly. But I have to think that tide is turning. Where do you see the MMT community in understanding sustainable ecological economics?

[00:17:58.030] – Hail

Everybody is shifting. I think there was a danger once that MMT would just be seen as a way of – at least by some people, I’m not talking about the people that developed it or anything – as just a more efficient way of growing the economy fast. And that’s certainly how it appeared to some people in the ecological economics community.

There are different strains of ecological economics like there are MMT, and they’re not all people who say we need to massively reduce gross domestic product over time. But there was a very high degree of skepticism about MMT initially, and it’s not really me, it’s Phil that spent years fighting this. There’ve been ecological economics conferences a lot longer than they have been MMT ones.

Phil has spent years going to ecological economics conferences and trying to talk about MMT, and he’s also, as you know, been to MMT conferences and spoken about ecological economics. And I might have taught him a little bit about money and banking, but he’s taught me a hundred times as much about sustainability and about the principles of ecological economics.

I owe him such a big debt as far as that’s concerned. But, yes, I remember that event at the New School as well. Of course, we only had about ten minutes to speak, so I probably was not as clear as I should have been, although I’m extraordinarily skeptical about ongoing growth in real or inflation-adjusted gross domestic product into the medium to long term future.

When I was using the word “de-growth” back in the New School, I wasn’t necessarily talking about GDP falling. I was talking about moving away from a situation where we are well outside our planetary boundaries to one where we are inside it. Or to put it another way, to a situation in the future where we are obeying Herman Daly’s three principles of sustainability; not emitting waste like carbon dioxide more rapidly than the environment can safely absorb it, not using up renewables like fish in the sea faster than our environment can renew those resources, and not using non renewables like lithium that you’re digging out from under the ground at a rate which is faster than you can develop renewable alternatives for them.

And those principles we weren’t obeying then, and we’re still not obeying at the moment. And so using what is still our predominant model for economic activity, which is the linear throughput model, we take materials and energy from the environment, we use them to produce stuff, and then we throw it away. And we are using resources still, and we certainly throw it away a lot more than it is possible for us to do if we want to have a decent quality of life in the future.

So obviously, once you understand that, and I still think most people around the world don’t understand it, but once you understand that, you think, well, we’ve got to do this less. Now that may or may not involve an aggregate called gross domestic product shrinking. But actually, if you ensure that you’ve got in place the institutions, the regulations, the investments so that you are obeying those three sustainability principles, then, well, under those circumstances, if you can do it, it’s fine for GDP to rise, it wouldn’t be unsustainable.

On the other hand, if you are able to ensure in the future that people have what they need for a decent quality of life, there’s no involuntary poverty, involuntary unemployment, that people have excellent public services, access to education and health care, and decent housing and all the other things which make up a good life.

Well, actually, under those circumstances, it wouldn’t matter that much if GDP didn’t grow, not from the point of view of human well being anyway. And if GDP fell, that would be okay too. So the view I have now is I’m agnostic in terms of GDP growth. Agnostic in two senses, and I think this is the way Kate Raworth feels as well, if I can remember what she wrote in her book, “Doughnut Economics”.

Can real GDP grow indefinitely? I’m skeptical, but I’m prepared to say I’m agnostic given potential for process innovations, technological changes, and a further shift in what we consume from products to services. I don’t think the evidence indicates that that’s likely to be possible. But if somebody wants to come along and construct a logical argument that says, in theory, it might be at least for an indefinite future, then I don’t want to pick a fight with them or anything.

But I’m agnostic in the other way, too. I want to imagine building a future society where it wouldn’t matter if GDP didn’t grow. And I also believe that the overwhelming majority of Americans have barely benefited from economic growth, and there’s been a massive amount of it over the last 40 years. And that there are countries with a much, much lower GDP per capita per person than the US, where people have at least as good, if not a better quality of life.

And I think these are issues that need thinking about in terms of the politics, of moving within our planetary boundaries, which we might talk about in a minute, if you like, while there’s still time. I believe that we have the technology so that we can all have a good quality of life and we can live sustainably on this planet. I believe that it’s very difficult to bring that about.

[00:24:40.810] – Grumbine

This is what baffles me. I think GDP is kind of a silly metric based on my understanding and maybe you can correct me. GDP is an indiscriminate measure. Any economic activity amounts to GDP growth, whether that be insurance transactions, buying electronic software packages that have no physical presence, whether it be just services. If there’s a hurricane, if there is an oil spill, it measures whatever economic activity went into cleaning it up. It doesn’t seem like a very effective measure of anything. Is it really the best benchmark we have?

[00:25:24.910] – Hail

Well, it’s a perfectly decent benchmark in terms of it measures the total amount, more or less anyway. There’s a few arbitrary elements. This isn’t precisely true, but it’s more or less true to say that GDP is just a measure of the total amount of all the spending on all the goods and services produced in an economy over a year.

You’re right, it’s not a good measure of wellbeing and the person who is associated with developing it, Simon Kuznets, said that at the very beginning, that’s not what it was for. It’s a measure of the total market value of the goods and services produced in an economy over a year. So there are things that are counted in GDP which contribute towards GDP, which are either in themselves bad things or which are defensive expenditures against bad things.

Like when an oil tanker gets hulled and you have to clear up the mess, that will contribute towards GDP. Or if you have to spend a lot of money on air conditioning because the climate is impossible to live in anymore, that would increase GDP. Or if the country has a terribly high rate of violent crime and you spend a lot on the police force, that contributes to GDP.

Or if you have an extraordinarily unjust criminal justice system and you send a huge proportion of your population to prison, which is the case in the US, then that contributes to GDP as well. But it’s not obvious that those things contribute towards wellbeing. And of course, gross domestic product misses out lots of things that do contribute to wellbeing as well…

[00:27:12.700] – Grumbine

Right.

[00:27:12.700] – Hail

Including people working in our household, doing things for other people, looking after children, working in charities. When we do things for each other for nothing, that’s not counted in GDP. We don’t value a forest in GDP until we cut it down. Natural capital is not reflected either. Now we have come to worship GDP growth really only during the neoliberal period since about 1980.

We built highly financialized societies where the emphasis is on big companies listed on stock markets, where share prices have to go up and up and up and up. Otherwise it’s disastrous. And with rising share prices, there’s pressure on companies to keep their profits, their earnings rising with their share price, so that their price earnings ratio doesn’t get too far out of line.

So there’s pressure to grow, grow, grow profits. And the only way to do that in the long run is to grow, grow, grow the value of transactions taking place in the economy. And never mind what it’s for, because of course, if you are a neoliberal, unquestioning, free market oriented individual, then what’s something worth? It’s worth what someone will pay for it.

What’s somebody worth? It’s how much money they can make. Who are the most productive people in the US? The investment bankers, they’re the ones that earn the most money. That’s where you end up. You’ve then been sucked into growthism as a religion. It is true to say, actually, that global economic growth really got going with an acceleration from about 1950 onwards, the postwar Keynesian economic growth.

And when you look at charts of GDP, as you can do, if you go on Our World in Data site and just look up GDP, there’s a chart there, 1820 to 2018. You can just see it rising rapidly from about 1950 onwards. At least the growth between 1950 and the 1970s was for the benefit of all, or at least a much higher proportion of people, both in the US and globally too, as newly independent countries were beginning to emerge and were providing people with more of the necessities of life and building infrastructure and education and healthcare.

I’m not saying that path would have been sustainable. And, indeed, earth system scientists tell us that we stopped living within our planetary boundaries in about the year 1970, but at least the benefits of growth were widely shared out. Since 1980, that’s not been true. So we’ve been continuing to grow the global economy, largely, for the benefit of the people right at the very top.

And we’ve been driving ourselves further and further past our planetary boundaries, further and further into the range, not just where carbon emissions are concerned, but in terms of loss of biodiversity, in terms of stealing more and more of our planet from wildlife, land use changes, not just for agricultural purposes, but mining as well, and other purposes.

We have been adding suicidal levels of additional nitrogen and phosphorus to the soils. Runoff from them has been leading to the build up of algal blooms and taking the oxygen out of our waterways and, along with the sea, absorbing more carbon dioxide and increasing acidification of the sea, we’re creating dead zones in that very sea which we’re already overfishing.

And so, as you can see, there’s a variety of ways in which we, as a species, have been living increasingly unsustainably. And this is important and we’ve been doing it for the last 40 years, at least, mainly, for the benefit of people who were already very well off. And also important, in the US, you have enough economic activity already.

Things should improve and change over time, of course, as we build a more sustainable economy in society. But there’s no lack of GDP in the US already. It’s about how it’s distributed. That’s the issue. So these are the kind of things I’ve spent more time thinking about as I’ve learned from people like Phil. And Phil, of course, talks about his genuine progress indicator as a far better measure of the impact of economic activity on wellbeing than GDP.

And Kate Raworth has a slightly different approach, which is also very effective, which is that doughnut. And you mentioned the podcast that I’m doing with Gabrielle Bond, which is just a little experiment, really, although I hope some people will be interested as we loosen up a bit and as time goes by, some of the interviews that we’ll do. And I’ll occasionally do a little bit of teaching as well, a bit like Ellis used to do on your show, maybe.

But we want to bring together modern money doughnuts. Modern Monetary Theory, how are you going to pay for the investments that we need to make because we do need to make big investments, and not just in renewable energy, but including renewable energy. And that probably means for the next few years we will be growing the economy.

[00:33:08.780] – Grumbine

Yes, I was going to ask you that.

[00:33:10.830] – Hail

But we have to bear in mind we’ll be eating in to a very limited budget at our current level of global emissions. You mentioned twelve years before. It’s more like eight years now. And in the most recent COP, the details that I can remember, they were talking about cutting global emissions by 50% by the early 2030s and moving to what they call zero net emissions based on all sorts of very optimistic assumptions, I think, by 2050.

Well, first of all, if you wanted to cut emissions by more than 50% by 2030 now, given the time that’s already gone by, they were talking about 7% cuts per annum. It’s more like 10% now. Because time is moving really fast. And actually the rate at which you need to cut emissions is accelerating hugely as the amount of time that we’ve got left and our remaining budgets, as far as carbon dioxide emissions and other greenhouse gases is concerned, is already being used up.

But it’s not even as though we’re cutting it at all. Emissions fell in 2020 globally by about 5%, not by enough, but fell radically, as you might expect, given a lot of the world economy shutdown. But last year, emissions jumped back up again and they’re almost back up at what had been the global peak, which was the 2019 level.

So we’ve been talking about carbon emissions for 30 years without cutting them at all. And carbon emissions, I think now – I mentioned 1950  – are something like seven times as high as they were in 1950. That’s where we are at. And I might be wrong, but looking at the trends, this is what it looks like. It’s likely that next year they’ll be rising again.

And some people think that if you just get carbon emissions to start falling, then that will stop global warming in its tracks. But no, we have to get them down to zero, at least as far as net emissions are concerned. We’re not cutting them at all at the moment. And the message of lots of people, the Mark Diesendorfs of this world, even the Kate Raworths of this world, is that we have the technology so that we could do this.

Can we do it within capitalism? Jason Hickel would say no. I think probably Bill Mitchell would say no. I might say what Kate Raworth says, which is let’s just stop using these labels. There’ll still be in the future private businesses. There’ll still be a government and a private sector. But we need to organize ourselves so that whether GDP goes up or down, we’re living sustainably.

And that means we’ve got to get off this financialized religion of growthism and we need to have something else to aim for. And I kind of like Kate’s doughnut and the way it’s been operationalized by, I say colleagues of hers, she’s at Oxford, but colleagues of hers at Leeds University. We can quantify the things that are important that we ought to be trying to achieve.

And the discussion, the narrative is slowly moving in this direction, so incrementally slowly that if we’re not careful, we will run out of time. It won’t mean human extinction, but it is going to mean whole Pacific Nations going under the sea. It’s going to mean in the next century, enormous amount of increase in sea level rises, floods from that in the US, it’s going to mean and of course, it’s already meaning more extreme climate events.

God help us where I live next time there’s an El Nino next year or the year after. Droughts in some places. There are going to be hundreds of millions of climate refugees in the next couple of decades. That’s the future that we’re moving towards. And I want to contribute towards a more optimistic view. And that more optimistic view is there’s still time to do something about this. But you’re right. Ten years from now, there won’t be.

[00:38:17.370] – Intermission

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[00:38:43.290] – Grumbine

I want to recap a few things. We had a gentleman named Parag Khanna on here who is a cartographer, and he basically is mapping the future of people moving around, migration trends. And one of the things he had made mention of was he felt like we’re at a point now where we have to do all these different things to try to bring the climate into a sustainable way.

However, he felt like we are past the point of stopping it and now we need to adapt to it because we punted too many times. And he talked about the battle for young talent on a global scale. The next perspective was Jason Hickel. And one of the key things that he spoke of was the relationship between the Global North and the Global South, and in particular, how the United States significantly has an outsized footprint in this carbon space and how our reparations to the south really need to be technology transfers, eliminating debt, canceling these horrible restructuring programs and allowing them to have local economies that can stand on their own.

But then Fadhel Kaboub spoke about climate migration in the Middle East, where Pakistan and India having migrations based on climate there, could mean war. So there’s a lot of factors here that go beyond decarb the environment, like you were saying. The other thing, I want to focus the rest of our conversation is I raised Phil’s Genuine Progress Indicator to Jason, and Jason said that’s a great measure, but I’ve come to believe that we need a dashboard approach because there’s a multitude of things that we need to keep our fingers on. I’m wondering if you could maybe speak to what good measures might look like in the future as we try to live within the planetary boundaries that you talked about a moment ago.

[00:40:51.990] – Hail

Well, first thing I’d like to say is: all of the above. So, yes, adaptation is incredibly important, but if we don’t stop things from continuing to change, then you do end up in a situation where you can’t adapt anymore. I’m virtually certain our species is not that stupid, but we’ve already pushed ourselves out of, well, everything that we have developed as a species, really, we’ve developed in the last 12,000 years or so.

And that 12,000 years was the Holocene. And the Holocene was remarkable in the history of the Earth because the average surface temperature of the planet went up or down by only one degree over time. Prior to that, the average temperature of the planet was yoyoing all over the place. And poor old early homo sapiens and neanderthal man had an incredibly tough environment to survive in.

We don’t want to kick ourselves back into an incredibly tough environment to survive in. But of course, we already have kicked ourselves out of the Holocene. And how foolish are we? Because the scientists tell us that were it not for our actions, the Holocene was so well balanced in terms of the sun’s energy coming in and just the right amount of ice cover to reflect the right amount of feedback to keep things stable.

It probably would have lasted for another 50,000 years. Not everybody likes the movie “Don’t Look Up”, but there were some things in it that I liked a lot. And what moved me as the comet was about to strike the planet was the Leonardo DiCaprio character holding hands around the table and saying, we had everything, didn’t we? And that’s where we’re in danger. We had everything.

And if we’re not careful, well, we’ve already given some of it away. We can adjust to giving some of it away. We can’t adjust to giving it all away. You mentioned Fadhel and Jason, and the most gratifying and remarkable thing for me is that Fadhel, who I see as one of the absolute thought leaders within MMT and Jason Hickel on many issues now, you can hardly separate them out.

They have almost identical views on so much and Fadhel spends so much of his time talking about sustainability. And Jason these days – not when he wrote “Less is More”, but these days – has a good understanding of MMT and talks about things like job guarantees as well. And of course, they have a very similar and, in my opinion, completely valid narrative of neocolonialism and the relationship between the Global North and the Global South and what has to change.

And I think that’s wonderful. As far as the Genuine Progress Indicator and a panel approach like Kate’s approach, which is loosely based on the UN Sustainable Development Goals are concerned. I see them as I see MMT and ecological economics, I suppose, in a different way as being complements for each other, not substitutes. First of all, you could take the Genuine Progress Indicator.

It’s an aggregation of a large number of individual statistics so you can turn it directly into a panel of indicators. But I like Kate’s panel approach. I think for many circumstances, particularly if we’re talking both in terms of communicating with members of the public, getting the message out there, but also if we’re thinking about future international negotiations, which shouldn’t just be about climate change, I don’t think there should be any more COPs where they just talk about climate change.

I think the whole doughnut is up there for discussion, not only when we’re talking globally about planetary boundaries, where climate change is perhaps not even the most challenging to deal with technologically. The biodiversity loss is frightening. And we better get onto nitrogen and phosphorus loading too, and chemical pollutants, air pollution.

There’s a whole set of boundaries which were either outside, dangerously outside, where climate change and biodiversity loss and nitrogen phosphorus loading is concerned, we’re approaching. But we should also at the same time be talking about social foundations and talking about colonialism and a relationship between the Global North and the Global South, and the kind of issues Jason Hickel talks about where debt and other financial flows are concerned and technology transfers.

That should all be part of that negotiation in an ideal world. But when it comes down to it, when you’re talking to politicians or people in the media, it’s sometimes useful to have a single statistic to focus on.

[00:46:42.830] – Grumbine

Yes, I agree.

[00:46:44.470] – Hail

If you’re going to talk to a finance Minister or President and say, I don’t want you to focus on GDP growth anymore. They’ll say, “well, what can I focus on then? I want an indicator, a statistic, so that I can say our economy is doing better than somebody else’s.” And there are many issues with the GPI. There are even more things about it that are subjective than with the GDP, although there have been efforts to come up with an internationally standardized version of the Genuine Progress Indicator.

That’s not actually happened yet and there is no set of global comparable statistics. That’s one of the things if we can afford it, if we can just get the funding, that we’d like Phil and a team of people to be working on in the future. But having the best available at the end of that process, single statistic, which at least attempts to look at the benefits and the costs economic, environmental and social of economic activity.

And tries to subtract the costs from the benefits so that you, then, have one statistic which you can use to say, I think country A is doing a better job than country B at meeting the needs of its population within the limits of the planet. Or I think we’re doing better now than we were five years ago. I think that’s a very useful thing to have.

So I think Phil and Kate’s work is complementary. I think there’s room for both, which I think, actually, if I remember Jason Hickel’s conversation with you, I think Jason Hickel kind of said, in his view, economists are going to love something like the genuine progress indicator, but maybe not everyone else.

[00:48:35.490] – Grumbine

Right.

[00:48:36.180] – Hail

I think some politicians will love the Genuine Progress Indicator, but we don’t have to choose.

[00:48:42.270] – Grumbine

We can have both. Yeah.

[00:48:43.870] – Hail

We have to focus on wellbeing, and we need some measures of wellbeing. And, in a way, we need to go back to Keynes’s famous essay from 1930 about economic prospects for our grandchildren. We are Keynes’s grandchildren or great grandchildren. And, in that essay in 1930, people were not working 40, 50 hours a week in three jobs.

People were working 15 hours a week and having a short working life and other things were important. And that’s the kind of future that is more likely to be sustainable, too. Now how do you get there? You need to ensure people are never going to be involuntarily unemployed, that they can find work when they need it.

And then, over time, we need to encourage the development of a culture where rather than taking the opportunity to own more shiny things as time goes by and as technology improves, instead, we take the opportunity to work a bit less. When we know we’ve got the security there. We’re not being forced into unemployment and we need to be looking at how we can organize society so we don’t see the retirement age going up as it is in so many countries.

It should be coming down over time and there are many brilliant people with wonderful ideas to bring all this about. But I think Modern Monetary Theory and the federal job guarantee and comprehensive, excellent public services and excellent social security for the elderly, all these things are part of the story.

If we had the right political leadership globally, the problem would be how do we bring this all about? The technology, the institutions, how do we make the investments that we need to make this decade without blowing the carbon budget or the materials budget, without poisoning the soil and the waterways?

And while moving rapidly from a situation as far as loss of biodiversity is concerned, and here Australia is worse than almost anywhere else in the world where we are losing species at probably 100 times the rate that’s sustainable. We need to move towards close to zero, and we need to do it very quickly. And of course, that means rather than taking more land from wildlife and using it for economic activity, for mining, for agriculture, to build cities, we need to be rewilding the world.

How do we do all this? It’s really tough, I think global negotiations, yes? It might be if we get to a situation where the urgency is obvious to everybody. This might be something for the Security Council, because this is about global security. If we don’t get our head around these things, and I don’t want to be nihilistic about it because I think we do have some time to bring this about.

But if we’re ten or fifteen years down the track and the Glasgow agreement we know was insufficient, but we also know already we can see countries are not going to stick to their commitments in Glasgow. And what happens if we have a couple more failures this decade? It, then, becomes very difficult indeed.

[00:52:22.470] – Grumbine

The political economy that we live under doesn’t really have a lot of logic to it. It’s a matter of political games. It’s a matter of power, not people’s well-being. And one of the things that I gleaned from my discussion with Phil, I wouldn’t call it nihilistic, but he has a pessimistic view of the outcomes. And you brought up the movie “Don’t Look Up”, and I want to see if you agree with me.

What the movie told me was we may have the solutions, but there is no guarantee of a happy ending to this story realizing that this is not something that we can get to through inertia. There has to be positive, proactive steps to do things. And under the current political climate, we get the opposite of that, doing things that are more deleterious to the environment and to our lives.

As you said, you looked at the United States a few years ago when COVID came through and you were quite concerned for us. You thought that you were about to watch something really gruesome. And quite frankly, we need hope. Without hope, we stop doing anything. There’s no point in going forward. We all give up. And I believe MMT is genuine hope as Pavlina Tcherneva said.

However, that hope is not a guarantee. That guarantee only comes with action. Even with action, we have to acknowledge that we have burned the candle at both ends. We don’t have time to dawdle. What would be your response to that? Because I know that you’re optimistic. I want to be able to embrace that. I don’t yet, but I want to. What would be your message of hope to take us out of this podcast?

[00:54:13.590] – Hail

My message of hope is that, at the moment, there are about a third of countries around the world which are living within our biophysical boundaries, within our planetary boundaries but not meeting the needs of their people. There are about a third of countries meeting the needs of their people, or at least have high enough income to do so, but are not living within biophysical boundaries.

And there are about a third of countries that are doing neither of those things. There are no countries at the moment that are in Kate Raworth’s ring providing people with the means to have a good, secure, high quality of life while living sustainably. That doesn’t sound like a message of hope, but my message of hope is all the people that I talk to that have this expertise tell me that we have the science and we have the resources, if we were only to use them, to move to a situation where we could meet the needs of all within the means of the planet.

But it is technically possible to do so, just not within our current economic and political system. Now, I think that’s optimistic. That’s something that’s worth fighting for. It’s worth campaigning for. It’s worth educating people about. But I have to be realistic about it. I just heard your podcast with Professor Mitchell, and he said he didn’t think there would be the changes that need to happen until things were really very dire, basically.

And while I don’t think there’s much purpose to dwell on that because we still have to try, I do think that he’s probably right. I think what keeps me awake at night is the next American presidential election. I thought the last one was the most important one, but it’s not. It’s the next one. How are you going to elect somebody – and they’ll need to have Congress behind them as well – who understands all this and is ready to do something about it?

Joseph Biden understands some of it, but not really. And, of course, he doesn’t have the support anyway and doesn’t have the determination and certainly doesn’t understand MMT and ecological economics. He sort of understands global warming is a problem he would have liked to be able to address, but it’s just all too hard. That’s what it seems like to me. What happens if we get somebody like President Trump?

Under those circumstances, well, I’m already friends with people in extinction rebellion, and we are not all that far from me being on the streets with them. The next thing is it would take I’ve read people saying 25% of people. I think it would be lower than that, actually.It doesn’t take a majority of us to make societies completely ungovernable.

And if we find ourselves in the late 2020s with a rapidly deteriorating global environment still dominated by fossil fuel interests, then that’s the direction that it might need to go in. I haven’t reached that point yet, but we get to the point where we give up on the political parties and we take to the streets. But I am not prepared to sit here if I’m still alive in 10 or 15 years time talking to you when you’re 10 or 15 years older as well and saying we haven’t done anything, and it’s all gone. I haven’t reached that point yet, Steve.

[00:57:49.010] – Grumbine

Well, you haven’t reached that point yet, but I want to make a point to go with this. And as someone who is definitely on the left and, in the United States, that would be considered the far left. But in the rest of the world, I’m probably just a normal guy. But in the US I’m a radical lefty. One of the harshest truths that we have to face in this country now, I don’t know what the rest of the world is like…

[00:58:15.820] – Hail

We are just as bad as you, believe me. In Australia anyway.

[00:58:18.410] – Grumbine

In the US in particular, though, guys like Joe Biden – that, on one hand talk about these issues but then deliver a goose egg – create new Trumpers. It’s this weird cause and effect that most people won’t even acknowledge. But in the United States, people are so disgusted with status quo people that they would rather someone blow it up the wrong way than have someone do nothing.

We watch fascism come in the United States. We’ve got people in the ADOS movement who are nationalistic, anti-immigrant, that are focused solely on reparations. And I completely understand why, but they’re not going to help you with Medicare for all, climate change, Green New Deal, because the last New Deal in the United States didn’t help black and brown people.

But we’ve got to get everyone on board. But with a feckless president like Joe Biden, regardless of what he may want or not want, he has been highly ineffective. But one thing he’s been tremendously effective in is giving the right in this country more energy to double down and we’re expecting a total bloodbath for the Democrats this next election.

So it’s a real catch 22, because when you have a bad president in office, you have united opposition from the left and center in this country that come together to fight against that. But when you have a centrist like Joe Biden that didn’t get things done, it’s shocking how much more of a catalyst that is for generating new fascists. And this is a terrifying ironic thing. But a lot of Bernie Sanders supporters ended up defecting because the Democrats have not delivered on anything, having the White House, the Senate and the House. That’s just US based.

[01:00:27.070] – Hail

Let’s be optimistic. I’m reminded of a short video George Monbiot made recently, the progressive very green English journalist. When he explained, it’s not just the climate system that’s a complex system. There’s feedbacks and discontinuities or nonlinearities. But social systems are like that, too. And in complex systems, sometimes small causes can have big effects.

And you just don’t know what small causes are going to have that big effect. So what you’re doing, what I’m trying to do, what we’re all trying to do, each of us, individually, is a small cause, but we just have to keep going and we have to keep going in the hope that our efforts in the end somehow have a disproportionate impact on the system.

[01:01:24.810] – Grumbine

I love it.

[01:01:25.900] – Hail

Because that’s at least possible. It’s not inevitable that things have to go in the wrong direction. It wasn’t inevitable that Bernie Sanders had to lose.

[01:01:36.970] – Grumbine

Amen.

[01:01:36.970] – Hail

It isn’t inevitable that we all have to lose. It isn’t inevitable. And actually, as that comet gets closer and closer to us across this decade, there are more and more people that are going to look up and we have to encourage them to look up sooner. As you know, we’ve got some answers for them when they say, what do we need to do? We know the sorts of things that we need to be doing much faster or doing that we’re not doing at all. And we also and this is where the MMT comes in, really, we know how to pay for it, as well.

[01:02:14.290] – Grumbine

Amen. Dr. Hail, this was amazing. I really appreciate your positive outlook. We need hope. That’s the message of this broadcast. It’s in our hands. We have the ability, the technology is there. We have to educate and hopefully organize and make this happen. And you’re just a wonderful man. I really appreciate it. All right. Dr. Hale, I want to thank you so much for joining me. This has been a blessing. It’s been far too long. I hope I can have you back on more regularly because you’re a wealth of information and just a positive spark plug for the right causes. So, I really appreciate you, sir.

[01:02:56.590] – Hail

Well, thanks for all your efforts, Steve.

[01:02:59.230] – Grumbine

Well, thank you. Thank you so much. Let everyone know where we can find more of your work.

[01:03:05.530] – Hail

Well, we have modernmoneylab.org.au. The au stands for Australia. That’s our thinktank and charity. And there is another organization called the Sustainable Prosperity Action Group. A podcast I’m doing with my dear friend, Gabrielle Bond called “Modern Money Doughnuts”. We’ll tend to be focusing less on the superstars of MMT, and we’ll talk to some other people about Modern Monetary Theory, but also about ecological issues as well.

And both Phil and I, he’s a professor, I’m an adjunct professor at Torrens University in Adelaide, and at some point during this year, I hope we’ll be in a position to start promoting, globally, those courses. They in no sense compete with or do the same thing as Professor Mitchell’s MMT course. His course is a free one-off course with, of course, one of the founders of Modern Monetary Theory.

Phil and I are not founders of Modern Monetary Theory or ecological economics, for that matter. What we’re doing is instead developing qualifications, a graduate certificate, graduate diploma, master’s degree and doctorates for people who want to take this a lot further and maybe even make a career out of building a better, more sustainable future.

[01:04:32.830] – Grumbine

Well, with that, I’m going to say thank you, sir. I really appreciate this, once again. My name is Steve Grumbine. I’m the host of Macro N Cheese and my guest, Dr. Steven Hail. We’re out of here.

[01:05:08.560] – [End credits]

Macro N Cheese is produced by Andy Kennedy, descriptive writing by Virginia Cotts, and promotional artwork by Andy Kennedy. Macro N Cheese is publicly funded by our Real Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.

Discussed in the podcast

Steven Hail 

Steven Hail is an Adjunct Associate Professor at Torrens University, having previously been a Lecturer in the School of Economics at the University of Adelaide. He is the author of Economics for Sustainable Prosperity. Find the Modern Money Doughnut podcast and Dr. Hail’s other work at Modern Money Lab.  

@StevenHailAus on Twitter 

Full bio, databank, publications, and “Modern Money Doughnut” podcast available at https://modernmoneylab.org.au/ 

Modern Money Lab Inc. (MML) is a research institute, which contributes towards the development of new knowledge relating to political economy and political science, particularly relating to the fields of fiscal and monetary policy, international finance, employment policy, climate change policy and ecological and social sustainability. 

Sustainable Prosperity Action Group: https://sustainable-prosperity.net.au/ 

Book: Economics for Sustainable Prosperity, by Steven Hail  https://bookshop.org/books/economics-for-sustainable-prosperity/9783030081485 

Macro N Cheese episode 6: https://realprogressives.org/podcast_episode/episode-6-12-years-with-dr-steven-hail/ 

Macro N Cheese episode 33: https://realprogressives.org/podcast_episode/episode-33-sustainability-in-a-modern-money-economy-with-steven-hail-phil-lawn/ 

Phil Lawn 

Phil Lawn is a professor at Torrens University, a former associate professor at Flinders University and is currently a visiting lecturer in environmental and ecological economics at The University of Adelaide, South Australia. 

Bio: http://www.global-isp.org/philip-lawn/ 

Books: https://www.thriftbooks.com/a/philip-lawn/1594384/ 

Macro N Cheese episode 154: https://realprogressives.org/podcast_episode/episode-154-sustainability-the-new-economics-with-stephen-williams-and-phil-lawn/ 

Kate Raworth 

Kate Raworth (sounds like ‘Ray-worth’) is a renegade economist focused on making economics fit for 21st century realities. She is the creator of the Doughnut of social and planetary boundaries, and co-founder of Doughnut Economics Action Lab. 

Website: https://www.kateraworth.com/ 

Book: “Doughnut Economics” https://bookshop.org/books/doughnut-economics-seven-ways-to-think-like-a-21st-century-economist/9781603587969 

Mariana Mazzucato 

Website: https://marianamazzucato.com/ 

Book: “Mission Economy”  https://bookshop.org/books/mission-economy-a-moonshot-guide-to-changing-capitalism-9781799947318/9780063046238 

Stephanie Kelton 

Website: https://stephaniekelton.com/ 

Book: “Deficit Myth” https://bookshop.org/books/the-deficit-myth-modern-monetary-theory-and-the-birth-of-the-people-s-economy/9781541736191 

Photo: Raworth, Mazzucato, Kelton 

Bill Mitchell 

Professor of Economics, University of Newcastle, Australia. Cofounder/codeveloper of Modern Monetary Theory 

Edx course  https://www.edx.org/course/modern-monetary-theory-economics-for-the-21st-century  

Blog: http://bilbo.economicoutlook.net/blog/  

Website: http://www.billmitchell.org/  

Macro N Cheese Ep 1: https://realprogressives.org/podcast_episode/episode-1-putting-the-t-in-mmt-with-professor-bill-mitchell/  

Will Steffen 

Bio: https://en.wikipedia.org/wiki/Will_Steffen 

Johan Rockström 

Bio: https://www.stockholmresilience.org/meet-our-team/staff/2008-01-16-rockstrom.html 

Herman Daly 

Nobel Peace Prize for Sustainable Development https://np4sd.org/about/herman-daly/ 

Herman Daly’s Three Rules: 

1. Sustainable use of renewable resources means that the pace should not be faster than the rate at which they regenerate. 
2. Sustainable use of non-renewable resources means that the pace should not be faster than the rate at which their renewable substitutes can be put in place. 
3. Sustainable rate of emission for pollution and and wastes means that it should not be faster than the pace at which natural systems can absorb them, recycle them, or render them harmless. 

Fadhel Kaboub 

Associate Professor of Economics, Denison University https://denison.edu/people/fadhel-kaboub 

President, Global Institute for Sustainable Prosperity http://www.global-isp.org/  

Twitter: @fadhelkaboub  

Robert Costanza 

Ecological Economist and Professor of Public Policy at The Australian National University https://www.robertcostanza.com/  

Mark Diesendorf 

Professor of Environmental Studies, University of New South Wales, Australia https://research.unsw.edu.au/people/associate-professor-mark-diesendorf  

IPCC – Intergovernmental Panel on Climate Change 

The United Nations body for assessing the science related to climate change 

Website: https://www.ipcc.ch/

Chart: GDP 1820-2018 https://ourworldindata.org/grapher/gdp-world-regions-stacked-area?country=Sub-Sahara+Africa~Latin+America~Middle+East~South+and+South-East+Asia~East+Asia~Western+Offshoots~Eastern+Europe~Western+Europe  

Macro N Cheese Episode: #147 Parag Khanna https://realprogressives.org/podcast_episode/episode-147-mapping-the-future-of-humanity-with-parag-khanna/  

Book: Sustainability and the New Economics, Stephen J. Williams, Rod Taylor https://link.springer.com/book/10.1007/978-3-030-78795-0 

Book: “The Divide” by Jason Hickel https://bookshop.org/books/the-divide-global-inequality-from-conquest-to-free-markets/9780393651362   

Book: “Less Is More” by Jason Hickel https://bookshop.org/books/less-is-more-how-degrowth-will-save-the-world/9781786091215  

Movie: “Don’t Look Up” https://www.netflix.com/title/81252357  

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