The Climate Business podcast: A better economic model – Dr Ganesh Nana, former Productivity Commissioner (edited excerpts)
Listen to the full episode here.
Vincent
“You studied accounting. Well, at least you set out to study accounting, right?”
Ganesh
"Yes, that was at Victoria. I thought I was going to do an accountancy major. Lasted six months, and then I said, no because I didn't see any people behind the numbers. I did some macroeconomics and it was insightful and fun. And it was because it had the numbers and it had the equations. It also had the people alongside, and I could see the two together. I had no idea what sort of career would come out, but that's where I ended up as an economics degree.”
Vincent
"There is a sense of the economy needing to be nurtured at the expense of people and planet. Does there need to be a trade-off like that?"
Ganesh
"Absolutely not. And I think that at the heart of that messaging or that narrative is a fundamental misunderstanding of what the economy is. We talk almost flippantly about 'the economy', but unfortunately, we don't interrogate what we mean by 'the economy'.”
“I would argue that 'the economy' shouldn't be portrayed as a living being. It's not a living being. It doesn't bleed. It doesn't have any ethics. It doesn't have any morals. It doesn't have any objectives. The economy is an artifical construct that people have put together. It's up to us to provide the rules and morals and ethics for that economy to function.
“For example, a long time ago, one of the rules was we abolish slavery. So businesses were no longer allowed to use slave labour in their economic activity and they howled about how it was going to hurt the economy, but the economy adjusted and got past it.
"We do need to write some fairly strong rules about behaviour to protect the planet. It's mind-blowingly obvious to me, and it's a bit worrying that we have to have rules to protect the planet, given that it's the only one we've got.
Those rules must reflect, or do reflect our values as a community, our increased understanding of what we're doing and how we can actually hurt the planet. Because the planet is a living being, unlike the economy. The economy is just a set of rules.”
“We need to acknowledge that some businesses might not function under these new set of rules, or might be less profitable. But actually, we don't want those businesses here. We want new businesses to operate that can operate and are consistent with those new set of rules.
Vincent
“There’s an assumption that the government is too large, or at least the burden on the taxpayer is too great. Do you agree and does it go to the bigger point that New Zealand is actually a relatively poor country and we can't have nice things like a functioning hospital in Dunedin?
Ganesh
“I wouldn't call it an assumption, it's an assertion by some that government is too big. Likewise, there's an assertion from others that the government is too small. Really, it depends a lot on your objectives that you want to set this economy.
“Now, if one of those objectives was we want an economy that delivers more collective goods and services, for example, health services or education services, then you might have an economy that is going to have a bigger role for government. Another collective endeavour would be saving the planet, cleaning the waterways, ensuring the oceans. Those are collective things that the government needs to do on our behalf. Whether that implies a bigger or a smaller government, that argument is a bit meaningless to me without a clear statement of what the objective is.”
Vincent
“Can we afford a world class health system in New Zealand?”
Ganesh
“We probably can't afford it at the moment because we haven't got the workforce. We haven't got trained doctors, nurses, and medical specialists. We haven't got the bricks and mortar. But, if we carry on down that path, we're going to get even worse, because we aren't doing anything to fix that resource status."
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