think about a longer-term reconfiguration of the British economy and how we ensure a just transition as we
move to a greener economy. Tackling climate change doesn’t have to cost us dear. In fact, it can make us
more prosperous and more secure.
Productivity in Britain has been declining since the imposition of austerity in 2010, and is now nearly
stagnant. Business leaders have little reason to believe that expanding their operations through the
introduction of new technology will yield sufficient returns on investment. Few have confidence that
demand for their goods and services will hold up in the face of declining real wages, which has caused
people to struggle even to pay for essentials.
We should strive to ensure that workers are lifted up by the tide of
innovation and investment promised by the green new deal, not swept
aside by it
With little reason to innovate, employers have fallen back on reducing staff pay, benefits and conditions,
reinforcing the decline in real wages and causing enormous increases in precarious work.
Neoliberal economists still hold that any state intervention in an economy, even one in such distress as the
contemporary British economy, is counterproductive. They argue that every pound the state invests is a
pound taken from the private sector. But, as the economist Mariana Muzzucato has demonstrated in her
book The Entrepreneurial State, the myth of a lumbering, bureaucratic state vs a dynamic, innovative private
sector is inaccurate.
State expenditure drives innovation when private enterprise refuses to do so. It paves the way for future
product development by business, and creates demand by putting money in the people’s pockets. It can also
drive forward innovation by giving educational opportunities in further and higher education that allow
young adults to move into new and exciting sectors of work such as “green collar jobs”.
Mazzucato’s work owes much to the economics of Keynes. In Economics for the Many, edited by John
McDonnell, the economist Ann Pettifor makes a compelling case for a green new deal. Keynes argued for
public works to kickstart the 1930s economy and implementing a similar programme now could shift the
UK economy from its dependence on carbon-based fuels to renewable energy sources. The widespread use
of recyclable materials, for example, would help to create an environmentally sustainable economy, create
jobs and drive innovation and productivity.
We should strive to ensure that workers are lifted up by the tide of innovation and investment promised by
the green new deal, not swept aside by it. In Spain, coal miners’ unions have agreed a landmark settlement
with the Spanish government whereby economically inefficient mines will be closed. But, crucially,
investment will be put into ensuring that work needed to make the mines safe will go to former miners.
There will also be a significant infrastructure investment in communities – again favouring former miners –
and new jobs in the creation of sustainable energy infrastructure.
A green new deal, agreed between the state and representatives of workers, can ensure a sustainable and
viable economy for the 21st century on the basis of a just transition that is real for workers moving from a
carbon-based to a sustainable jobs market.
Climate change is considered to not be an industrial issue, so workers are prevented from taking industrial
action to challenge it. But tackling climate change will be central to the development of the British economy
in the 21st century and an essential way of improving the lives of working people.