Social Investment: Chance for a Mentality Shift 1
Making a road is an investment. The return on that investment is the use people make of it personally and for earning income. Building water supply, waste water and sewage disposal systems are investments which deliver returns to people in various ways, including irrigation, manufacturing and energy and people's sustenance and health. Likewise the electricity generating and distribution system. Roads and water and electricity systems are capital. We invest in and maintain them because we get a return on the capital invested. Likewise, ecosystems are capital. They provide food, water and atmospheric services that are critical to our wellbeing indeed, our existence. Logic suggests strongly that we should invest in and maintain the ecosystems on which we depend to ensure the services they provide continue.Well built, well maintained roads, water, electricity and ecosystems are positive for the economy as well as for the society that operates that economy. They are infrastructure, social and economic. We have at times learnt that there is an economic and social cost if we do not maintain that infrastructure and expand it commensurately with population growth and activities. The government has required subnational governments and, more recently, itself to plan ahead for 30 years to counter the put it off for another year syndrome that afflicts revenue constrained councils and governments and amounts to a transfer between cohorts and even generations. Proper national, regional and local balance sheets require that investment and maintenance are accurately accounted for. The same goes for a proper government balance sheet, which I understand the government is now aiming for.We have been slower to recognise that ecosystems are social and economic infrastructure. Consequently we have been slow to recognise the value and necessity of accounting properly for maintaining and, where necessary, restoring ecosystems that is, maintaining our stock of natural capital. We have only fairly recently begun to realise the actual and potential future cost of not maintaining this natural infrastructure. But that is now on the agenda, not at cabinet level, where the presumption is still "the economy or the environment" but increasingly among the public and even increasingly in business [though see below, there has been some movement since this lecture was delivered] There is a nascent, growing recognition that individuals and firms which degrade or exploit ecosystems without maintaining them are in effect charging an economic rent, which Adam Smith correctly deplored.We are now also beginning to learn that there is a cost in social fragmentation and division. This cost is political and, as a consequence, economic. The political form of the cost is populism, evident across Europe and North America where politicians and parties have been mining frustration, resentment, fear, stress and anger. Complacent commentators trapped in decaying orthodoxies told us Donald Trump would in time succumb to Republican Party supporters' rational calculations and the party establishment's management. But the Tea Party tapeworm in the Republican Party's gut has consumed nearly all its nutritious moderate conservatism. The Republicans used to settle for 70% of their wishes, as the sainted Ronald Reagan did, but now insist on 99% epitomised in Ted Cruz. The immoderate Trumpet calls to ex middleAmericans or still just middle Americans are in harmony with their grumping that their country has been stolen by the elites, illegal Mexican migrants, Chinese exporters, panderers to blacks, gays and worse and much else. [In fact, Trump won the presidential election on 8 November, also against the complacent expectations of mainstream elitist commentators. Similar sets of gripes have given Britain the Jeremy Corbyn Labour party and the United Kingdom Independence party [and the vote for Brexit in June] France the National Front, Spain Podemos, Greece Syriza, Poland the Law and Justice party, Scandinavia rightwing rejectionists among many such anti parties across Europe.