by Diane Coyle
The world's leading economies are facing not just one but many crises. The financial meltdown may not be over, climate change threatens major global disruption, economic inequality has reached extremes not seen for a century, and government and business are widely distrusted. At the same time, many people regret the consumerism and social corrosion of modern life. What these crises have in common, Diane Coyle argues, is a reckless disregard for the future--especially in the way the economy is run. How can we achieve the financial growth we need today without sacrificing a decent future for our children, our societies, and our planet? How can we realize what Coyle calls "the Economics of Enough"?
Running the economy for tomorrow as well as today will require a wide range of policy changes. The top priority must be ensuring that we get a true picture of long-term economic prospects, with the development of official statistics on national wealth in its broadest sense, including natural and human resources. Saving and investment will need to be encouraged over current consumption. Above all, governments will need to engage citizens in a process of debate about the difficult choices that lie ahead and rebuild a shared commitment to the future of our societies.
Creating a sustainable economy--having enough to be happy without cheating the future--won't be easy. But The Economics of Enough starts a profoundly important conversation about how we can begin--and the first steps we need to take.
Coyle on her book:
Fred Pearce on The Independent wrote:
"For a book on such controversial topics as climate change, long-term government debt, and political gridlock, it maintains a healthy, balanced point of view. While the subtitle about how to 'run the economy' may sound like advocacy of central planning, that is not the message. Instead, Dr. Coyle presents the view that we are all integrally involved in run-ning the economy and making crucial choices about the world we will pass on to future generations. She quotes and evaluates the thoughts of economists across the spectrum and does not simply repeat their ideological answers. Instead, she lays out both the pros and cons of each and places them within the context of what needs to be done to make the economy sustainable now and in the future.For anyone interested in how today’s economy will impact the future, this is a worth-while read. [...] Readers will find the work easy to navigate, as Dr. Coyle cogently lays out her arguments and systematically and effectively uses evidence to back up her positions. [...] The book ends with a shorter section on what must be done to solve these problems, and that part disappoints. Readers are left wondering where the compelling force will come from to enact these needed changes to make the future sustainable. However, they will come away with a new framework for viewing the present and the future and begin to wonder how they can begin to do their part in making positive changes. And that, in the end, may be the force that will reshape our institutions and put our economy back on solid ground. "
Joan Wilson on LSE Blog wrote:
"Coyle is no eco-radical or closet anti-capitalist. She has no time for those who think we should cancel economic growth and maximise our happiness index instead. But she calls herself an 'enlightened economist', and sees our 'reckless disregard for the future' as unsustainable. [...] This book has weaknesses. The chapter on the legacy of climate change is uncertain. Her examination of how we are drawing down natural capital such as forests and soils is cursory. She has little to say about the developing world. And, though she says many problems in finance and bad governance have arisen from the extraordinary rise of digital technologies, she offers nothing about how future technological innovation might help. But the way she links the narratives of how we are ransacking our social, financial and ecological capital is truly scary. Western economies are only sustained by huge inflows of credit from poorer nations like China, and by drawing down natural capital and borrowing from the future. For her, capitalism is a brilliantly flexible tool for generating wealth and managing the complexity of modern life. But its recent fetish for a mythical free market has cut it loose from its roots of social legitimacy. Her insistence that the crisis is essentially one of trust and governance is important – and increasingly relevant as we watch our leaders failing to tame our reckless financial overlords."
Nancy F. Koehn on The New York Times wrote:
"As Coyle argues, it would be a fallacy to replace the goal of GDP growth with a quest for well-being, when, in periods of recession characterised by the absence of growth, unhappiness prevails. Additionally, revised empirical testing of the growth-happiness relationship has highlighted that the two are, in fact, positively linked. People in prosperous countries derive ever-more satisfaction from the breadth of choice and access to an array of intangible provisions (such as live music) and ‘weightless’ features (including design and quality) that economic growth enables them to have. What is more, at a time when government debt is at untenable levels in countries across Europe, we need productivity gains and technological advances to ensure that we can keep up the repayments on our liabilities. [...] Economic activity statistics need to account for changes in the stock of goods and services, for comprehensive wealth in the form of natural resources, and both human and social capital, as well as for advances in the quality of our purchases and our rising consumption of intangibles. Secondly, we need to reverse the decline in trust by restoring morality at the core of our institutions – including our markets, political organisations, households, and firms – and thus to regain 'the richly woven tapestry of shared values and the sense of virtue' that previously featured in Western societies (pp. 48). In harmony with this solution is the third suggestion, that establishments – especially political and governing groups responsible for managing our collective organisation – must realign themselves with the mass transformation of society led by huge advances in information and communications technology (ICT). [...] There is only one stone that the reader felt needed further turning in this intriguing book, and that is how we can ensure that individuals internalise their responsibility to bequeath equivalent welfare as we currently possess to future society. Or, to put it plainly, how can we entrust individuals to care for the future? Coyle devotes a whole chapter to addressing the notions of fairness and altruism, and, based on psychological, evolutionary and primatology-based research, concludes that these compassion-related traits are innate to our being. Despite this, a yearning for a greater grasp of how the global nature of society is affecting our concept of altruism and our concern for the future remains."
Roger Steare on Management Today wrote:
"Ms. Coyle rightfully points to markets’ importance in coordinating the complexity and variety of the global economy. But, she argues, markets are also inherently social institutions and thus vulnerable to prevailing norms. In the lead-up to the financial crisis, for example, collective greed in the financial sector spilled over into other industries as executives and government policy makers justified ever-larger pay and bonus packages. This, she says, corroded trust in business and government, increased economic inequality and ate away at the social fabric — present and future. So far, so good. But how, exactly, can we make markets moral? And toward which specific ends? On these questions, the book is largely silent. [...] We need both well-functioning markets and effective government, she says, and each category feeds on the other: markets work best when governments work well, and vice versa. Unfortunately, Ms. Coyle says, 'government failure has become a widespread reality.' [...] Ms. Coyle has written a thoughtful, sprawling work. I was impressed with both the magnitude of the subject matter and her keen grasp of it, but was also hungry for more attention to the role of the individual. What can each of us do, here and now, to be better stewards of our collective well-being and of that of our children and their children? Despite her silence on this question, Ms. Coyle has made an important contribution to the debate on the nature of global capitalism."
"The book has a shelf-appeal cover. The content, agenda and first chapter draw you in. You then begin to absorb Coyle's evidence, analysis and conclusions. There is much here that I both liked and agreed with. But there is also something incomplete about this manifesto. The economics of happiness, values and measurement are the first themes that hold promise. An increasing number of economists are calling for a complete re-assessment of how and why we measure GDP and its components. Coyle discusses these challenges in some depth and concedes, for example, that it is clearly fallacious that any economic model can assume that people always act out of rational self-interest. But she then appears to contradict this argument by saying that the mathematical models of the economist work because people 'will act in their own self-interest on the basis of the information available to them. There is nothing in this that runs counter to human nature - on the contrary, it's in the genes.' Unfortunately, for Coyle, the mounting scientific research being conducted by neuroscientists, evolutionary biologists and moral psychologists demonstrates that while humans can be individually selfish, the default nature for human beings is that we are in fact soft-wired to be empathic and altruistic. A second example that concerned me is the hypothesis that it is only 'institutions', defined by 'rules' that must drive this economic and social change. Coyle cites the Nobel Committee's note on the 2009 Economic Sciences prize to Elinor Ostrom and Oliver Williamson to support this view. However, there is no real challenge in the book to the hypothesis that human well-being must be founded on the governance of rules-based institutions. Again, the evidence being accumulated by social psychologists and anthropologists is that the best-functioning human forms of association are based on shared values, developed through social learning and decision-making. [...] I was hoping that Coyle would take this opportunity to deconstruct and rebuild our mainstream, but failing, economic philosophies, theories and models. The author does identify the opportunity to do just this when she notes the prosperity-without-growth school of Herman Daly and Tim Jackson, but then dismisses this prospect because it would be just too difficult to do. There's no review of ecological systems thinking. There's no exploration of the impact of growth on bio-diversity."
- Audio-only interview with Coyle on the book, at the Library of Economics and Liberty
Table of Contents of The Economics of Enough
Part One: Challenges
Part Two: Obstacles
Part Three: Manifesto
- The Manifesto of Enough
About Diane Coyle
Diane Coyle runs Enlightenment Economics, a consulting firm specializing in technology and globalization, and is the author of a number of books on economics, including The Soulful Science (Princeton), Sex, Drugs and Economics, and The Weightless World. A vice-chair of the BBC Trust and a visiting professor at the University of Manchester, she holds a PhD in economics from Harvard.