The other costs of living
The cost of living is high on the news agenda at the moment. And rightly so. Too many people are having to make choices - such as between heating and eating - which should have been consigned to the history books when we left the Victorian age.
“The cost of living”, however, makes me think not just of how much money you need to live a dignified life, it also reminds me of the social costs that inequality imposes on our society and of the environmental cost that we as humans are inflicting on the planet.
These social and environmental costs are clearly too high. There is now almost universal acceptance of this - in other words, our economic system is not working in the way it should. What, though, is the alternative? Where can we find the ideas that can help us envisage what a better economy looks like?
As we have been looking for answers to this question at On Purpose, we have been taking inspiration from how so-called healthy systems behave.
By observing systems that manage to thrive for long periods of time, scientists have been able to crystallise a set of common characteristics of how such healthy systems behave. Specifically, healthy systems…
- Circulate universally
- Self-regulate proactively
- Regenerate constantly
At On Purpose, we normally apply our understanding of healthy systems to how we can help generate an economy that avoids the long-term social and environmental costs such as inequality, the climate crisis and mass extinction of life. But I became curious about how an understanding of healthy systems could also help us navigate the other, front-of-mind cost of living crisis. How are people going to be able to pay their energy bills and have enough to eat this winter? What should Jeremy Hunt be doing, if he knew more about how healthy systems behave? What would the Autumn Statement have looked like, if it was informed by an understanding of healthy systems?
Healthy systems ensure universal circulation of resources, energy, money, power and whatever else the system needs to be healthy. A simple example of this is how our human bodies ensure that every single one of our 37 trillion human cells has its own supply of blood. The body doesn’t go for the let’s-supply-the-biggest-20%-of-cells-only-and-assume-the-rest-will-trickle-down approach; it goes to great lengths to build an incredibly intricate network of veins and arteries that ensure universal circulation.
In society, initiatives that align with this approach are already used in some places. Increasing the level of minimum pay and capping salary differentials is one. The widely trialed concept of Universal Basic Income is another.
Looking at the cost of living crisis through this lens, capping energy prices will clearly help maintain circulation of energy, although it won’t be enough to ensure access for the most vulnerable. Raising benefits by 10% and increasing the National Living Wage, as proposed in the Autumn Statement, are also welcome steps, but overall they at best maintain rather than improve the situation we’re in and the situation has been deteriorating for over a decade. We can see this by the fact that as the needs become greater, the solutions we’re turning to are becoming ever more basic. As we don’t seem able to circulate money in a way that allows everyone to access what they need, we are resorting to circulating food or even heat directly. We have, to our shame, lived for years with food banks and free school meals and now we have “warm banks'' springing up as well.
As an emergency response, this is the right thing to do, but such initiatives must be just that: a temporary emergency response that is necessary but not enough. Until we can have an economy that naturally circulates what everyone needs in the first place, we are simply taking pain-killers that dull the pain rather than dealing with the underlying illness of the economic system we are part of.
Healthy systems also regulate themselves automatically. Quite how they do this we don’t fully understand but we know that every human cell in your body behaves in such a way so as to keep the whole body healthy. When cells don’t do this and, for example, maximise their own growth, we have a name for the dysregulation that occurs. It’s called cancer.
As a society we regulate ourselves in different ways. Laws are one powerful tool with which to do this, taxes are another. Fascinatingly, some unusual suspects are starting to call for greater taxation. The CEO of Shell recently suggested that companies like his should be taxed more. Similarly, the group of Patriotic Millionaires, also think they should be made to pay more taxes. In this light, the tax increase in the Autumn Statement is not a bad thing. What taxes are set, who they affect and how they help or hinder circulation is, however, the key question.
Beyond taxation, imagine if the government had legislated to substantially improve housing insulation ten years ago. A renewed emphasis on this in the Autumn Statement is welcome, but too many years have been wasted. Similarly, imagine if, like in France, we required public buildings such as car parks to generate solar energy. Regulation that regenerates our capacity to thrive in the future is crucial and all-too-often sidelined.
Self-regulation at the organisational level must also be encouraged. Many food retailers are reducing their food waste by partnering with organisations like Olio and Too Good To Go that redistribute their food cheaply or for free (which also contributes to circulation). Business Declares and the Real Living Wage are more self-regulating initiatives that we at On Purpose are proud to be part of.
Regulation isn’t simply red tape or bureaucracy that must be minimised. It is a versatile tool with which we can shape and improve the health of our economy.
We know healthy systems constantly renew themselves. You might think that you feel comfy in your own skin, like you’ve been living in it since you were born. But in actual fact, the skin you have today is completely different from the skin you had just over a month ago. Even bone cells are replaced every 10 years. Your body is constantly investing in renewing itself, so that it will still be able to do in 10 years time what it can do today and maybe learn a few new things along the way as well!
In society, typical regenerative activities range from providing high-quality education for the next generation to investing in modern transport infrastructure and, of course, the production of renewable energy.
When we look at regeneration in the context of the Autumn Statement, the real-terms cut in capital expenditure, starting from a low base in the first place, makes this kind of regenerative renewal incredibly difficult.
The Chancellor appears to be trying to avoid a second wave of austerity by increasing departmental spending slightly from 2025 onwards. Before that happens though, the decline in real spending will further weaken public services that are already fragile after a decade of severe austerity between 2010 and 2020. Saving these ailing services will be ever more difficult the longer we delay the kind of significant regenerative investment they need.
We can compare what Jeremy Hunt announced with what healthy systems do. But until Jeremy Hunt and everyone in politics thinks about the economy as a system that needs to be healthy, real change is not going to happen. It is a mindset shift that we as a society as a whole need to go through.
Lastly, much as we need to weather this coming winter, we also need to keep coming back to those other costs our lives create - on those less fortunate than ourselves and on the planet we call home. We can apply the same ideas here too: How can we circulate what we have so that every person in this world can live a dignified life? How do we regulate ourselves to live within the limits of what the planet can regenerate? What do we need to be regenerating right now, so that we will still have a future in centuries to come? Most importantly, what needs to happen inside each one of us so that we collectively start thinking differently about how to nurture our economy back to being a healthy system?