Last week, amid the turmoil caused by the greatest financial crisis since the Great Depression, the government quietly announced that it would approve the expansion of Stansted, paving the way for an extra ten million passengers a year to pass through the airport.
This is to be in addition to, not instead of, the third runway planned for Heathrow. Policymakers, it seems, see no connection between these two things – or, if they do, it is that our current economic problems demonstrate the need to make decisions which will facilitate long-term economic growth.
I see things slightly differently. Immediate action needs to be taken to stave off the worst effects of the financial crisis. The system, in the short-term, needs patching up. But when it comes to the long-term question of how to re-design our economic and financial systems, it seems to me that the time has come for a fundamental re-think.
The financial system in a market economy exists, on a fundamental level, to allocate capital efficiently, and thus to promote economic growth. Growth is often seen to be an end in itself and assumed to automatically lead to greater human happiness.
This, to me, is a highly questionable assumption in Western countries which are by far the wealthiest in the history of the world, but are plagued by anti-social behaviour, crime, obesity, and drug and alcohol addiction. The time has come to emancipate ourselves from the slavish worship of the false god that is economic growth. When the world comes to reconstruct the foundations of our economic system in the wake of this crisis, concern for economic equity and environmental sustainability should be just as, if not more, prominent in the minds of our leaders as economic growth.
None of this is to suggest that economic growth is in itself a bad thing. It has done wonders in recent years to lift hundreds of millions of people out of poverty in China, India and South Asia. Growth in the developing world is as important as ever. But in fabulously wealthy western economies, continued economic growth is not producing happiness. And, as the Stern Review showed, it is leading us into the greatest market failure ever – climate change.
So, my response to the financial crisis? Chuck zillions of quid at it, obviously – but stop the expansion of our airports, too, and build a few more train lines instead.
