Has Rachel Reeves misread Elinor Ostrom’s contribution to green economics?
Rachel Reeves, assuming that Labour win the next General Election as current opinion polls indicate, is likely to be Keir Starmer’s Chancellor of the Exchequer. Britain’s finances are in a mess after years of Tory misrule and she is likely to inherit a difficult situation. If things go to plan, she will be the first woman to take the role. In the notoriously sexist worlds of finance and economics she is keen to shore up her position. Prudence is her watch word, while we might call it austerity, she is keen to show she will borrow as little as possible to keep the world of finance on her side.
She is also aware that women’s contributions must be celebrated. It was as late as 2009 that a woman, Elinor Ostrom, won a Nobel Prize in economics, and only two women have won the award since. Elinor Ostrom faced a steep climb to victory because of her gender. She was prevented from studying higher mathematics at school apparently being told, what use will ‘trigonometry’ be when you are ‘barefoot and pregnant in the kitchen’. Having been deprived of mathematics, this stopped her studying economics at university. She instead took a PhD in political economy, and battled away, in the processes creating a body of work that focussed on ecological matters and revolutionising many of the foundational assumptions of economics.
Reeves, most famous for her hardline approach to benefit claimants, has written the recently published ‘The Women Who Made Modern Economics’. The British Keynesian economist Joan Robinson – who was enthusiastic about Mao – is treated by Reeves with some caution. Rose Friedman elicits more enthusiasm as the mother of monetarism, the economic philosophy that inspired Mrs Thatcher.
Ostrom is provided with a chapter, and it is, overall, an accurate portrait of her work. But is it possible that Rachel Reeves misses what is most important about Ostrom’s work for an incoming government, especially one that claims to be concerned with climate change. Reeves wishes to be the ‘first green Chancellor of the Exchequer’ (page 143), a task which would be impossible without reference to Ostrom.
Ostrom argued that ecology was the foundation of economics, in the simple sense, that if people destroy their environment, they tend to destroy their livelihood too. She wrote extensively about climate change too. Her key contribution was challenging the so-called ‘Tragedy of the Commons’. This is the idea that people inevitably tend to destroy forests, fields, fisheries and other natural resources, if they are owned collectively. The farmers will over farm and degrade the commons, because no one farmer owns the commons privately, and we abuse what we do not own in this way. Garrett Hardin, who wrote The Tragedy of the Commons’ argued that privatisation or strong authoritarian control, a kind of ecofascism, was necessary to prevent the environment being destroyed.
In a chapter entitled ‘Elinor Ostrom and the political economy of the environment’, Reeves briefly but persuasively outlines how Ostrom showed that people could cooperate on a local level to protect commons. Other key ideas from Ostrom are outlined and some thoughtful criticism is made.
However, one element is largely missing or at least not developed, the question of ‘trust’. Ostrom argued that trust is essential. While it is mentioned by Reeves, it is largely unexplored.
“Trust is the most important resource. If a community has been forbidden from managing it’s resources for a long time, the main obstacle to overcome is the lack of trust and the effort to get organized in the first place. It’s not a trivial matter,” noted Ostrom.
To solve or at least reduce the impact of any environmental problem, trust is necessary. Take climate change: it will involve sacrifices and change in lifestyle. As such one problem is a potential free rider effect. If we use less energy, maybe cutting flights, maybe others will simply use more, so what is the point?
More than this the fossil fuel lobby and shadowy right wing think tanks will try as hard as possible to build distrust of environmental policies. If you whip up rumours and weaponise distrust you can derail heat pumps, renewables and all that is needed to break fossil fuel addiction.
From anti-vaxers to ULEZ opposition, we live in a society where distrust of governments can quickly accelerate into hard opposition. Go on social media and you will see shrill voices condemning climate change action as an excuse for social control by the World Economic Forum, and dismissing covid as a ‘plandemic’.
Ostrom’s academic work can be seen as focusing on how trust can be built to overcome the free rider problem to create effective ecological solutions. That Reeves is taking Ostrom seriously is important. But trust, especially for Labour is a problem, without trust, it will be difficult to introduce climate change policies that work.
Yet trust seems a missing word, Keir Starmer was elected as Labour leader on a soft Corbynite programme, with 10 relatively radical demands. All were dropped and he has enthusiastically purged Labour of his opponents. He now claims to be sympathetic to Thatcher. You can see the problem, a cynical public may soon turn against a Labour government, and inevitably our hard right wing press will use environmental policy as a way of boosting the Tories or parties further to the right.
Elinor Ostrom can be criticised in various ways, for example, her work focussed more on local resource management than global environmental problems. However, stressing that environmental problems from conserving the local commons to building global agreements on climate action, can only be solved on the basis of trust and cooperation, is her key insight. Is this a key insight for Rachel Reeves too? Time will tell. But on the basis of Labour’s recent trajectory, one suspects not.
Derek Wall teaches political economy at Goldsmiths and is a former Principal Speaker for the Green Party of England and Wales. He wrote ‘Elinor Ostrom’s Rules for Radicals’ published by Pluto.
Image credit: World Economic Forum – Creative Commons