Rethink Economics' inaugural collaborative panel was a turbulent event, and yet was thoroughly entertaining and thought-provoking. There was no other way that a first partnership between Warwick's largest and most prestigious ecnomics societies could have transpired.
Warwick Economics Summit turned out in force - both in our panelists, composed of the very best of the Press and Communications team, as well as in the audience. We joined together with our host, Rethink Economics, as well as the Warwick Economics Society and Women in Economics - each with two panelists at the front of the room. The full turnout in the audience created a great atmosphere to go with the stimulating discussions.
Each of the societies’ panelists made introductory speeches addressing the question ‘What makes good sustainable policy?’ in succession, before turning to 5 minute speeches considering unique questions they had been assigned. Our WES panel had the honour of opening with an inspiring statement reminding us that any policies enacted must consider social and economic parameters, such as cost-effectiveness, transparency, and accountability. That last point on accountability, by the way, allowed a sly reference to our last event, WES Presents Dame Moya Greene, who spoke passionately about the trials of modern corporate accountability - much to the delight of the WES crowd in the audience.
Warwick Economics Society asked the audience to consider the dangers of negative feedback loops, the need for stronger government intervention, and further argued more efficient allocation is required to solve the problem of climate change. Women in Economics followed, saying that a holistic approach must be taken, which positively affects the greatest possible number of stakeholders , and that sustainable policy must have four dimensions: sustainability, adaptivity, effectiveness, and durability. Finally, the home panellists of Rethink Economics told us that the climate crisis presents an opportunity to “kill two birds with one stone”: dealing with both environmental issues as well as social issues - namely that of inequality. A policy example given was that public transport should be free, so as to reduce inequality as well as emissions.
This sparked a lively debate, with Women in Economics asking how this free public transport would be funded. Funding, say Rethink, is no issue as the cost of not having this public transport is greater than its cost. A follow up question revealed that different definitions of ‘public’ were being used: Rethink taking ‘public’ to be publicly owned - the rest taking it to be any transport available to the general public, publicly or privately owned. Thus, a somewhat tangential, though thoroughly interesting, debate ensued about the merits of public versus publicly-owned transport. It goes without saying that those most in favour of publicly-owned transport were all Leamington Spa residents...
It’s main event time!
With introductions over, we moved onto the four main speeches. By popular vote, WES opened again: talking on ‘what makes a responsible consumer?’. The salient point here is information symmetry, or rather the lack of: consumers are overwhelmed with product choice, so it is often impossible to determine whether every product purchased is sustainable. The solution, then, is a fairtrade-style model, where products are labelled based on sustainability, so consumers can shop conscientiously. Additionally, greenwashing is an important issue: consumers can be pacified into thinking a firm is tackling its emissions, though in reality the firm changes little. Vigilance, then, is required on the part of consumers to ensure firms are accountable for a lack of change in sustainability policy, while the government must create internationally recognised robust reporting schemes and monitoring points for firms to report their progress.
For all the talk of consumers’ responsibility, an audience question brought our minds back to the 2005 BP ‘Beyond Petroleum’ advert, where BP placed the responsibility of tackling climate change onto the individual, and away from their own company. This blame shifting echoes casinos and betting agencies shifting responsibility onto so-called ‘addictive personalities’, or tobacco corporations funding ‘alternative’ research to downplay its harmful effects. The solution to this, says the WES panel, is PR fiascos and boycotts. Profits, the final goal of a firm, are affected by both, with the former leading to the latter - thus they go green to avoid these fiascos. This section was brought to a close by the economics society panel reminding us that consumers often have no other choice but to consume unsustainably: Gazprom, for example, retains a monopoly over natural gas for a lot of the world, so more must be done to enhance consumer choice.
Following on was the Warwick Economics Society talking about GDP’s usefulness as an economic measure. The answer here, of course, is ‘not very’. For examples of its failure, in 1965 female workforce participation was only around 50%, with participation mostly within a household. Around 25% of the adult population was not contributing to GDP, and yet was of course contributing to human society. Another measure is how poorly changes in quality are accounted for: an iPhone 12’s price is higher than an 11, with some of this price increase representing an increased quality, the rest being inflation. Hedonic regressions attempt to measure changes in quality, but for new products this is not possible. For example, for breakfast cereals, CPI (consumer price inflation) is out by roughly 25%.
Economics society’s answer to GDP’s failures is to use HDI as a better measure of growth - one which represents genuine progress. For example, the GDP per capita of Saudi Arabia is double that of Norway’s, but Norway’s HDI is significantly higher, so Norway is a better place to live for most people. The Gulf countries are all top 10 for GDP per capita, and yet are significantly further down on a ranking of HDI.
Moving on, Rethink asked us to consider what makes a good energy transition. The focus should be on the asymmetry between developed and developing countries. The former have the political and fiscal capacity to easily address challenges. This is partly due to their ease of access to credit, due to low risk of investments. Developing countries, meanwhile, do not have the political and economic capacity to easily transition due to higher risk levels, resulting in increased interest rates on loans. Thus, Rethink concluded their short, but sweet, speech by saying that an international environmental institution should be created for developing countries to borrow from rich countries at low interest rates, specifically serving to fund a cost effective energy transition.
By this point, we had run over the assigned time slot, due to the high engagement levels from the audience, and so Women in Economics graciously gave over their time to Rethink economics for further discussion of this intriguing discussion.
The most ambitious crossover event in history?
As you are able to tell from this semi-leviathan of an article, the combination of these four prestigious societies meant a huge amount of ground was covered over the four (or three, as time permitted!) different topics presented. Thought-provoking speeches were made, and even more thought-provoking questions were asked. Disagreements were had, and yet all discussion remained civil without arguments getting bogged down in minutiae.
Was this event a total success? No, of course not. The final topic for Women in Economics was not able to be covered without risking the event passing the three hour mark, and the introductions were lengthy and added little that was not already covered in the main speeches.
Was this event a success nonetheless? Yes. Keeping yours truly entertained for two hours enough to make detailed notes is not easy, as many an economics lecturer will have found out over my time at Warwick. And yet, here I am writing this article from the five-page-long series of notes I took: Rethink’s event entertained with ease. A stronger time structure in the future will hopefully see these crossover events become a staple of all four societies’ calendars long after the changing of the guard has taken place at the end of the year.
All that remains is to say thank you to Rethink Economics Warwick for hosting this event - to our esteemed moderator who deftly lended professionalism to the event, as well as the two Rethink panellists - and also, of course, to the enthusiastic and well-informed panellists of all the other societies attending. Here’s to the forthcoming second instalment of the newly inaugurated series of events in the new year!
Written by Max Vorster
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