Opinionista James Blignaut 7 December 2020

The barefoot economist: Let’s put 2020 to bed and bring in a 2021 of restorative economics

Imagine a primary sector which, instead of mining resources, grows resources for both the current and future generations? A primary sector that uses resources as old as the mountains not for short-term gain, but for long-term societal wellbeing. Our future, individually and collectively, depends on it.

James Blignaut

James Blignaut is Professor extraordinaire attached to the School of Public Leadership, Stellenbosch University and honorary research associate attached to the South African Environmental Observation Network (SAEON). The views expressed are those of the author and do not necessarily reflect those of any of the institutions he might be associated with.

Every sunrise, every fresh puff of air carries with it the message: it is time, time for rest, time for respite – it is time for a break. It is like that moment when you realise that you MUST tell the tantrum-throwing screaming toddler that it is ENOUGH: 2020, it is bedtime. Neither do we desire nor need any punishment from you any further, unlock yourself from us. We are seeking a break, a holiday, from your mental, physical, financial and emotional chastisement.

We are tired of lockdown, tired of being bullied, tired of being told what we may or may not do, tired of being told what is in our best interest. Tired of computer algorithms deciding what we might like to see or do. Tired of the harassment received from the high and mighty. Tired of the plethora of fake news, deception, lies and conspiracies. Tired of being controlled. Tired of seeing our children being stripped of opportunities to do sport, play and engage with each other. Tired of staring into plates of hair-thin silicone pretending we care and are paying attention. We are tired of pretending all is cool while it surely isn’t. Tired of the e-abnormal.

This holiday, as we strip down to the bare minimum of essential beachwear, we also strip our minds of the marionette operator’s strings. Now the world belongs to the free-wandering barefoot people. 

Barefoot people who reflect about things we did well in the past, things we did badly, and then decide what we wish to do differently in future. We did sport well, very well actually. We excelled in group gatherings and mass events. We did okay with people and relationships, or at least in most cases; not every house and every country is a war zone. We failed abysmally in politics – so corrupt the system has become that politicians claim success in failure to the detriment of all. We failed economics and are not allowed a supplementary sitting – so skew the system is that those benefiting from it hardly noticed that there was an exam in 2020. We failed the environment – actually, we did not even pitch for the exam and received a no-show with ensuing tragic consequences. Now it is time to seriously reflect on this subject.

During my first year studying economics, and for my sins, taught some years later, I was told that there are four production factors driving the economy. They are labour, capital, entrepreneurship and natural resources.  

However, since it is difficult to deal with entrepreneurship and since natural resources are the subject of other than high-finance disciplines, we will assume those two as constants under the assumption, or rather curse, of ceteris paribus. Ceteris paribus is a Latin phrase meaning “all other things being equal”. Thus, the economy, especially post-World War 2 economics, can be rightfully called the era of ceteris paribus economics. An era that assumed, among other things, that there is no change in the quality and quantity of the natural resources and that it is therefore only labour and capital that matter to achieve a change in economic growth, welfare and prosperity.  

Economic models and policy advice were based, and to some extent still are, almost exclusively on this ill-fated doctrine which, either explicitly or implicitly, states it is only the change in labour and capital that matters in the search for Eldorado’s dream of perpetual growth and happiness. Not denying the importance of labour and capital at all, this ideology is ruinously reductionistic. An ideology to which both socialists/interventionists and free marketeers hold religiously.

There is thus no denying that we would like to have our sport back, that we need to unlock the political system from the current reality while sending the corrupt to do some serious time of social distancing in lockdown mode, and that we need to foster an economy in which everyone has the opportunity to participate.

Telling it barefoot as it is: while all these items of change and many more on the wish list are essential, they all depend on the revitalisation, or better still regeneration, of life in both South Africa’s and the globe’s natural ecosystems – and that life starts in the soil. That which was treated as constant, the seemingly infinite never-changing source of welfare, a pot of gold from which wealth and livelihoods could be plugged at will with no effect, became the limiting factor to development – the resource in last resort.

Needless to say, with agriculture and mining such large landholders and managers of natural resources, these two sectors have an enormous responsibility, but also opportunity to repurpose themselves from being extractive industries to investors in natural resources.

Imagine a primary sector which, instead of mining resources, grows resources for both the current and future generations? A primary sector that uses resources as old as the mountains not for short-term gain, but for long-term – think eternally long – societal wellbeing. To this the entire society can and should contribute and participate. Our future, individually and collectively, depends on it. And it is less far-fetched than it would seem.

The International Accounting Standards Board, in its 2018 revision of the conceptual framework for financial reporting, revised the definition of an asset. This definition now reads: “An asset is a present economic resource controlled by the entity as a result of past events, with an economic resource as a right that has the potential to produce economic benefits.”

That implies that an investment in enhancing the economic value of a resource by having the potential to produce economic benefits is an investment in an asset. That is what the rehabilitation, regeneration and restoration of natural resources is and does in both the primary sectors. These sectors should purposefully seek to recover and heal degraded landscapes, invest in the soils and natural assets, or more appropriately, natural capital and enhance their balance sheets.

Changing the mentality from being extractive towards being restorative, the primary sectors can unlock a much-needed change in the development narrative towards healing and resilience, and society would do well to invest in the scarce resources whose life-preserving values are infinite. DM

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