/The Future Is Ours for the Taking

The Future Is Ours for the Taking

Photo: Michael Reynolds/EPA-EFE/Shutterstock

In New York City and around the world, millions of people took to the streets on Friday morning. A single demand unified them: Leaders must act, and act now, to stop climate change from getting any worse. “I want you to unite behind science. And then I want you to take real action. Thank you,” Greta Thunberg, the teen climate-change activist from Sweden, told Congress on Wednesday.

And a growing number of climate-change activists have coalesced around an answer to this imperative, a Green New Deal. The proposal, which would transition the U.S. economy to clean energy and create millions of new jobs, has become a rallying cry for organizations like the Sunrise Movement and left-wing Democrats like Representative Alexandria Ocasio-Cortez. Although Ocasio-Cortez helped popularize the Green New Deal, and so has her fellow congressional democratic socialist, Senator Bernie Sanders of Vermont, the basic concept is at least 12 years old. Not long after New York Times columnist Thomas Friedman called for a “Green New Deal” in 2007, a group of British academics and activists began drafting a substantive proposal that was published in July 2008.

Ann Pettifor, the director of policy research in macroeconomics and an honorary fellow at City, University of London, contributed to that early report. She’s also credited as one of the first economists to predict the financial crisis of 2008.

In her new book, The Case for the Green New Deal, Pettifor argues that the U.S. can, in fact, afford the Green New Deal — and far more easily than it can afford the consequences of unchecked climate change. She imagines a greener and more peaceful future. In a decarbonized economy, she writes, “we will do far more walking and cycling; we will not fly; we will give up meat and grow and consume local, seasonal, slow food. We will make and repair our own garments, rather than exploiting low-paid workers in far-off places.”

Photo: Simone Padovani/Awakening/Getty Images

This interview has been edited for clarity and shortened for length. The Case for the Green New Deal is forthcoming from Verso Books on October 8. 

Why do you think it has taken this long for the Green New Deal to catch fire in the public imagination?

For several reasons. Really, it takes an American, doesn’t it? I mean, when the Americans decide something is important, then it suddenly becomes important, and that’s fantastic. But I think what happened back in 2008 was that we were going through this grim financial crisis and London was at the heart of it already thanks to the City of London. We were writing [the British Green New Deal] after the date that I called Detonation Day — on the ninth of August 2007, when interbank lending froze and the system blew up.

Then in October 2008, with the collapse of Lehman Brothers, the whole thing becomes real for millions of people. Then it became quite hard to push the green story. The climate-breakdown story just wasn’t sexy at that point. Over the years, it has been picked up by various people; Jill Stein in the United States began to campaign on it. But on the whole it remained in the margins until Alexandria Ocasio-Cortez last year decided to make it part of her pitch. We owe everything to these Justice Democrats for lifting this issue way up into the stratosphere. It’s really been important, the role they play.

How would you say Ocasio-Cortez, the Justice Democrats, and the Sunrise Movement have changed the fight for a Green New Deal globally?

It’s quite extraordinary. Ocasio-Cortez was a David taking on Goliath, taking on Joe Crowley, one of the really big heavyweights in the Democratic Party. It was a huge achievement. And it was her profile that helped project the Green New Deal into the public domain. But it was also a steady, long, continuous process that’s being done by groups like the Sunrise Movement, going to Congress and standing outside Nancy Pelosi’s office at what I thought was just a pivotal moment.

You explain in your book that the U.K. version of the Green New Deal is a little different from the U.S. version. One way the two differ is that, as you put it, the U.K. plan emphasizes internationalism more. Tell me what you mean by that.

When I stress that we looked at it from an international perspective [in the U.K.], it was because we were looking at the financial system, and the financial system is globalized. It operates in the stratosphere. It operates out there beyond the reach of elected governments. And that’s important to us because we don’t believe it’s possible to finance the things we want without doing something about those guys out there who are effectively the masters of the universe. They’re why Alan Greenspan said back in the day that it doesn’t really matter who you elect president because actually the markets make all the decisions.

It’s those speculators and those testosterone-driven financiers in the markets who are effectively governing our economies. And so I think we stress that aspect of it because it affects those of us who are not Americans, who don’t have the world’s reserve currency at our disposal.

How would the Green New Deal ideally change the U.S.’s posture to the rest of the world?

That’s a really big question because one of the points I make in the book is that the dollar is all-powerful. We’ve dollarized the global economy, and that enables the United States, for example, to strut around the world, kicking people around, because the United States government and Americans have access to the world’s currency. This is a bit like being the banker in a game of Monopoly, and that privileges the United States.

In the past, Britain issued the world’s reserve currency. Sterling was the great imperial power and the great currency. We were defeated, and we had to concede that role to the United States. But it makes a very big difference to (a) the way in which an economy is managed and (b) the way people’s attitudes are when they are the beneficiaries of the world’s reserve currency.

I think it might also drive the United States away from the attitude of Trump, from being the world’s policemen, and turn the United States into a cooperator with the rest of the world. That’s what’s going to have to happen under the Green New Deal; we’re going to have to work together. And the United States is going to have to work with others in order for there not to be storms that rip up Florida and the East Coast. So I think it may make the United States more internationalist and a more cooperative state so we could create a stable ecosystem as well as a stable global economy. That would be very helpful. That was the role the United States played after the Second World War, and I would be very happy if they would play that role again as part of the Green New Deal.

Several white nationalists, in the U.S. and elsewhere, have expressed a form of ecofascism as justification for a mass shooting. Do you think a Green New Deal could be one solution to this nascent authoritarianism?

I think there are lots of reasons America has mass shooters. But to me, quite a lot of the insurgency we’re seeing in the United States and around the world is about the fact that people feel threatened. They’ve lost their jobs. And if they haven’t lost their jobs, they’ve lost income. Their children are finding it difficult to get a roof over their heads. Their kids can’t get to college. And even if they do get to college, it’s incredibly expensive, and they become incredibly indebted.

What the New Deal did, what Roosevelt did by creating jobs, by creating prosperity, by restoring, if you like, economic security to the American people, also engendered a more community-oriented society. It wasn’t necessary to go around killing people. It wasn’t necessary to resort to violence and authoritarianism. I think we’re getting this resort to violence and authoritarianism because people are asking to be protected from what they see as out-of-control markets. I’m hoping that the Green New Deal will offer that protection, that it will actually be much more economically just. We’ll get economic security because it will create millions of well-paying, highly skilled jobs. And that would restore equity in American society.

And perhaps it might become more difficult for strongmen to scapegoat immigrants.

Yes, the whole of the 1930s was about scapegoating Jews. But the 1930s was also about the gold standard and economic instability and economic insecurity and austerity and unemployment and low wages. Just a deep sense of anger and injustice. And as Karl Polanyi has argued, people were demanding to be protected from those out-of-control market forces. Authoritarian leaders blame immigrants and make things worse for themselves as well as for the economy. Europe turned toward strongmen. But Roosevelt and the Americans turned to democracy, turned toward an economy that was one in which the government was in the driving seat.

And that transformation, for me, is so huge. Roosevelt subordinated the interests of Wall Street to the interests of the American people. On the night of his inauguration, he began to dismantle the global financial system, which was governed by private authority, by Wall Street, and by the City of London. He said you are not going to decide the value of the dollar; the democratic government is going to decide. And by assigning the value of the dollar, we’re going to reset the prices farmers are paying for their goods and their products. In that way, we’re going to restore some stability to our economy and to our people.

How damaging has austerity been to the fight against climate change?

Well, that comes back to the story of what happened in 2007 and 2008. It was incredibly damaging, and it was intentionally so. What happened was, in 2007, you have a financial system that breaks down. Full stop. Where is the left? Where are the Democrats? Where is the Labour Party? Where are the socialists saying we know what can be done to fix it? There was silence. Obama was stunned. He didn’t really know what to do. He turned to bankers to solve the problem. In Britain, we turned to the City of London to help us fix the system. It was only too happy to do that: Let’s fix this system so we are even better off! We can become bigger and better than we were before the crisis! And the left was silent. That turned us toward austerity. It worsened inequality, it lowered wages across the world, and the rich got richer. The one percent couldn’t believe their luck. The banks were too big to fail, and they were far too big to jail.

So they come out of the crisis triumphant, and in that process, people were really pressed hard, really trodden down by austerity. Jobs were lost, wages were falling. Debt rose, and students became heavily indebted. What austerity did was make it harder to mobilize the left; it made it harder to mobilize ordinary young people. People were too bothered with getting by on a day-to-day basis, so big issues like the climate and, indeed, the economy were hardly raised.

I’m from an area of the U.S. that has depended heavily on coal mining for economic stability. The mining jobs are petering out, and they’re probably not going to come back. I can see how a Green New Deal would bring jobs back to the area, but it’s still such a tough sell sometimes. So I’m curious: What would a just transition look like in these communities, and how can we communicate about the Green New Deal in a persuasive way?

I think first of all we have to say a green transition has to be a labor-intensive transition. We have to substitute labor for oil, for coal. So whereas before we drove around in vehicles powered by fossil fuels, we’re not going to do that in the future. And what that means is we are going to do a lot more cycling, for a start. We’re going to have to find other ways of moving around that are not fossil-fuel dependent. For that to happen, I really believe we’re going to have to invent new forms of transport. We’re going to have to build a new kind of infrastructure, and it’s going to require an enormous amount of labor.

I think we’re going to find that without fossil fuels, without the cement and the steel and all of that, there’s going to be much more work for us to do. And that’s going to enrich coal communities. I’m convinced of that.

I think it’s going to be as if we were going to war. During the war here in Britain, we had to learn to be more self-sufficient in the way we operated. We had to grow our own food. We occupied the great aristocratic houses of Britain to turn them into hospitals and other community services. Those who survived the war were better off, and they found that they were healthier, that their diets were healthier, and that they had a stronger sense of community. After that, we got our National Health Service, and we got all kinds of institutions that helped societies come together. So I think there’s quite a lot of hope.

In the U.S., whenever people on the left propose a redistribution of resources, they’re greeted with the same question: How are you going to pay for that? It’s clear in your book that you think this is a disingenuous question, but can you briefly explain why?

First of all, the question of how do we pay for subsidies to Boeing is never a matter of debate in the U.S. Congress. Or subsidies to the military. How do we pay for that? We never talk about that. We assume rightly that the monetary system works with the fiscal system to finance the payments. But Medicare? Suddenly we have to ask how do we pay for it. As for how do you pay for the Green New Deal, the way we pay for it is not difficult.

The first source is credit. And as you know from the way you use your credit card, there’s no money in the bag when you spend on your credit. You haven’t put a bunch of savings into that account before you spend. Your credit card, for example, is a promise to pay. During the Second World War, the commercial banks were obliged in Britain to lend money to the government. They did, it was called Treasury deposit receipts, and it helped to finance government expenditure. But also the government used credit from the central banks — and in the United States, the Federal Reserve — to help finance its spending. I don’t believe in direct, on-its-face financing of government spending, but the government issues bonds and the Federal Reserve buys those bonds and by doing that it helps to keep interest rates low and helps to finance the government’s spending

The other source of financing is already-existing savings. So savings only exist as a consequence of investments. It’s like if I borrowed money to go to build a house: I build the house, I sell the house, I make a profit, and I move out of my house. And we know this world is actually awash with savings at the moment, mainly because too much credit has been issued rather recklessly. So we’ve got a lot of savings, and the government can draw on the world savings.

The Green New Deal will not use credit and savings for the purposes of speculation. They would be used for the purpose of creating jobs. And the wonderful thing about jobs and employment is that, as you and I know from our own experience, when you get a job, you go in at the beginning of the month and, at the end of the month, you get a paycheck. Jobs create income. But they don’t just create income for you. They generate tax revenues for governments as well.

I was chuffed when I saw that Bernie Sanders has got a 16 trillion-dollar plan. And when they asked him how we were going to pay for it, he said it would pay for itself over the next 15 years. What he means is they will raise 16 trillion dollars either by credit or via savings. The employees will get income and pay taxes, and that can be used to pay for the borrowing. In that sense, employment creation does pay for itself.

It’s very clear in your book that you believe there’s a need to take away the power we have vested in finance and markets and restore it to the people, to a political process. We’ve done that in the past, and it has been reversed. How do we do this in the future and make sure it’s permanent?

One way is to stop taking the Chicago School Kool-Aid, which argues that these guys are just brilliant entrepreneurs and they do it all themselves. That is just not the case. Private financing is heavily dependent on the public sector. And the thing they want most, for example, is government assets, and that is government debt. U.S. government debt is a wonderful, valuable asset. Why? Because it generates interest over time. Because this is very safe. Everybody knows the American public has never defaulted paying out its interest payments or repaying its debt. And why? Because the American people pay their taxes.

We pay our taxes, and that generates revenue for anyone who buys a U.S. government bond. They would not have that asset and that income without law-abiding taxpayers. We need to understand that private finance, Wall Street, depends on the public sector. But it also drains the public sector, if you like. We need to understand that we have that leverage and we could withhold that leverage. We could say, Sorry, but if you want to buy government debt, these are the terms and conditions. I want us to get more confident about understanding the way the system works and more confident that we don’t have to give away this valuable stuff that we’ve produced by being law-abiding, taxpaying citizens.