Growth & Transformation

Why we need a Great Turnaround of our current economies

Making the great turnaround work

Study

This publication aims at contributing to the emergence of a transformative economic thinking, integrating environmental, social, and economic dimensions, after the wreckage of neoliberal economic thought that clearly has reached its date of expiry. It is the product of a collaboration of the Heinrich-Böll-Stiftung, the ZOE Institute for Future-Fit Economies, and Finanzwende Recherche.

What the module is about

Progressive voices in economic policy have recently begun to be heard again. In the EU and the US they have helped to steer recovery programmes towards both stabilising the economy and addressing environmental and social challenges. In both cases, the specific policy mix is partly driven by economic preferences, and partly by peculiarities of political economy and legal framework.

However, it remains unclear whether the current strategies can succeed. After all, both the US strategy (“Bidenomics”: high government investment, regulation) and the EU strategy (EU Green Deal: carbon pricing, moderate investment, regulation) leave important interactions and tensions between instruments and objectives underexposed. It is therefore uncertain whether the existing policy mix is sufficient to decarbonise the economy fast enough and at the same time ensure a just transition and long-term macroeconomic stabilisation. A failure of these agendas would have far-reaching consequences.

Goals of the project

The initiative “the great turnaround: How to stabilise the economy, reduce inequality and get to net zero at the same time” seeks to contribute to ensuring that the transformation is successful and proactively respond to the danger of populist counter-movements. To this end, it aims to bring together the different perspectives of international economic experts and derive the cornerstones of a transformative economic agenda that is able to achieve the “great turnaround”: a transformation of today’s capitalism with a triple dividend of massively reduced emissions and environmental impacts, a more equal distribution of wealth and income, and more resilient, stable economies and societies.

Process

Around 30 leading economists from both sides of the Atlantic, among them, Michael Jacobs, JW Mason, Daniela Gabor, Carolyn Sissoko, Jean Pisani-Ferry, Maja Göpel and Antonio Andreoni, came together for three roundtables in November and December 2021. The Zoe Institute for future-fit economies took the lead in the conception and Adam Tooze was the co-host and moderator. Together with the participants, we aimed to derive the cornerstones of a transformative economic agenda that is able to achieve the “great turnaround” and was centred on three themes:

1. Effective policy mixes to accelerate the green transformation
2. Designing policy pathways for a just transition
3. The macroeconomics of a green transformation that leaves no one behind

Altogether the discussions were very fruitful and exactly what the roundtables produced exactly the results that we had hoped for. Adam Tooze was equally enthusiastic so we decided to continue the roundtables on a monthly basis in 2022. Focusing on different topics within the ‘Political Economy of the Green Transition’ the group of participants group has ever since consistently expanded.

The outcome

Building on the discussions in the different workshops and their expertise some participants prepared extended abstracts on a relevant subtheme that were presented and discussed. Building on the received feedback the authors then wrote full articles that were published in a joint booklet and online dossier called “Making the great turnaround work. Economic policy for a green and just transition” by Heinrich-Böll-Stiftung, Finanzwende Recherche and the Zoe Institute. Adam Tooze, Jonathan Barth and Jakob Hafele (Zoe Institute) contributed the lead article that serves as an excellent summary of the roundtable results, explaining elements of transformative economic policies and placing it against the current context of the war in Ukraine. The publication was therefore served as a very good preparationory work for the Transformative Responses conference in May 2022, in which many discussions of the contents were taken up. .

The project is hosted by Heinrich Böll Foundation, Finanzwende Recherche and ZOE-Institute for Future-fit Economies.