The Economy, Society Or The Environment – Which Is The Driver?

Many people don’t think enough about social and environmental effects on humanity. Sure, we all know about social inequality and climate change, and we do bits and pieces here and there. But we don’t do enough. At the back of our minds, we tend to think that economics will solve social and environmental problems. Because of this mental model, economic goals always trumps social and environmental goals. Many people see economics as the tug boat that pulls social wellbeing and environmental integrity along. Or let’s try another metaphor… economics is the climber that scales a mountain and tethers society and the environment along as it moves up. Do you agree? I don’t.

I believe that economics is contingent on a good society and environment. Economics is not the driver. Rather, I believe that social progress and environmental integrity is the platform and beachhead for economic development, instead of the other way around. To me, a progressive and stable society that does not cause harm to the natural world is ground zero for economic prosperity.
Take Finland or Sweden, for example – they have economic prosperity borne from social and environmental serenity.
Most countries are struggling with these priorities. Most governments pursue a mad dash for economic growth and use the income generated from the economy to fulfill social and environmental needs. Leaders of those countries look at countries that win the economic battle and see it as success stories. The problem with this is that climate degradation is a ticking time bomb and inequality destabilises society for decades. Most people think that if you attach a financial and economic model to a social or environmental problem, the business case will provide the solution. That is great – except that it competes with other business cases. While some social and environmental issues can be monetised, some complex ones will be difficult to monetise and won’t get the attention that is sorely needed. Don’t get me wrong – I am a proponent of impact investing. But most people see impact as subservient to investing. So, how we see the relationship between economic, social and environmental targets will determine how we put dimensions on our values. It’s time to flip our thinking on the relationship between the big three: the economy, society and the environment.

Do you think that the economic growth provides the resource for the other two?
Or does social wellbeing and environmental stability provide the fertile ground for economic prosperity? How we see the relationship will determine how well we solve the world’s problems.

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