Norman Russel William: General Debate 
Norman Russel William: General Debate 
[Volume:654;Page:3170] 
Dr RUSSEL NORMAN (Co-Leader—Green) 
: 
 There are a number of immediate and important issues facing our country today such as the ridiculous Waterview Connection motorway project which will waste billions of dollars and the matter of Auckland governance. Today I will focus on some more positive long-term issues. 
Last week during the general debate my colleague Jeanette Fitzsimons laid out before this Parliament the world view of the Green Party with its aspiration of a more harmonious and prosperous future steering us away from the dangers humankind presently faces. It is my intention today to elaborate on the economic dimensions of our philosophy. We contend first that green economics is the only way to achieve that aspiration. In the 19th century the classical theories of Smith and Ricardo freed societies from feudalism through a self-regulatory free market that claimed to be optimally productive. The potent partnership of capitalism and technology generated unprecedented industrial development liberating us from some of the age-old scourges of disease pestilence and famine. Freedom of the individual and the market were central tenets though of course the experience of the industrial working class was one of struggling to achieve these freedoms. 
In the early 20th century neoclassical economics developed these notions further with theories of profit maximisations consumer rationality and market information. In the 1930s macroeconomic planning through public finance management reflected the new reach of modern technology and the globalisation of economic supply and demand. Responding to the Great Depression Keynesian theory emphasised the role of the public sector in stimulating growth through active fiscal management—a lesson we have recently had to relearn. Welfare of the individual and the responsibility of the State were central tenets of Keynesianism. 
By the late 20th century monetarist theory had reverted to the free-market principles and the use of interest and exchange rates independently managed by central banks as the means to wealth. But its weak regulatory frameworks led to excessive corporate speculation and irresponsible investment practice. Thus we face the serious global financial crisis of today. The invisible hand miraculously appears to be begging for help. 
Neither of these economic theories has paid due attention to the natural world. Traditional economic theory demands continuous material growth. The classical theory of capitalism and compound interest rates requires limitless growth yet the planet is finite. This fundamental illogic if allowed to proceed spells disaster for humanity. Yet traditional economics ensnared in its own tenets remains blind to this obvious truth about the finite world. Since the mid-1970s although GDP has continued to increase the general progress indicator which includes social and environmental measures has steadily declined. The global economy far from strengthening has experienced negative marginal utility. We would be foolhardy to continue along the same path yet we hear no cry for any change of direction from National or Labour. 
Ecological economics the theoretical basis of the Green Party’s economic policy introduces a remedial element that is essential to our 21st century survival and prosperity. Its central goal which is sustainability can be attained only when its three component factors—economic social and environmental—are met. It understands that society is a subset of the environment and that the economy is a subset of society. Ecological economics differs from traditional economics in four ways: it values nature not as an object of productive exploitation but for its intrinsic worth to humanity; it accords equal importance to the well-being of the next generation as well as our own; it acknowledges the irreversibility of environmental change from economic behaviour; and it recognises the uncertainty of environmental outcomes from economic inputs. 
Ecological economics thus adopts the uncertainty principle which requires that an economic development project will not proceed unless it is clear that irreversible environmental damage will not occur. Although the international community embraced this principle 20 years ago no New Zealand Government has properly implemented it into domestic law. The result is that irreversible damage continues to be done to our national environment and thus to our long-term economic potential. 
Traditional economics takes into account three components: land labour and investments. Ecological economics factors in the fourth: natural resources. By omitting the fourth classical and neoclassical economics fails the test of the current age. The Green New Deal offers a new way ahead. The Green Party is developing a set of economic policies involving fiscal and budgetary measures that are suitable for our time.