Where is finance in sustainability science?

By Andris Suvajevs

Sustainability science is in many ways the new kid on the block. It is trendy and exciting because almost anything can be lumped under it and yet it is also frustrating as the over-burdening presence of topics tends to produce meaningful absences. In this field, there has essentially been an academic double-movement and a flourishing of debate between geographers and sociologists, urban planners and anthropologists, political scientists and physicists whereby one side brings its expertise on all matters ‘social’ and the other lays out its prerogative on the ‘physical’ or the ‘biological’. As a result, almost anyone can be seen as a sustainability scientist if they share an interest in a ‘sustainable’ world. If for the casual observer the entire field appears as one big mess, then this is not entirely without foundation, but I would argue that it is a productive mess and certainly a potential source of new research and scientific paradigms. As some anthropologists have noted, new ideas and ground-breaking developments occur on the boundaries and the intercultural zones of life where various life experiences mix and merge. For this reason, there is much hope to be placed in these kinds of intellectual developments.

Finance and Capital

Having said this though, it seems rather peculiar to me that sustainability scientists have not meaningfully engaged the issue of finance and money. If the field is indeed open to any subject matters and aims at being transformative (which in my view is just a nice way of saying or refraining from saying ‘revolutionary’), then I cannot imagine a more pressing issue than the state of financial affairs and the deepening polarisation between creditors and debtors on a national as well as international scale. If sustainability scientists are unable to comment and provide theoretical musings on issues like tax evasion, debt deflation, asset-price inflation, austerity, and so on, then I venture to say that the field’s capacity to influence the political game of the day will remain rather limited. The financial oligarchy of investors, real estate magnates, banksters, corporate lawyers, comprising the One Percent, hold the hard power in the contemporary political-scape and are in fact the real culprits of many of the issues that worry sustainability scientists. The complete devastation of natural resources, production of polluting energy sources, erosion of community values and the rationality of the private sector encroaching upon domains whose last concern in the world should be profitability are effects of the kind of politics promoted by a particular group of people. If these links between the financial sector and its puppets, and the accelerating destruction of nature are not properly spelled out and theorised, then the entire edifice of sustainability science appears weak and fledgling. This is not to say that every researcher in the field should start writing only about finance and capital, but rather that references to it and commonly developed theories about it should become the norm.

Thus, in my own research on social entrepreneurship these issues are implicit but all-too central. For the past couple of years, the government of Latvia has led a concerted effort to shift issues of public concern toward the private sector, much like in the rest of the world. The livelihoods of people that are clearly at a disadvantage in the labour market are now all of a sudden the responsibility of private citizens rather than the government which they elect. The agency and power of the private sector is bolstered but only with the purpose of minimising public budget costs, so that the government can pay off its external debt to bondholders and banks. The opportunity to employ sightless people in a project like the one I’m researching is wonderful but there is context to it, one which is easily overlooked.

Diverse Economies

Curiously enough, for the past two decades, there has been a concerted effort to lay down fresh and novel basis for theories of the economy which intuitively should be the most fruitful ground for thinking about finance and money. This movement spearheaded by economic geographers J.K. Gibson-Graham has tended to elicit the extreme diversity of economic projects across the world and analyse the particular ways in which these projects are similar to and different from the dominant capitalist form of production. The broader aim has been to, first, dislodge the binary view of capitalism and not-capitalism moving away from such structuralist traps. Secondly, this approach has also tended to give more value to the role of the researcher and the way his/her analysis of the economy contributes to and shapes this same economy. In this sense, the researcher performs the economy. (See also Katherine Gibson’s masterclass in Wageningen).

While this line of argument has certainly been stimulating, it has had almost nothing to say about money and finance which strangely enough replicates the shortcomings of neoclassical economics. Apart from mentioning the existence of alternative currencies, the diverse economy seems to take place without any money. Furthermore, the distinction between money and currencies is never really acknowledged as well. In fact, the banality of the neoclassical turn lurks even in the literature that does aim to bring together finance and sustainability. Here, finance is still seen as the kind of sector that directs funds to various industries, thus the analyses fall victim to bankers’  own self-understanding when in reality the modern financiers are simply sucking the money out of the economy. While there might be references to entities like cooperative banks or local exchange trading systems, money itself has not been the focal point in these descriptions. This manner of thought so far rather conveniently avoids the fact that most of the economic projects it celebrates still ultimately depend on dollars, euro-dollars or yen-dollars. There hasn’t been a problematization of the difference between public and private money and what the implications of banking policy are for the ordinary people engaged in commercial activity. It has little to say about the fact that most of the taxation policy in the world is skewed overwhelmingly in favour of the Finance, Insurance and Real Estate (FIRE) sectors which simultaneously takes an enormously heavy toll on labour and other productive factors. It has not seriously engaged with the question of interest-bearing debt nor on the existence of securities, commercial paper and other such assets which currently make the world go round. Through its focus and political emphasis on highlighting the agency of various people on a fairly small-scale, it risks overlooking the broader context in which these activities happen. Quite simply – is the US dollar an enabling or a constraining factor in the diverse economy? What kind of change of direction or innovation is happening if the power of banks is never challenged even on a theoretical level? It seems to me that these need to be the next areas of interest for scholars drawing connections between their fields.

Finally, there is every reason to believe that the financial sector is equally diverse and home to practices that are not necessarily capitalist even though its predatory character does not give much hope for such a belief. Myself, I cannot quite square the co-existence of a sustainable economic paradigm with a class of people legally parasiting upon the labour of others. It is therefore necessary to understand its nuances, the subtle ways in which it infiltrates the dynamics of interaction and to see opportunities in its institutional structure that may be amenable to change.