The circular economy: an answer to the hourglass economy?
As a sustainability professional, I am immersed in many aspects of sustainability. But even if you are someone who doesn't, the phrase that is being heard all too often right now is "the rich get richer and the poor get poorer."
Some economists call it the ‘hourglass economy’ – the growing number of people at the high and low ends of the income spectrum, and fewer in the middle.
The persistent growth of social inequality is the most conspicuous and defining characteristic of contemporary western society. This growth moreover, represents a deep social crisis to which the financial elite, driven by the growth of wealth, can offer very little solution. The gap between middle-income earners and peon-income workers will widen, so fading the prospect of social mobility all the more.
But there is a growing realisation and understanding that the consequences of mankind’s success cannot be left unchecked, for the very simple reason that it will ultimately impact severely on everyone’s ability to prosper, regardless of where we sit in the hourglass, be that the top, bottom or the squeezed middle.
According to a study backed by the United Nations, the cost to the global economy of the damage done to the natural world by humans is between $2tn-$4.5tn a year, and society bears the consequences. The unchecked capitalism of the past decades has created environmental crises around the globe, including climate change, excess mining of natural resources, widespread pollution and food and water shortage, all of which reprocesses on wider society at all levels, but especially at the bottom of the hourglass. So, is there an answer?
Sustainable economic growth is the ultimate goal that all politicians, economists, and business leaders have been chasing for decades, building an economy that meets societal needs without harming the planet.
But big changes are necessary to reach this. Some are pretty clear, like limits on natural resources and waste emissions to protect the environment. But others are less apparent, such as limits on income inequality to improve societal health, which just won’t sit comfortably with some people, understandably. This is why the Circular Economy is one of the most significant economic trajectories that many have been hoping for.
Most business operations work to a “take, make, dispose” linear model instead of a circular one. But changing to the circular, sustainable economy will – if everyone, companies and the wider public alike – see the economy not as the goal per se, but as a means to contribute to our planet and its people. This is a notion that we have somehow lost over the last few decades, but change is afoot. However, the transition will require coordinated leadership from government, business and society at large. More and more businesses, new economy and old, are embracing the sustainable agenda, if anything having been compelled to do so by the Paris Agreement and if, for nothing else, knowing that the economic cost of inaction is just too significant.
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