What exactly is the Green New Deal?

Michael Jacobs - Professorial Fellow and Head of Engagement and Impact, SPERI

In doing this, the resolution aims to create ‘millions’ of jobs. But not just any old jobs: they must be ‘high-quality union jobs that pay prevailing wages’, and the economic change required must be managed through a ‘fair and just transition for all communities and workers’.  

So far, so ‘green Keynesian’. Drawing on the tradition of President Franklin D Roosevelt’s original New Deal in the 1930s (though not its racially discriminatory character), the GND looks at first sight like a massive public spending and investment programme designed to meet the twin goals of environmental improvement and employment growth.

However, a deeper look at the congressional resolution reveals that the Green New Deal is in fact much more than this. Included amongst its provisions are commitments to a state-subsidised job guarantee for all Americans ‘with a family-sustaining wage, adequate family and medical leave, paid vacations and retirement security’, the strengthening and protecting the rights of workers to ‘organize, unionize and collectively bargain’ and – just in case these weren’t enough – to ‘providing all people of the United states with high-quality health care; affordable, safe and adequate housing; economic security; and clean water, clean air, healthy and affordable food, and access to nature’.  In doing this, it will ‘promote justice and equity by stopping current, preventing future and repairing historic oppression of indigenous peoples, communities of colour, migrant communities, deindustrialized communities, depopulated rural communities, the poor, low-income workers, the elderly, the unhoused, people with disabilities and youth’.   

In other words, the Green New Deal’s ultimate ambitions go well beyond a green investment programme. They instead approach the transformation of the American economy and society.

This has inevitably led to a backlash. On the one hand, the breadth of the GND’s policy goals has led some Democrats who are otherwise supportive to call for a more politically manageable narrowing of its focus. On the other, its rapid decarbonisation targets have been criticised for being infeasible and the costs unaffordable. A highly organised ‘Anti-Green New Deal’ coalition of fossil fuel industries, their trade unions, financial backers and congressional supporters has been organised to block any progress. In an ominous sign, the powerful AFL-CIO trade union confederation has come out against it. 

So on this reading, the GND might just be a bit of youthful left-wing exuberance, which will eventually run out of steam in a swamp of congressional obstruction. At best, it might emerge as an emaciated piece of climate policy under the next Democrat president – if there is one.  

A new economic paradigm?

But this is not the only possible reading. At another level, the GND constitutes a critical symbol for a new kind of political economy in industrialised countries.

Over recent years, it has become increasingly obvious that many advanced economies are in trouble. Since the financial crisis in 2008, average living standards have stagnated, inequalities have grown, productivity and investment has stalled and environmental breakdown has accelerated. Orthodox economic policy appears unable to cope, or to offer solutions. In this context, many authoritative voices are now arguing  that industrialised economies are in need of fundamental economic reform. The neoliberal orthodoxies of the past, it is argued, are no longer fit for purpose; and consequently a ‘paradigm shift’ in economic policy and discourse is now required.

This argument, or something like it, is increasingly being made by  economists and economic institutions; alongside think tanks, media outlets and academic funders. However,  the ‘new paradigm’ has been hard to pin down. Its aims appear too numerous and its policy prescriptions too diverse. It has no name. It has been impossible to campaign on.

Enter the Green New Deal. With a single label, the GND brings together three key goals of the new paradigm, a vital political economy principle – and a clearly communicable demand.

The first goal is rapid decarbonisation. The GND is the first significant political response to last year’s report of the Intergovernmental Panel on Climate Change (IPCC) which showed that a much faster reduction of greenhouse gas emissions is required if global warming is to be held to the 1.5 degree limit specified by the Paris climate change agreement. The IPCC report led to a widespread acknowledgement that ‘something must be done’; but no government has yet come up with a policy agenda equal to the task. The GND does.  

Second, the GND makes a critical point about employment. By insisting not just on the creation of jobs, but of well-paid, unionised jobs and the rights of workers to organise around them, the GND focuses in on the huge weakness of orthodox economic policy and discourse. Lousy jobs paying low wages in insecure conditions do not make people better off.

Third, the GND’s insistence that economic policy must benefit disadvantaged communities, particularly those of race and geography, marks it out from the traditional discourse of environmentalism. It is deliberately designed to bring together these formerly estranged political constituencies. 

The political economy principle concerns the role of the state in economic policy. In the country where support for government intervention is usually weakest, the GND boldly insists that the state must motivate, guide and significantly contribute financially to the investment needed.

In putting all this together into a single narrative with a memorable name, the Green New Deal represents the very definition of a new and radical economic policy approach. It aims to tell a story about the kind of economy we need. By offering the public something concrete, nameable and communicable, it demonstrates and embodies an alternative to current economic orthodoxy.

In this sense, we can understand the Green New Deal at a third level. It is a strategic intervention in the struggle to shift the consensus of economic policy. By acting as the vanguard of a new political and economic paradigm, the GND is designed to crystallise and illustrate the argument for change. That’s why the job guarantee, and the promise of universal health care and housing, have been included in the mix. There is a deeper agenda here, to which the GND is intended to be an entry point, but not the end. As the Democrats gear up to elect their presidential candidate for 2020, the near-universal adoption of the GND by the leading contenders is a potent sign that something radical is stirring in American politics.