Governing For Sustainability Value: From Strong Government to Deliberative Multistakeholderism

Guest editorial by Professor Fred Gale, Professor & Head of Discipline of Politics and International Relations, School of Social Sciences, University of Tasmania

In this article Professor Fred Gale from the University of Tasmania argues that our current institutions of government are unable to deliver Sustainability because they are tied to narrow economic thinking about value creation. He explains why we need to build institutionalised multistakeholder governance to ensure that all voices, values, and interests are heard, as we shift to true Sustainability.

What sustainability means

In 1987 the World Commission on Environment and Development defined Sustainability as “development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (WCED 1987).

Figure 1: Our Common Future

The definition put meeting basic human needs at the core of the Sustainability concept. Clean water, nutritious food, decent shelter, and the like were to be provided to everyone everywhere within Earth’s (technologically expandable) natural limits.

Since 1992, developed countries like Australia have actively shaped the Sustainability agenda at UN Earth Summits culminating in the 2015 Sustainable Development Goals (SDGs).

The 17 SDG’s commit countries to social, environmental, and economic objectives such as ending poverty (SDG 1 No Poverty); protecting marine biodiversity (SDG14 Life Below Water), and decent work for all (SDG 8 Decent Work and Economic Growth).

It is a cruel irony therefore that despite all this apparent commitment to Sustainability, most people everywhere including Australia are going backwards. Inequality is on the rise, housing is unaffordable, carbon emissions remain unabated, and biodiversity continues to decline.

Figure 2: Stockholm Resilience Centre, Stockholm University – The SDGs wedding cake

Why are we failing so miserably to deliver the Sustainability everyone recognises is needed?

I believe the answer lies in a widespread failure to appreciate just how deep the Sustainability concept cuts in challenging contemporary accounts of economic value creation.

Value Theory in (Political) Economics

To find out what something is worth these days, it is conventional to consult an economist. But those trained in the discipline of Economics define economic value very narrowly.

It was not always thus. Modern understandings of the nature of economic value commenced in the 18^th century when Smith, Ricardo, List, Marx, Mill and others heatedly debated what economic value was and how it could be measured.

Figure 3: An Inquiry inot the Nature and Causes of the Wealth of Nations by Adam Smith

Their thinking was informed by a triumvirate of economic value concepts: Use Value, Labour Value, Exchange Value.

Consider a pair of shoes. To early political economists they were potentially economically valuable because (a) they were useful to those who possessed them; (b) embodied the expenditure of labour; or (c) were exchangeable for something else.

To these Anthropocentric accounts, environmentalists subsequently added a fourth: the intrinsic ‘function’ value nature has for itself. The shoes were now also valuable because the resources used respected nature’s limits.

Enlightenment Value Reductionism

Political economy was born during the Enlightenment, the era still with us that places its faith in the capacity of individuals to rationally grasp complex phenomena by reducing them to their component parts.

Employing reductionist thinking, early political economists assumed that economic value was reduceable to either use, labour, or exchange value.

Reflected in vituperative invective by Smith on the errors of Mercantilists, and by List and Marx on the errors of Smith, political economy expressed a signal unwillingness to concede that economic value might be plural in meaning.

The ‘marginalist’ revolution of the 1870s led by British-Australian William Stanley Jevons consolidated the narrow liberal political economy view that economic value was nothing other than exchange value. The world has been living this basic idea ever since.

Exchange Value and Sustainability

In modern economic value theory, neither the labour nor the useful goods and services it creates for a community while preserving the natural environment count as economic value unless they exchange for a price. Conversely, coal production does create value when it is shipped to China in exchange for money.

The perversity of GDP as a metric of value has been brilliantly portrayed by New Zealander Marilyn Waring in the Canadian documentary Who’s Counting?

Figure 4: Who’s Counting Documentary

Conversely, because no necessary connection exists between producing something with exchange value and securing a community’s basic needs, other actors like governments and charities are forced to step in to provide for the destitute.

Add to this the hyper-competitive nature of modern market economies which sees producers continuously cut costs and aggressively and shamelessly advertise their products. While technological and social innovation may bolster productivity, the path of least resistance is often the exploitation of workers, communities, and nature to gain a competitive advantage.

Far too many recent high-profile examples of how business is exploiting workers, communities, and nature have been in the news. Think Qantas, Coles, Woolworths, and PwC!

The deeply unSustainable practices of multinational corporations are exposed in a recent 2024 report by the Special Rapporteur to the UN’s Human Rights Council.

According to David Boyd, many businesses are “environmental criminals” and ‘recidivists’ with ‘long rap sheets chronicling convictions that result in slaps on the wrist and no meaningful change in behaviour” (Human Rights Council 2024, p. 7).

Figure 5: International Institute for Sustainable Development (IISD): David Boyd, UN Special Rapporteur on Human Rights and the Environment

Governing for Sustainability Value

Sustainability value creation requires a significant upgrading in the meaning of economic value. In place of one-eyed reductionism, creating genuine economic value requires balancing exchange, use, labour, and function value in the pursuit of a fused economic, community, labour, and environmental agenda.

Concepts like ‘triple bottom line’ (TBL), ‘corporate social responsibility’ (CSR), ‘environmental, social and governance’ (ESG), and ‘people, profit, planet’ (PPP) partially capture this new, pluralistic, value proposition.

Buying in to Sustainability Value means that economic value no longer coincides with exchange value. If this is conceded, the question arises as to how it can be created.

The discipline of Political Economy not only aims to understand the nature of economic value, but also the governance arrangements that best secure its creation. Attention needs to be given to the interactions among consumers, producers, regulators, communities, and NGOs.

It would be remarkable if liberal democracy, the current dominant form of governance in the West and designed to deliver exchange value, also turned out to be the optimal system for delivering Sustainability Value. Of the several reasons for doubting that it is, consider the arguments for ‘strong government’.

Liberal democracy in practice involves competitive elections between political parties for the peoples’ vote. Large parties aim to get enough members elected to rule in their own right and deliver ‘strong government.’

Ideal liberal democratic governance occurs then when a single party with a clear majority in both lower and upper houses passes minimally revised legislation quickly in the putative national interest.

Figure 6: Roundtable on Sustainable Biomaterials (RSB) 

From a Sustainability perspective, however, strong government is biased, majoritarian, and value-domineering governance. It secures the interests of a dominant social constituency at the expense of legitimate others.

Sustainability looks to specific forms of institutionalised multistakeholder governance to ensure that all voices, values, and interests are heard. Iconic examples in the field of private governance are the Forest Stewardship Council and the Roundtable on Sustainable Biomaterials. These institutions allocate members to different interest-based ‘chambers’ to achieve the requisite value balancing.

Multistakeholder governance is infiltrating the corporate sector in the form of benefit corporations (B-Corps). At their best, certified B-Corps are governed by diverse boards that ensure that profitability respects worker, community, and natural rights along the value chain.

Multistakeholderism is being operationalised within government. Regulators that bring all relevant stakeholders into a broad and deep, science-based, and respectful deliberative process on policy options not only promote the achievement of Sustainability value but also contribute to community acceptance and the earning of a ‘social license to operate’.

Sustainability is a pluralistic construct that is not confined to a single sphere. Conceptualised in value terms it constitutes a major challenge to citizen-consumers, corporations, governments, and civil society organisations.

Single-interest, single-value governance cannot deliver Sustainability. Equitable, chamber-based, deliberative, and appropriately resourced multistakeholderism ‘all the way down’ just might.

References

Gale, F.P., 2018. The Political Economy of Sustainability. Cheltenham: Edward Elgar.

Gale, F., Goodwin, D., Lovell, H., Murphy-Gregory, H., Beasy, K. and Schoen, M. 2024. Renewable hydrogen standards, certifications, and labels: A state-of-the-art review from a sustainability systems governance perspective. International Journal of Hydrogen Energy 59:  654-667.

Gale, F. and Haward, M. 2011. Global Commodity Governance: State Responses to Sustainable Forest and Fisheries Certification. Basingstoke: Palgrave Macmillan.

Murphy‐Gregory, H. and Gale, F., 2019. Governing the governors: the global metagovernance of fair trade and sustainable forestry production. Politics & Policy 47(3): 569-597.

Ripoll González, L. and Gale, F., 2020. Place branding as participatory governance? An interdisciplinary case study of Tasmania, Australia. Sage Open 10 (2).

Roundtable on Sustainable Biomaterials. 2024. Who we are. Online at: https://rsb.org/about-rsb/who-we-are/, accessed 4 April.

Smith, Adam. 1776. The Wealth of Nations. London & New York: Penguin Classics.

Stockholm Resilience Centre. 2024. The SDGs Wedding Cake. Online at: https://www.stockholmresilience.org/research/research-news/2016-06-14-the-sdgs-wedding-cake.html, accessed 4 April.

United Nations. 2024. The 17 SDGs. Online at: https://sdgs.un.org/goals, accessed 4 April.

United Nations Human Rights Council. 2024. Report of the Special Rapporteur on the issue of human rights obligations relating to the enjoyment of a safe, clean, healthy and sustainable environment, David R. Boyd. Business, planetary boundaries, and the right to a clean, healthy and sustainable environment. GE.23-25836 (E). 02 January.

Waring, Marilyn. 1995. Who’s Counting? Marilyn Waring on Sex, Lies, and the Global Economy. National Film Board of Canada. Directed by Terre Nash. Online at: https://www.nfb.ca/film/whos_counting/, accessed 4 April 2024.

WCED (World Commission on Environment and Development). 1987. Our Common Future: The Report of the World Commission on Environment and Development. Oxford: Oxford University Press.