In today’s mini-budget, the Chancellor has announced £3 billion worth of green investment. As a number of commentators have pointed out, this pales in comparison to Germany’s £36 billion green spending plan. But even if the government was much more generous, ‘Green Keynesianism’ is not enough.

Vital though it is, a transformative wave of public investment cannot alone resolve the crises confronting us: of mounting economic trauma, the inequalities of racialised capitalism, the injustices of our crisis of care, and looming over everything, the worsening climate emergency – an emergency that reflects the accumulated and ongoing effects of empire, colonialism and economic extraction. A systemic crisis requires a systemic response. Fundamental to this must be a deep reordering of the UK’s legal architecture, one that can generate a new purpose for the economy to make it democratic and sustainable by design.

The ‘economy’ is not a fixed, natural space that spontaneously organises itself without political intervention, but is instead constituted by political and legal rules, maintained by public action. There is not one inevitable ‘market’, but many market and institutional possibilities, depending on how the rules are defined and the resources with which participants are endowed. These can be redefined and reallocated toward sustainability and justice, democratising governance rights and decarbonising economic activity. The law therefore plays a critical role in determining the nature of the economy: who has power, who is rewarded, and how nature is organised by human activity to what purpose. 

Our current legal framework allocates capital a near-monopoly on economic co-ordination rights and stacks power in favour of asset-holders over labour. And the law ensures that younger generations, marginalised economic and social communities, and vulnerable nations, which will continue to suffer the worst consequences of climate damage despite being least responsible, have little representation in economic management, while protecting those whose actions are accelerating the crisis. 

The law, then, helps to generate and sustain unequal distributions of political-economic power, naturalises market-mediated inequalities, and enables forms of climate damage that threaten the health of the natural systems we all depend on for mutual flourishing. The neoliberal turn in the law has been central to the disenchantment of politics by economics, insulating the market from democratic intervention, and driving environmental breakdown. 

The Covid-19 crisis, like so many before it, has underscored the inseparability of economics from politics and law and the entanglement of human and non-human worlds. This entanglement presents a vital opening. If the rights and powers that enable climate damage and inequality to thrive are publicly granted and legally defined, they are capable of being transformed. Law, of course, has an ideological character of its own, one that often has ingrained biases toward an existing and unequal status quo. But our interlocking crises cannot be addressed unless we reimagine the underlying legal infrastructures generating them. 

The Green Recovery Act – published today by Common Wealth – shows how we can use the law to nurture a new economy: one that is purposeful, sustainable, and democratically governed, where all its stakeholders have a say in the wealth we create in common, infusing rights and collective rule into relations previously defined by power and subordination. Its goal is a double movement in our economy: toward the decarbonisation and democratisation of our futures, and the conjoining of climate and economic justice. 

Overhauling the Climate Change Act 2008, the Act would put in place the legal mechanisms to drive a just transition of the economy. From scaling up post-carbon energy and transport systems, to guaranteeing full employment, incomes and training for workers affected by accelerated decarbonisation; from giving local government the power and resources to deliver local Green New Deals now, to democratising corporate governance of the firm and capital markets; the Act would help secure a deep reorganisation of our economic institutions.

In the face of climate crisis, these interventions should be common sense across all political traditions. But our proposal has deep continuities with Erik Olin Wright’s vision of socialism: an economic structure in which the power relations by which the allocation, control and use of economic resources is determined by social power against economic power. By replacing the sovereign rights of capital with democratic rule, the proposal would ensure that social institutions and collective organisation determine our development – and make the interests of people and planet the foundation of a post-carbon economy. 

Radical though the proposal may seem, in an age of environmental breakdown and entrenched inequality, it is modest. With the world on track for catastrophic temperature rises – and with the impact of the climate crisis already here for hundreds of millions of people – those content to merely tinker with an economic model driving breakdown are the ones with the extreme position. What is needed is a twin transformation: a green stimulus alongside a greening of the law to restructure our economy toward justice and sustainability.