These are times of unprecedented economic growth. There is no point repeating the figures, that employment is at a record high and that credit ratings are way beyond the satisfactory. The tourism sector has never had it so good, perhaps the ultimate gauge in as far as the feel good factor in concerned.

It is obvious that the construction sector deserves at least a mention. It is thriving. Environmentalists voice their concern and residents often have no choice but to face up to the brunt of building works with the cranes and all, plastering, white dust or whatever, beside their homes. Not to mention the stress one endures should the unthinkable happen. However, it is common knowledge that the positive ripple effect on the economy is, modestly, all too very significant.

It is a sellers’ market and there are substantial prospects for those who want to make a good earning from real estate. More so, if the intention is to invest the sum into better property that would, in turn, require additional sums loaned from the banks. And, so, the wheel is turning and there can be no spokes to obstruct.

Hidden in woods is the spectre of the rental market; prices have been soaring in response to increased demand arising from a number factors. The question is whether this state of affairs, also triggered by the prospects of more foreigners choosing to reside in Malta, puts further at risk the lower echelons of society whose chances for home ownership remain bleak.

The Prime Minister rightly quotes the figures to show there is a new middle class in the making. There are more people with higher earnings than ever before and, undoubtedly, there is a broader spectrum of people who can afford more. Crude economic statistics alone are pointing clearly ahead: progress is indeed being made.

Ultimately, that is precisely what any Centre-Left government should stand for in fulfilling its mission: the mobilisation of society such that the lower ‘classes’ – many would argue, rightly or wrongly, that we live in a ‘classless’ society nowadays but that is another matter – move up the ladder through the improvement of their economic standard of living. On this count, for sure, the Labour government is performing and thoroughly well.

Not to mention that vital aspect of the economy, that is, the energy sector that sustains it. The deadline being met or not, as from day one this government – without wanting to sound too political in the crude sense but simply because it is ultimately the political masterminds who are the ones in whose hands rest make-or-break decisions – has embarked on such an ambitious project to reform the energy sector.

Economic growth must be linked to the broader dimension of what is understood by a superior quality of life

Economies without a solid energy backbone are utterly spineless. They crumble easily leaving a trail of desperation the likes of which revert a nation, any nation, to a miserable primordial state.

Should we treat the economy in a vacuum as if it can be perceived as infinitely elastic, wanting to grow more and more like the spread of galaxies in the universe? The neoclassical economists who have always tended to focus on labour and capital would probably argue in this line of thought.

The other factor – land – that should not be taken merely in the literal sense as if one is just referring to space where to build houses and palaces, has typically been taken for granted under the impression that land, or, rather, the resources that can be derived from the environment, are infinite and constitute a boundless cornucopia.

It is mostly the neoclassical economic tradition that prevails and that sustains the economic models upon which crucial decisions are made and the livelihood of people, in Malta and elsewhere, is built.

Adjustments have been made, though, mostly, still of a purely theoretical and hardly implementable nature, to account for the economic costs of, say, pollution and the classic biggest market failure of recent times: climate change. However, these adjustments are still considered minor compared to what other economic theorists, such as those who argue about so-called ‘steady state economy’, believe should be more desirable.

The starting point of the ‘steady state’ concept or philosophy is that the economy cannot be perceived as if it acts in isolation from the environment from where it is nourished and, therefore, grows. Economic growth, whether national, regional or even global, is thus constrained by the ability of the economy to sustain itself through energy and materials that it acquires from its surroundings.

Economic growth is thus a transformative process through which materials like fossil fuels, metals and other raw matter are consumed to the benefit of mankind but, ultimately, leading to the generation of waste that, by its very own nature, the environment must be able to absorb.

In other words, the environment acts both as a source of materials andenergy that sustain economies to enable growth and also as a sink or repository of the wastes generated in the economic growth process.

It is a question of ‘throughput’, that is, the amount of material and energy that passes through the economy and, therefore, makes it grow but in consideration of the limits that are inevitably imposed. To what extent can an economy keep on growing without damaging its own sustenance base that is the environment and, hence, itself in the process of doing so?

The pure economists would perhaps like to ponder about the Maltese economy in terms of the steady state model: it does not imply that any kind of saturation has been reached as far as economic growth is concerned. It is neither the case, however, that it can be taken for granted that the environment can support indefinitely, relentless or inadequately managed economic growth.

Moreover, economic growth must be linked to the broader dimension of what is understood by a superior quality of life.

There has been a plethora of academic work over the decades about the relationship between the economy and the environment and at what level should economies or, rather, economic growth be considered to have reached a state that is deemed incompatible with the ‘land’ that feeds them and keeps them thriving. How does economic growth remain sustainable?

But academia and political ends rarely see eye to eye and, irrespective of whoever holds the reins of power, economic growth – cornucopian or whatever – remains the ultimate priority.

There can be no serious argument about the fair and equitable distribution of wealth in society without the reassurance that robust growth is taking place. The policymaker will then intervene, judiciously, to ensure that the market forces do not run roughshod and the proper mechanisms are in place that serve to elevate the middle classes.

But then, the public is hardly interested in which theoretical model should be applied to describe the relationship between the economy and the environment, complex as that may be. Leave that to the realm debating societies where tempers flare while others, with a sarcastic grin on their face maybe, wisely enjoy the silence.

The public will, however, be interested in what is actually meant by ‘middle class’ and what really constitutes being better off at a time when, indeed, the economy is booming.

Is it all about a new job or a better one with more favourable conditions and a heftier pay? Very important, vital and essential, but is that all?

Frankly, I doubt it.

sapulis@gmail.com

Alan Pulis specialises in environmental management.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.