THERE are people who sound like they know what they are talking about. Very often people who have the glib fluency that comes from going to independent schools, before enrolling in the country’s best finishing school, Oxford University, and “reading” for a degree in politics, philosophy and economics. Then, into investment banking, right-wing think tanks, journalism, including the BBC – and, of course, politics.

Adam Smith would have dismissed them all as unproductive workers. For Smith, productive work involved the accumulation of capital, which he saw in the emerging industries of the late 18th century.

I suspect that, today, Smith, who formed an intense dislike of Oxford University while a student there, would happily puncture the pretensions of many of these commentators. He would ask why we place so much weight on the pronouncements of investment bankers, who spend their time trading among themselves, seemingly disengaged from the productive economy.

Asked by a reader to write about the circular economy, my immediate response was to pass, to say it is one of those concepts where it is necessary to find a quite different kind of expertise. It would be as good as giving the space to Boris Johnson or Liz Truss or a plank of wood.

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Circularity is about production – designing goods so they can be used and then dismantled, going into new production processes, or being re-used or even recycled. It is an engineering response to the need for us to lighten our footprint and, as that reader put it – to stop boiling the planet.

This means rethinking what we mean by “production”. Cue much academic hair-splitting.

Its practical impact will be in systems design, with circularity built into our public infrastructure as well as production processes.

Think about the huge investment going into the development of electric cars and even the dream of driverless cars. With current technology, batteries probably have a life of about eight years. Most cars will probably require one change of battery in their lives.

Current battery technology depends on inputs of rare metals, which are often mined in appalling conditions. At least their cost means that there will be strong incentives to make the battery industry circular, economising on inputs, recovering as much value as possible once the parts are worn out, and re-using old batteries as much as possible.

There is a broader risk, though, that electric cars will turn out to be the “tech bro” solution, with a focus on engineering innovation, while failing to respond to the wider needs of society.

Most journeys are short. We can walk more. As I was out running the other day, a young woman shot past me on an electric scooter. She was on the road as a vehicle driver – not the footpath – navigating a speed bump in style. A low-cost, low-impact solution for short journeys.

Across Europe, many cities have decided there needs to be space in the centre entirely free from cars. Along with that, they have built well-integrated public transport systems, making it easy for people to travel into the centre of any city – and between cities.

Electric cars will help to reduce carbon emissions. But they will still need the road system and the huge areas of land in cities which need to be set aside for parking. It would be much easier to build circularity into a transport system based around public transport, and much lower-cost transport solutions for local travel.

During lockdown in 2020, the Scottish Government convened a working group to report on how it should adapt its economic strategy to promote recovery. Benny Higgins, former banker and executive chairman of Buccleuch Estates, chaired it. I doubt he wrote very much of it. It contained an excellent summary of how we might talk about the economy, setting aside questions about consumption and instead concentrating on four types of capital.

As well as the physical capital we need for production, it identified human capital – the knowledge and capabilities of individuals; social capital – which holds organisations together, and often consists of the tacit knowledge about procedures and routines, without which organisations collapse; and natural capital – the value of the sliver of the planet on which we all live.

Capital, in this sense, consists of everything we might consider an asset – every resource has been created to add to the total sum of human happiness. You might not easily pick up on this from the standard media commentary, but the fundamental objective of economics is to increase human happiness by understanding how to manage resources. Managing money is only a tiny part of that. Managing these capital stocks well is much more important.

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First, we need to stop “boiling the planet”. Then we need to be better at caring for ourselves and each other. Take two current examples. The sea of sewage surrounding England’s coast and the suspicion that structural failings in England’s NHS is leading to 500 preventable deaths per week.

These are examples of failures to take enough care of our total capital stock, which come from a naive belief that markets work and that government cannot really improve on their performance.

They are the result of our political leaders’ inattention.

Too often, they have chosen the easy path, concentrating on increasing consumption now and ignoring what will happen in the future.