“Degrowth” to save the world: is there any merit in the idea?

The Conversation has published an article by a Research Fellow at the Melbourne Sustainable Society Institute, entitled “Life in a de-growth economy and why you might actually enjoy it.”

I saw it get some approving shares on social media, and it has collected a bunch of adulatory comments.

The topic is close to my heart- the costs and benefits of economic growth. This is surely one of the biggest issues in social science right now and I am delighted to see it get an airing. The piece also touches on the limits to growth, which I am fascinated by.

This week I found a flat screen TV sitting forlornly in a pile of hard rubbish. I took it home and plugged it in. It works. The level of affluence we have and our willingness to throw things out is, to me, confronting.

Dusty but functioning...
Dusty but functional…

So I am primed to hear someone ask the tough questions of our economic system. However, the level of analysis in this report is … *cough* … uneven.

“Degrowth would liberate us from the burden of pursuing material excess. We simply don’t need so much stuff – certainly not if it comes at the cost of planetary health, social justice, and personal well-being. Consumerism is a gross failure of imagination, a debilitating addiction that degrades nature and doesn’t even satisfy the universal human craving for meaning.” 10/10 True. 

“To be distinguished from recession, degrowth means a phase of planned and equitable economic contraction in the richest nations, eventually reaching a steady state that operates within Earth’s biophysical limits.” 10/10 for the desirable endpoint.

“Degrowth, by contrast, would involve embracing what has been termed the “simpler way” – producing and consuming less. This would be a way of life based on modest material and energy needs but nevertheless rich in other dimensions – a life of frugal abundance.” 0/10 How the living heck do we get from here to there.

“In a degrowth society we would aspire to localise our economies as far and as appropriately as possible. This would assist with reducing carbon-intensive global trade, while also building resilience in the face of an uncertain and turbulent future.”

minus 10/10 Don’t blame trade. Shipping is the most carbon efficient form of transport and contributes just 3 per cent of global carbon emissions.

In fact, trying to cut emissions from trade probably hurts the environment. The carbon effect of trying to produce locally is often worse:

“One recent UK report found that the greenhouse gas emissions involved in eating English tomatoes were about three times as high as eating Spanish tomatoes. The extra energy and fertilizer involved in producing tomatoes in chilly England overwhelmed the benefits of less shipping. Even New Zealand lamb produced less greenhouse gases than English lamb. Berkeley graduate student Steven Sexton estimates that an American switch to more local corn production would require 35 percent more fertilizer and 22.8 percent more energy.” [source]

The problem with the degrowth argument – as presented in this piece – is that it has no sense of the dynamics of an economy. Motivated by a clear vision of a utopian alternative, it simply flicks the pages of the book until we are at the end.

The closest it gets is this:

“Actions at the personal and household levels will never be enough, on their own, to achieve a steady-state economy. We need to create new, post-capitalist structures and systems that promote, rather than inhibit, the simpler way of life. These wider changes will never emerge, however, until we have a culture that demands them. So first and foremost, the revolution that is needed is a revolution in consciousness.”

Here are the problems I foresee with trying to set up “post-capitalist structures”:

1. When the economy is in a sharp growth phase, it tends to deliver wealth to the rich first, then spread the benefit. When the economy is in a sharp contraction phase, it tends to be the poor that are hurt. I’d be very surprised if “planned and equitable contraction” were even possible without spreading shortage to the people who could least manage it.

2. The governmental resources required to supervise the economy on such a scale remain unknown. What policy levers need to be pulled? If you need to expand the government to effectively supervise the shrinking of the economy, do you not need profitable businesses to tax?

3. Gucci handbags come with influenza vaccines in them. (Metaphorically speaking). Growth is not just wanton consumption. It’s also improved infant mortality rates, more recognition and better treatment of mental illnesses, better educations.

4. But even wanton consumption has positive side-effects. China’s adoption of capitalism has lifted hundreds of millions of people out of abject poverty and given them hope for a better life. That growth is due in part to rich westerners buying frivolous Chinese-made goods. De-linking the rising affluence of the poor from the rising affluence of the rich is to miss cause and effect. We’re all in this together.

5. Global coordination. Attempting to institute post-capitalist structures single-handedly leaves you a bit like North Korea.

6. Population. If growth cuts fertility rates, what effect will de-growth have? Would a Chinese style population policy be required to prevent global population growth from accelerating?

7. Economies are amazingly tough. If you try to squash them, they’ll just keep on bobbling up. If you outlaw them, they’ll survive. A de-growth economy is going to have to be enforced in a coercive fashion, and exist alongside a thriving black market.

So, having given the “de-growth” idea a kicking, do I have anything positive to add?

I think I do.

It sounds prosaic, but the answer to the very real problem of environmental degradation exists and does not require inventing a whole new approach.

The solution is in raising the cost of harmful activities until they are performed only at acceptable levels.

Policy actions like instituting a carbon tax are within our grasp. We’ve already cut emissions of chlorofluorocarbons. We can police water pollution and  the fishing of dwindling populations and the elimination of natural habitat.

The problem of equality can be solved too, using the awfully yawn-inducing tools we already have in our grasp: Things like land taxes, income taxes, tax credits, and publicly funded schooling are enough to shape the world into a more desirable form. To think we’ve exhausted their power is to think small.

But I can see a role for the de-growth movement.

A movement for social change will be more radical than the changes it is able to effect. If de-growth were to become a more popular idea, it would provide serious impetus to the sensible solutions I mentioned above.

So I won’t think less of you for promoting de-growth – so long as you don’t believe in it.

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thomasthethinkengine

Thomas the Think Engine is the blog of a trained economist. It comes to you from Melbourne Australia.

4 thoughts on ““Degrowth” to save the world: is there any merit in the idea?”

  1. The de-growth movement kinda reminds me of the ‘slow food movement’ and people love that shit! There’s potential if happiness can be gained by having less things, but of better quality and with better social and environmental credentials.

    Liked by 1 person

  2. Degrowth??? God give me strength. Another new word to add. Ummm, = reduction? (Perhaps growth is a warm, fuzzy word which makes us feel good; so we just De it.) Loved the article. Totally agree. We just have too much stuff; we are too rich for our own good. We need to find purpose from recycling; trading; improvising; living within our means and saving all those wasted dollars for worthwhile endeavour. Go Thomas!

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  3. Those abandoned TVs – and a lot more besides – cause me great unease. Something is very wrong. (Quite apart from “degrowth”.) And yet I noticed the other day the local opp shop doing a roaring trade, people buying everything from homewares to clothes; these people had obviously decided that they could make do with used items. Oddly enough, no flat-screen TVs to be seen.

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  4. I think you are simplifying the situation a bit and suffering from status quo bias. Economists are always conflating innovation, learning and technology with economic growth – and a particularly rapacious implementation of it when these things can occur independently.

    The developed world already consists of different approaches to modified market systems. The anglo countries are perhaps the most disconnected of the lot and have taken mindless consumerism to new and idiotic levels producing unhappy, fat and discontented people who fill their meaningless disconnected hallow shells with porche cayennes.

    The present system isn’t working.

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