Five things you need to know about degrowth
10.11.2020 Author Ruby Russell
Expanding GDP is the hallmark of a healthy economy — or is it? Some economists believe that for the sake of planetary health, we need to stop growing. Here’s why.
We are used to hearing politicians and policy wonks talk about economic growth, celebrating when it goes up, and selling their pet projects and policies as key to boosting growth.
The problem is, as the economy expands, so does our consumption of resources. Waste, emissions and other pollution go up, too. Which is why many are asking — can we really keep infinitely expanding our economies on a planet of finite resources?
Among those arguing for a whole different approach are ecologists, economists and activists whose core concerns aren’t just environmental, but social justice.
Here’s why it might be time to ditch economic growth.
Our obsession with GDP hasn’t been around that long
It was only in the mid-20th century that gross national product (GDP) became the go-to measure of economic success, providing a metric for competition between capitalism and communism.
Yet in 1972, the Club of Rome — a group of heads of state, economists and business leaders — published a headline-grabbing study titled The Limits to Growth , predicting that unchecked economic expansion would lead to resources running out, economic collapse and ecological disaster.
These predictions resonated during the 1970s energy crisis, when petroleum shortages sent the price of oil soaring and economic growth slowed. But with access to new sources of oil, debate spurred by the study died down. Expanding GDP became increasingly central not only to economic policy, but just about every global project aimed at making the world a better place.
“Decent work and economic growth” sits alongside “zero hunger” and “climate action” among the UN’s 17 Sustainable Development Goals. Even the Intergovernmental Panel on Climate Changemodels emissions-reduction scenarios on the assumption that the global economy will roughly double in size between now and mid-century.
But arguments against unchecked economic expansion haven’t gone away, and studies have shown that The Limits to Growth’s predictions on resource use and its ecological impact have largely been borne out in the intervening years.
Tech-fixes alone won’t save the world
Still, debate rages over whether we can break the link between economic growth and environmental harm.
Proponents of “green growth” argue that we can keep our economic systems operating much as they do now by swapping fossil-fuel energy for renewables, using less energy overall, and recycling more.
Degrowthers, however, say converting the current volume of industrialized production and throwaway consumption we have now to a circular system is simply impossible.
And perhaps more fundamentally, in a system designed to keep expanding, savings in energy and resource-use tend to go into increasing production and profits, meaning that overall, environmental impacts can stay the same — or even go up.
Economic growth doesn’t help everyone
Even aside from the existential threat of ecological and economic collapse as we deplete resources, destroy biodiversity and heat up the planet, the assumption that economic growth generally makes us all better off is increasingly questioned.
Developing countries tend to have high growth rates, as more people have disposable income and more markets open for consumer goods. But in industrialized countries, growth generally slows, and efforts to speed it up don’t necessarily result in a better standard of living for most people.
The work of economists like Thomas Piketty, author of “Capital in the Twenty-First Century” (which was not only lauded for compiling the most comprehensive data on wealth disparity to date, but was also a surprise bestseller), has shown that over recent decades, ordinary wages in industrialized countries like the US have stopped rising in line with productivity and growth.
The benefits of economic growth have increasingly been going to the super-rich, with the divide between rich and poor yawning ever wider.
A degrowth economy could mean more free time
Proponents of degrowth, post-growth or steady-state economics argue that boosting growth in industrialized economies isn’t the answer to improving quality of life. In fact, living within nature’s constraints could make us all happier.
We know we should consume less, and consume more carefully, share and repair appliances, cycle rather than drive, take the train instead of flying. But these things can feel like big sacrifices that, individually, have little impact.
In a degrowth economy, instead of relying on consumer power to reduce the demand for environmentally harmful production, we’d do it the other way — collectively slowing the whole, frantic system down, producing and consuming less would mean we could also work less.
We’d be poorer in stuff, but richer in time, replacing the sugar-rush of consumerism with more profound pleasures, such as community and creative pursuits — be they the arts or growing our own food. We would have time to volunteer and share resources, engage in direct democracy , and develop alternatives to a profit-driven economy.
Some sectors would shutter, but others would flourish
This might imply whole — environmentally harmful — industries shuttering. But degrowth isn’t about slamming the brakes on the entire economy and sliding into painful recession.
Instead, the focus would shift to sectors — like care, education, renewable energy and public transport — that improve human and ecological wellbeing, rather than those that attract investment purely because they generate profit.
As Jason Hickel, an economic anthropologist at Goldsmith’s University in London and leading proponent of degrowth, points our, privatizing health care might be good for GDP, and rent controls bad for it. In an economy shaped for people, not profit, better public services and a fairer distribution of wealth would mean that more of us could afford to live well, on less.
What is a Steady State Economy?
A Steady State Economy is not an alternative economic ideology that is centred on endless GDP growth. It is neither capitalism nor communism.
Economic growth, with all of its downsides, is clearly unsustainable in the 21st century. Long-term recession is no panacea either. A steady state economy is the sustainable alternative to perpetual economic growth.
Economic growth was never a magic bullet; it is simply an increase in the production and consumption of goods and services–it can’t possibly lead to a sustainable outcome. In contrast, the steady state economy provides the means for present and future generations to achieve a high quality of life.
The goal of Steady State Economics is to substitute the model of endless GDP growth with a stable and mildly fluctuating economy
In this interview, Palm Oil Detectives speaks with Martin Tye, a representative of the Center for the Advancement of the Steady State Economy (CASSE) in Regional Australia. Martin studies ecological economics and history and passionate about improving the quality of life for current and future generations and restoring wildlife.
The Center for the Advancement of the Steady State Economy (CASSE)was formed in 2003 by conservation biologist, author, speaker and media commentator Brian Czech.
“Somehow, we have come to think the whole purpose of the economy is to grow, yet growth is not a goal or purpose. The pursuit of endless growth is suicidal.”
The term often refers to a national economy, but ‘Steady State’ economics can also be applied to a local, regional, or global economy.
An economy can reach a steady state after a period of growth or after a period of downsizing or degrowth.
A steady state economy entails a population growth and per capita consumption that is stabilised and balanced.
GDP is a solid indicator of economic activity and environmental impact – not well-being. All else equal, the steady state economy is indicated by stabilised, or mildly fluctuating GDP.
Gross Domestic Product (GDP) is not a good indicator of well-being
In a steady state economy, people consume enough to meet their needs and lead meaningful, joyful lives without undermining the life-support systems of the planet
With a Steady State economy, conspicuous consumption becomes a thing of the past
People choose to consume energy and materials responsibly, conserving, economising, and recycling where appropriate.
Citizens (yes citizens, not consumers) recognise that the culture of materialism as a bankrupt ideology and a poor path to happiness.
People forget about trying to accumulate evermore stuff, instead focusing on more worthwhile pursuits.
Personal and societal decisions about how much to consume take into account sustainability principles and the needs of future generations.
If the world continues on its current trajectory, in 20 years what will happen doesn’t bear thinking about. Things will get very ugly!
Industrial scale food agriculture is a necessary support to growing economies- all part and parcel of the package, in particular their demand for growing populations (consumers- who need to be fed, so they can buy).
A growing economy consumes natural resources and produces wastes. This results in biodiversity loss, air and water pollution, climate destabilisation, and other major environmental threats.
GDP growth metrics fails to consider the ecological impacts of production, or recognise ecological limits to growth. So ecological pressures continue unabated.
What would steady state global agriculture look like?
Just as a growth economy tends to impart industrial characteristics to its agricultural systems, a steady state economy tends to impart sustainable characteristics to its agricultural systems.
A fixed quantity of food
Such an economy requires a fixed quantity of food. There is no need for constantly increasing the amount of food produced, and there is a calming effect on the landscape – not as much land needs to be in crop-production mode.
Low throughput of energy and materials
In addition to stable population and consumption, a steady state economy features stable and relatively low throughput of energy and materials, a characteristic that applies to the agricultural sector.
Decentralised and local
The best way to achieve sustainable throughput in agricultural systems is to decentralize. Inputs, especially fossil fuel inputs, can be reduced by shifting to local systems of production, distribution and consumption. Agriculture in a Steady State Economy.
Guided by a dashboard of ecological, social and economic progress indicators (GPI’s) we will have begun to re-shape the world.
Ecosystems would have started their recovery, economies would be progressing towards a restructured smaller local and sustainable scale.
As resource pressures ease, so too will international and regional tensions
People will see improved life satisfaction as “well-being” replaces “growth” as a goal.
In this version of the future, the world would be a much happier and positive place than it is today. In this state, human achievement and potential will be maximised.
The Steady State economics model offers goals like sustainability and fairness with the least amount of impingement on individual freedoms.
Cargill – Animal Utopia by Hartmut Kiewurt https://hartmutkiewert.de/werk/animal-utopia/
A steady state economy has four basic principles:
1. Maintain the health of ecosystems and the life-support services they provide.
2. Extract renewable resources like fish and timber at a rate no faster than they can be regenerated.
3. Consume non-renewable resources like fossil fuels and minerals at a rate no faster than they can be replaced by the discovery of renewable substitutes.
4. Deposit wastes in the environment at a rate no faster than they can be safely assimilated.
A steady state: The only kind of economy that’s sustainable in the long term
It is an economy that meets people’s needs without undermining the life-support services of the planet.
This will paint a more realistic picture of the state of things, better inform policy and guide the changes they need to make.
“The strongest move policy-makers can make is to adopt new performance indicators to replace GDP”
Simplicity and non-violence are obviously closely related
As physical resources are limited, people satisfying their needs by means of a modest use of resources are obviously less likely to be at each other’s throats than people depending upon a high rate of use. Equally, people who live in highly self-sufficient local communities are less likely to get involved in large-scale violence than people whose existence depends on world-wide systems of trade. ~ Buddhist Economics By E. F. Schumacher
Activists can take individual action and collective action to effect change
A good example of a collective of researchers, economists, conservationists and activists pushing for change is CASSE: The Centre for Advancement of Steady State Economics.
Czech, B., and H. Daly. 2004. The steady state economy: what it is, entails, and connotes. Wildlife Society Bulletin 32(2):598-605.
Czech, B. 2019. The trophic theory of money: principles, corollaries, and policy implications. Journal and Proceedings of the Royal Society of New South Wales152(1):66-81.
Czech, B. 2006. Steady state economy. Encyclopedia of Earth. Eds. Tom Tietenberg et al., National Council for Science and the Environment, Washington, DC.
Czech, B. 2009. Ecological economics, in Encyclopaedia of Life Support Systems. Developed under the auspices of UNESCO-EOLSS Publishers, Oxford, UK (copy compliments of UNESCO).
Czech, B. 2009. The self-sufficient services fallacy. Frontiers in Ecology and the Environment 7(5):240-241.
Czech, B. 2008. Prospects for reconciling the conflict between economic growth and biodiversity conservation with technological progress. Conservation Biology22(6):1389-1398.
Hardin, Garrett. 1968. “Tragedy of the Commons.” Science, volume 162, pages 1243-1248.
Mill, John Stuart. 1848. “Of the Stationary State,” Book IV, Chapter VI in Principles of Political Economy: With Some of Their Applications to Social Philosophy, J.W. Parker, London, England.
Schumacher, E.F. 1966. “Buddhist Economics” in Guy Wint (ed.), Asia: A Handbook, Anthony Blond Ltd., London, U.K.