Imagine we are in the Cathedral Restaurant of Eternal Growth. Perhaps in a nod to the holy trinity it never serves more than three dishes:
A : The Old Regular is the “business as usual” of continuous GdP growth, as greenish as can be but de facto de-prioritising and externalising any eco- or socio costs. “The Old Regular” dish has intermittently come with increasingly severe health warnings. Globally that has not much dented it’s position as the top seller.
B : The New Green Regular is a semi-re-engineered old regular wrapped in greenery to help turn fossil dependent GdP growth into carbon-neutral GdP growth. It wants to de-couple GdP-growth from growth in pollution.
C : The Post Regular is a pick-your-own dish of the day from a globally sustainable buffet.
Growth by Trussonomics may be history repeating a farce as a tragedy. But aggregate GDP-growth continues to be widely regarded as an absolute necessity across most of the political spectrum if only because officially There is No Alternative. Nonetheless discontent with the distribution of growth has grown and its ecological destructiveness is now not as easily dismissed as it was 50 years ago.
Xhulia Likaj, Michael Jacobs & Thomas Fricke recent article makes for a uniquely clear historical exposition of the positions around the critique of economic GdP-growth and its potential alternatives.
Reflecting the general must-go-green aspiration, they have no space for the Old Regular of the traditional cathedral menu. Indeed, unless employed by relevant corporations, very few academics of any kind currently advocate the ongoing practices of deforestation, overfishing or species extinction, let alone continued fossil based growth. As the The Economist put it:
“We must face this fundamental truth: The dream of a planet of almost 8bn people all living in material comfort will be unachievable if it is based on an economy powered by coal, oil and natural gas. The harms from the cumulative emissions of carbon dioxide would eventually pile up so rapidly that fossil-fuel-fired development would stall.”
Accordingly Likaj, Jacobs & Fricke ignore the anachronistic Old Regular and focus on comparing the New Regular with different versions of post growth.
Abstract – Arguments about the possibility and desirability of exponential economic growth have animated the environmental movement for half a century, since the publication of the Club of Rome report The Limits to Growth in 1972. The debate has been revived in recent years as the climate crisis has reached centre-stage. This paper seeks to unpick the different strands in the debate and the different kinds of arguments – philosophical, empirical, and policy-prescriptive – used by different writers and institutions. It suggests that the contemporary debate is best understood as a disagreement between political strategies, in which the character of public and academic discourse plays a key role.
INTRODUCTION – The aim of this paper is to unravel and explain the different arguments which have been made, and the different conclusions reached, in the debate about the possibility and desirability of economic growth, a debate which is soon to reach its 50th birthday. These arguments have raged within the environmental movement throughout that period (and to a lesser extent among feminist scholars, and more recently social justice advocates) but have only ever been on the fringes of academic economics or mainstream politics. Today, however, as the urgency of the climate and environmental crisis has become more widely evident, and the growth of inequality in multiple forms has led to searching questions about modern capitalism, they are beginning to move closer to centre stage.
It remains unfortunately the case, however, that the debate about growth tends to generate more heat than light. Riven with ideology and selective use of empirical data, different arguments become fused and confused, and different conclusions elided. We hope this paper can offer some clarity, and in doing so move the debate on to more useful ground. For all its faults, the issues it seeks to address are the most urgent the world now faces.
The paper is structured as follows. The first section embeds the growth debate in a historical perspective by outlining briefly the origins of economic growth as a material phenomenon during the industrial revolution, and how it radically changed many aspects of human life. It then turns to the concept of economic growth, describing how growth emerged and established itself after the Second World War, initially as a statistical idea and then as a principal policy goal.
The second section focuses on the critiques of economic growth as a policy goal. Distinguishing between the environmental and social costs of growth, it seeks to disentangle the different types of argument – logical, ideological and empirical – that have been made about these, and whether such costs are inevitable or contingent on the particular form which growth has taken.We have attempted a diagrammatic representation of these in the Annex.
Finally, the third section describes the three overall positions generally taken in the debate today: green and inclusive growth, degrowth and post-growth. It notes how these are adopted by different protagonists as much for political strategic reasons (which term and kind of argument is likely to be most effective?) as for logical, ideological or empirical ones. It concludes with some remarks on whether a coalition of forces straddling these current groups might be achievable.
EXCERPTS – …”… When western capitalism began to experience a succession of crises in the 1970s, with declining profit rates, rising unemployment, accelerating inflation and industrial and social unrest, the growth paradigm might have been challenged. In popular culture it was; but in mainstream political economy it simply took a new form. The free market revolution (what is often now known as the birth of neoliberalism (Blyth 2002)) did not question the goal of growth, merely the ability of governments to achieve it through interventionist public policy. To the contrary, it was now claimed, growth would best be achieved by releasing markets from the restrictions of the state (Duménil and Lévy 2005, Robison 2006). Indeed, growth did not merely persist as the overriding goal of economic policy and society, it was strengthened, as other objectives of the Keynesian era (increasing equality, a strong welfare safety net, the development of social institutions) were abandoned, and household consumption became more narrowly the primary indicator of economic success. Economic policy and politics might have radically changed, but the growth paradigm remained. … It is not hard to see why this should have happened. For around half a century, from 1950 to around 2000, the empirical evidence seemed to show fairly unequivocally that economic growth generated critical economic benefits. ...
… (green-growth critics argue that “… the claim that GDP growth could be environmentally sustainable is not borne out by any actual empirical evidence: there has been very little absolute decoupling of physical resource use from growth over the last forty years, and much of what advanced countries claim to have achieved in this regard is merely because they are not counting the environmental impacts they have effectively ‘exported’ to China and other countries from which they now import most of their polluting goods (Wiedmann et al. 2015, Hickel and Kallis 2020).
For such critics, the advocates of ‘green growth’ are clutching at straws at best, and guilty of dishonesty at worst: such growth not only has not been achieved, it cannot be achieved. It is time to acknowledge that, if we want to live on an environmentally healthy planet, GDP will have to decline. At least for high-income countries, there will have to be ‘degrowth’, that is, a progressive reduction in GDP levels (Latouche 2004, Kallis et al. 2012, Kallis 2017, Hickel 2020).
The advocates of green growth unsurprisingly have a retort to this: the fact that there has been up to now less ‘decoupling’ of growth from environmental damage than is sometimes claimed does not prove that it could not happen in the future. No advanced country has ever tried to reduce its environmental impacts sufficiently to achieve sustainable outcomes; if it made a really concerted effort to do so, it might be achievable. This is a contingent, empirical matter, they argue, for which the answer is not certain (van den Berg, 2011).
But a further argument is critical here. It matters how fast current environmental impacts have to be reduced to avoid tipping points and other catastrophic environmental impacts caused by past damage …
… As with the environment, the social critics of growth also split into two groups.
One group argues that historical and current patterns of economic growth have not produced, and do not produce, overall social benefit. They have led to unacceptable levels of inequality and poor levels of individual and social wellbeing. But it should nevertheless be possible to organize the economy and society in such a way as to have both growth and those social goods. The economy could achieve a much more equitable distribution of its fruits; it could prioritize full employment, with good, secure work and work-life balance; it could focus more on providing social goods and less on competitive individual consumption. With its particular attention to lower levels of inequality, this line of reasoning is often described as seeking inclusive growth (OECD 2021, Bhattacharya et al 2021).
The other group argues that growth in a capitalist society will always be based on the exploitation of labour and nature, and can therefore never properly generate overall social good (Foster 2011, Kallis 2018, Hickel 2020). The processes which generate growth inevitably generate inequality (especially between capital owners and workers, men and women, and different racial groups), along with degrading and precarious work, unemployment, various forms of consumption and social competition which make people miserable, and so on. For proponents of this view, the only way to achieve a better society is therefore to abandon, not just growth, but capitalism.
The environmental and social arguments come back together at this point. For those who see green or inclusive growth as impossible, the problem is not, fundamentally, economic growth. It is the capitalist economic system as a whole. Capitalism is a system geared towards capital accumulation, which both generates and requires growth in the overall value of output (GDP). It will therefore inevitably exploit every increase in labour and resource productivity to achieve output expansion (rather than, for example, to create more value from less output). In its pursuit of growth, capitalism will inevitably seek to push beyond planetary boundaries, and it will inevitably be based on unequal and exploitative economic relations and an acquisitive, competitive social ethos. A sustainable economy and healthy society can only be achieved if capitalism is abandoned (Klein 2014, Kallis 2018, Hickel 2020). …
… A typology of arguments – The foregoing arguments lead to seven different conclusions, as drawn by different authors. On the environmental side it is possible to identify four distinct positions:
E1. Economic growth improves welfare by raising household incomes and increasing public revenues which can be spent on public goods and services. Historically, and still, dominant patterns of growth have been and are environmentally damaging and unsustainable. But by changing the composition of output and consumption towards renewable energy sources, high levels of resource efficiency, non-polluting processes and a more circular economy, ‘green growth’ of GDP is possible. So policy should be focused on achieving this (OECD 2011, World Bank 2012; for a review see Jacobs 2013).
E2. Whether sustainable growth is possible or not is an empirical question. But no rate of GDP growth determines the level of environmental impact. So growth should not be a primary economic objective. Policy should focus rather on living within sustainable environmental limits or planetary boundaries (Jacobs 1991, Ekins 1993, van den Bergh 2011.). This could be achieved, for example, through a system of statutory policy targets and plans obligated by a ‘Sustainable Economy Act’ (Jacobs 2018). Growth may or may not be possible within these; but it is a subsidiary objective, so if it is not possible, that is of lesser concern.
E3. Though it might have been possible in the past, sustainable growth is almost certainly impossible today for advanced nations, given the speed that environmental impacts must be reduced, the existing slowdown in growth rates, and the needs of low-income nations to use the earth’s resources. Therefore we should not merely abandon growth as a primary economic objective and focus policy on achieving sustainable and just environmental limits. We should recognise that GDP growth is unlikely to be able to continue and adjust political expectations accordingly (Jackson, 2019, Parrique et al 2019).
E4. GDP growth today is inevitably environmentally unsustainable. Organising the economy and society to reduce environmental impacts to sustainable levels will therefore require a contraction of output and consumption, resulting in the ‘degrowth’ of GDP (Kallis 2011. 2018, Hickel and Kallis 2020, Kallis et al 2020).
On the social side, the same four positions can be identified, but the second and third are in practice generally combined:
S1. Economic growth improves welfare by raising household incomes and increasing public revenues which can be spent on public goods and services. Current patterns of growth have some social disbenefits. But economic reform can reduce these: by changing the composition of output (for example towards a higher level of public goods and welfare payments), its production methods (for example through more satisfying work), and distributional outcomes (for example by raising minimum wages and the more progressive taxation of wealth). In these ways growth can achieve higher levels of social wellbeing as measured by a range of indicators. The policy objective should be ‘inclusive growth’ (World Bank 2012, OECD 2021).
S2. Current patterns of growth are associated with higher inequality and various social ills such as poor mental health. The relentless pursuit of growth moreover imbues society with a culture of materialism, individualism and social competition which is corrosive of social cohesion and personal wellbeing. So growth is not only the wrong objective for policy; it is culturally damaging. Policy should focus instead on achieving social goods directly, rather than rely on growth to achieve them. In particular, this should include policies to achieve more equal outcomes and a focus on both individual and social wellbeing (Raworth 2017, Club of Rome, 2020, Wellbeing Alliance 2021, Jackson 2021).
S3. Growth is inextricably tied to capitalism, which inescapably generates inequality and other social harms in the process of capital accumulation. So capitalism needs to be abandoned, and society acculturated to a reduction in material consumption and output. This will result in ‘degrowth’ of GDP (Kallis, 2011, 2018, Kallis et al 2020).
… In terms of discourse, inclusive green growth and degrowth are opposing strategies. One accepts that growth occurs and has benefits, is politically hopeless to oppose and can be ameliorated today, and therefore adopts a discourse of growth modification. The other believes growth to be the core problem and only economic transformation will suffice, so adopts a discourse of anti-growth. But they share
a common feature. Both focus on the idea of growth.
A third political strategy is to abandon the growth discourse altogether. This is the position taken by a growing array of theorists and practitioners arguing for ‘a-growth’ (van den Bergh 2011), ‘beyond growth’ (OECD 2020) or more generally ‘post-growth’ (Jackson 2021). Beneath the labels
these positions are not all identical; some are closer to the inclusive green growth position, others to the degrowth one. But all share the desire to escape what they perceive to be the tired and politically unhelpful discourse of pro- and anti-growth, and to focus political and policy debate on the issues that will actually affect environmental and social outcomes.
At the core of the post-growth position is the argument that no rate of economic growth, whether positive, negative or zero, is automatically correlated either with social benefit or harm or environmental goods or ills (Jacobs 1991, van den Bergh 2011). It entirely depends what is growing,
and what is contracting, and how production and consumption are organized. It is therefore economically misleading, and politically unhelpful, to keep talking about growth and degrowth. Economic and political discourse needs to focus on what is being produced and how, and the impacts
being caused. Kate Raworth (2017) describes this position as being ‘growth agnostic’: it does not take an a priori or single position on growth, but wishes to see what the outcomes of any economic policies actually are. It seeks to design an economy to achieve substantive environmental and social goals, and does not much care whether these result in economic growth or not. The indicators used to judge economic progress should be those which measure the achievement of the substantive goals, not the aggregate level of traded activity (GDP), which cannot measure them.
… One of the striking features of the new ‘post-growth’ discourse is that it includes within it both people who regard growth as the wrongly framed objective but nevertheless value the benefits it can bring and believe that it might still be possible alongside the achievement of environmental and social goals (OECD 2020); and those who believe that sustainable growth is impossible (Jackson 2021). That is, in terms of our typology above, it encompasses positions E2, E3, S2 and S3.
Advocates of post-growth are nevertheless united in their insistence that achieving environmental sustainability and social goods cannot be achieved by incremental policy reforms or ex-post ameliorative measures. A much more fundamental transformation in the way economies work is required. As the OECD’s Beyond Growth report (2020) puts it, the goals of environmental sustainability, increased wellbeing, inequality reduction and system resilience will need to be ‘built into the structure of the economy from the outset, not simply hoped for as a by-product, or added after the event’
…”… one further group hovering on the outskirts of these debates. These are the explicitly left-wing political economists and writers interested in both environmental sustainability and in equality and wellbeing, but not particularly in the debate about growth. For want of an accepted
unifying label, we might call these the ‘post-capitalists’. For writers like Naomi Klein (2014), Yanis Varoufakis (2021a) and Paul Mason (2015), the issue is not primarily one of economic growth. It is one of economic organisation. Within a capitalist system of the present kind, neither sustainability nor general social welfare is achievable; the task is therefore to replace capitalism with a new economic and political order. Whether or not this would be able to reinstate GDP growth or not is a question most of these authors barely examine (though see Varoufakis 2021b); they take it as read that GDP is an indicator of capitalist performance, so are largely uninterested in it. In this sense they fall somewhere between the degrowth and post-growth positions.
CONCLUSION – Our argument here, therefore, is that ‘post-growth’ could become – or indeed may be becoming – a unifying concept for writers and practitioners whose primary and urgent goal is to shift policy and practice in the directions of environmental sustainability and social equity. Such people can differ in their view about how far GDP growth might or might not be possible in an economy focused on these priorities. But such differences are much less important than their points of agreement. These are that economic policy:
(i) should focus directly on operating within environmental limits or planetary boundaries;
(ii) should focus directly on providing a decent living standard for everyone, emphasising wellbeing, a reduction in inequality and resilience;
(iii) should cease to focus on economic growth as a policy objective per se, since none of these goals are achieved by any particular rate of growth;
(iv) should give priority to establishing systems and institutions that can provide meaningful work, incomes, pensions and social security without having to depend on economic growth.
It would be fair to say that ‘post-growth’ is not likely to become a political concept with wide popular appeal. So other terms will no doubt be required for the same set of ideas. Kate Raworth’s (2017) ‘doughnut’ has already provided a best-selling visual model and popularisation. Herman Daly’s (2005) concept of ‘uneconomic growth’ – growth whose costs outweigh its benefits – offers a neat critique of current growth patterns, allowing a popular distinction to be drawn between good and bad growth. The OECD (2020) report’s idea of going ‘beyond growth’ suggests helpfully that growth is too simplistic an objective and something more sophisticated and contemporary is needed. Whether through these routes or others, it is clear that the policy content of a ‘post-growth’ political economy still needs considerable elaboration. But in the post-growth discourse a new way forward may be found for an old debate, free of some of the dogmas and disagreements that have bedevilled it for half a century.
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…”…There is something airily apolitical about DeGrowth at times. But this naivete needs to be put in perspective. As Benedikt Schmitt reminds us “Scholarship on transformation … is challenged to formulate how change beyond growth-dependent and “capitalist” modes of social organization might unfold. Trapped between the double utopia of the current situation: While it is clearly an illusion that society can continue , fundamental change beyond capitalism seems equally implausible.”
Perhaps even more poignantly, the naiveties of alternative imagined futures should be compared to those of the present “realistic” status-quo-forever unfolding. Like imagine the existing global GDP economy progressing nicely and greenish along the present trajectory to eradicate poverty at $1.25 a day. Apparently it would take more than 100 years. And at a slightly more real $5 a day level, it would take 207 years. “Global GDP would have to increase to 175 times its present size, ” writes Jason Nickel, “…driving global per capita income up to $1.3 million. In other words, the average income would have to be $1.3 million per year simply so that the poorest two-thirds of humanity could earn $5 per day.” This “extremely optimistic scenario” is the best we can expect from the business-as-usual trajectory of the development industry…”…
…”…As to the money system requiring monetary growth derivatively divorced from “real value”, here is Mark Carney’s statement (later echoed by Rishi Sunak)
“We need to rewire our economies … not to be judged on style or black box ESG ratings …but hard numbers for true sustainability. … To make all this add up we must build a financial system entirely focused on net zero.”…ft.com 30/10/2021 Mark Carney
It is production that has got to go green, let alone fair. Not just the narratives of valuation but production itself. Production pre-cedes and feeds consumption. Ultimately to consume sustainably I need to consume sustainable products. Sustainable eco valued products replacing unsustainable ones is presumably part of any transition.
Measuring pollution via the personal footprint of consumption is to fall for a calculus that distracts from the real source of pollution, ie the product and its reproduction. When used as a metric for status rankings, personal eco-footprints turn into weapons of the divide-and-rule variety, unleashed perhaps by fears of overpopulation or product transparency?
It is products that need to be valued independently of price. I don’t want transparent people but transparent products. I don’t need to know about corporate commitments. I need to know the product’s composition. I don’t care about the brand’s philosophy but I want to know how much irresponsibly mined copper, non recyclable plastic and dehumanising labour are contained in my next electric toothbrush? I want hard ESG type numbers processed from real hard data to signal the product’s relative virtue for real. Or rather the anti-virtue or disutility in terms of global unsustainability. Read this as a story about paying back a loan from the planet, or more to the point: spelling out the costs to the products eco-social contextuals, ie ultimately the human planet. Think of it as the globe taxing the unsustainable processes of production. Many ways to do it. Plenty of precedents for turning debt into money. Including the monetary status quo with it’s 97% credit money.
Lately economists have rallied around a carbon tax. Having preached “Tax is Evil” for 50 years, perhaps not surprising no one has been listening to the new sermon. As Black Rock ESG dissident Tariq Fancy reminded us, this is capitalism, if you want to stop production of something, you got to make it unprofitable. So you tax it. …
… Carbon tax is better than zero tax, let alone the existing subsidies. Nonetheless the Davosian net zero ambitions smell of a fishy portfolio cop-out, externalising pollution to infidel investors or shell covered funds: “Ooops, I honestly never knew I still had money in slavery?” Unless net zero refers to the absolute global eco-physical balance it’s just privatised financial absolution: “I still use slaves but I don’t actually own them any longer?” That’s just part of why net zero is potentially counterproductive. Also there is a lot more to the climate crisis than carbon…”…
…”…Refreshing as Branco Milanovic’s contributions are relative to the irrelevance of can’t-do-macro 101 ortho-economics, he nonetheless fails to appreciate the gravity of economics having lost all measure of value. Positioned on the plinth of mainstream respectability he is generously eccentric to even engage with the naively unrealistic hetero doughnut economist Kate Raworth. Having praised her for being marginally more reasonable than most other curveball cranks, he nonetheless feels compelled to cite her “agnosticism on GdP” as undermining her “Doughnut Equilibrium Model”.
Such is the realistic gravity of Capitalism Alone. Infused with an apparently Leninist conviction in the necessary unfolding of history, one does not even bother to deny one is under the spell of TINA, in this case objectifying a 3rd-rate operational definition into the naturalised real: because GdP is the only metric we have, it must measure something relevant and real. Or at least correlate with it, as Tim Harford recently tried to reassure us...”…
…”… With her short sharp questions, Losmann drills her way through the particular perspectives of the participants to shed light on the trinity of money, debt and growth. Thanks to Losmann’s heterodox approach this trio is changing before our eyes. Since she does not burden herself with the orthodox bullionist or commodity theories of money, she travels unveiled on a chartalist credit card of debt-money: Debt is money and money is debt, as the case may be.
So the triptychon is dynamized into a ménage à trois, where perpetual growth drives the other two to grow in tandem, recurrently re-declaring themselves as either credit or debit. How exactly remains rather mysterious. It becomes clear, however, that wealth is made from owning debts and that as the amount of debt increases, the Matthew effect becomes a hockey stick. As an upper wealth advisor explains: with larger sums, even small percentages make a lot of extra wealth. … Mysterious as the motor of growth remains, making profits cannot be it. Depending on the level of education and positioning, the finance professionals have different views on how profits are made. But everyone agrees on one thing: you absolutely need growth…”…
Growth by Trussonomics may be history repeating a farce as a tragedy. But aggregate GDP-growth continues to be widely regarded as an absolute necessity. The recent article “Growth, Degrowth or Post-growth?” makes for a uniquely clear historical exposition of the positions around the critique of economic GdP-growth and its potential alternatives.