ICYMI Autumn 2022
A dialogue initiated by Halina Brown
A recent article on public acceptance of post-growth is posted on the SCORAI website. Lily Paulson and Milena Büchs of University of Leeds report that in their survey 60.5 percent of people in 34 European countries are in favor of post-growth. This attitude is associated with such values as environmentalism, collectivism and post-materialism, which in turn are held largely by people in a higher socioeconomic class (but not in a lower).
This is another piece of evidence that reducing the huge current inequalities in income, wealth and opportunity is a necessary step in seeking post-growth economy.
Joachim Spangenberg responded with questions raised by a post growth era:
Are we prepared for post growth? The economy will shrink, and with it the tax revenues, which will make financing a sustainable transformation even harder, and social compensation as well.
The core of the crisis we’re in is a transition crisis, with all decision makers (business, politics, economics) refusing to accept the new reality (see the growth prognoses of all business sectors, and the billions they invest in this futile hope instead of preparing for a new reality).
(Spangenberg, J.H., Kurz, R. 2022. Zeitenwende: Unbequeme Einsichten, ungewisse Aussichten. Politische Ökologie 169: 116-119). English translation attached.
If added value production is declining (to avoid the reference to GDP) in continuation of an enduring trend, and is now accelerated by the necessity of economically unproductive defensive expenditure (climate adaptation, biodiversity protection, cleaning up pollution, military expenditure), the ‘cake’ will be shrinking. So core questions are:
- If overall value production is declining, who will get what remains? Will we see higher taxation to finance public policies (health care, infrastructure, education, pensions, etc.) and reduce private profits? Or further accelerating wealth concentration, poverty and hunger also in the North, and a state deprived of the means to take measures which would be necessary to maintain its legitimacy?
- How much redistribution of wealth would be needed to finance the structural change towards a low resource consuming society that we need (low carbon high metal is no solution but a new incarnation of doomed techno-optimism)?
- If less value production happens, then most probably incomes will decrease. How do we avoid large scale poverty, and how do we convince people that less consumption is the right thing in a moment where consumption reduction is economically and painfully enforced upon them?
- What can we do to avoid that this experience of decline leads to even more extremist policy movements than the brexitism and trumpism we have already experienced? How do we avoid a neo-fascist wave in the affluent countries?
Essentially, there are two challenges if the analysis is correct that we have been entering a new era of humankind, after the 250 years of fossil fuelled economic growth
(1) How will a postgrowth, post fossil society look, how will we live together?
(2) How do we achieve that decision makers in politics, public services, business and many other sectors realise that we have reached a new era, and stop investing billions and trillions of ¥€$ in producing ever more stranded assets while depriving living and future generations of financial, physical and biological resources needed to establish the chance for a decent life IN the crisis (there is no shortcut OUT of the crisis.
The ideology of growth calls for 3, 4 or even 5 percent annual increases. The GDP growth we see today is partly illusory and entirely inadequate for the purposes that are (falsely) attributed to growth. At or below 0% is a socio-politically meaningless criteria. It is only a number just as “growth” itself is only a number and has an equivocal relationship to prosperity and wellbeing
The problem, as Martin Hägglund presents in This Life: Secular Life and Spiritual Freedom, is that our present society values an expenditure (labour time) as wealth. Leaving aside the usual objections about people getting a sense of achievement, etc. from their jobs, the calculation remains that the more time is spent working, the more materials are extracted from the earth, the productive activity is performed and augmented mechanically, the more wealth is produced.
We have been post-growth since the mid-1990s. The initial neo-liberal episode from the late 1970s to the mid 1990s fueled the fires of “growth” by burning the furniture (austerity, privatization, bailouts, union busting). Since the mid 1990s, one boom after another has been driven by asset inflation pumped up by central banks. Ballooning asset prices are not growth, they just show up as growth in the national income accounts. If you subtract “FIRE” (finance, insurance and real estate) from GDP, there has been very little real economic growth since the mid 1990s and virtually none per capita. In the real world, this translates into people working full-time who cannot afford to rent a studio apartment. That is all “growth” has come to mean — growing disparity between the price of assets and the incomes of workers.
My calculation, excluding FIRE, is a little under 1% (0.97%) annual real GDP growth per capita from 1997 to 2021 in the U.S. And that is with a falling rate of population increase; including FIRE: 1.26%.
Post-growth, even in the simple terms of GDP, must mean at or below zero. We certainly have not been there since the 1990s. Even with a 1% real GDP growth rate per capita in the US, that corresponds to about a 2% real growth rate. A 2% rate doubles the size of the GDP every 35 years, and quadruples it every 70 years. In contrast, a minus 1% real GDP growth rate would imply a 30% drop over 35 years. That is the minimum we need to achieve — fully 3% per year below where we have been — to claim “post-growth” status.
Furthermore, the world GDP has grown far faster over the last 30 years, so we are nowhere close to “post-growth” even using the GDP growth rate as a simple definition. Plus post-growth must include redistributing income to the poor, the opposite of which has happened. Plus population is nowhere near “post-growth”, and we just hit 8 billion people. So all of these bad trends and more must reverse to get to post-growth and zero CO2 emissions.
US “wellbeing” is dependent on a disproportionate resource consumption which may be purchased by its hegemony of the dollar as the reserve currency. That ability stems from the agreements at Bretton Woods in 1944 which set the dollar as the world reserve currency, and the subsequent ramifications in international agreements and its swap of military “security” in exchange for economic benefits. Nixon’s 1971 removal of Gold as the standard measure led to the market-based economy based on debt financing with the impact on resource extraction as Hagens has so well noted – borrowing from the future. The efforts to break the US hegemony of the dollar is becoming a reality as organizations such as BRICS, AIIB and others start to merger under the EAEU with a common alternative currency and the creation of global competition to VISA and Mastercard, for example. Add to that studies which show that a shift to a carbonless resource base fails under the current emphasis on economics whether “growth” or alternatives.
Martin Calisto Friant
As exemplified in this quote from Andre Gorz in his book Ecology as Politics: “Nothing—other than the logic of capitalism—prevents us from manufacturing and making available to everyone adequate accommodation, clothing, household equipment, and forms of transportation which are simple to repair, and long lasting, while simultaneously increasing the amount of free time and the amount of truly useful products available to the population.”
GDP growth is not just a metric, it is a structural necessity of the present capitalist system, without which it is dangerously unstable and becomes ever more unequal and exploitative (something we are already witnessing to some extent). This is why Andre Gorz and other degrowth thinkers are not only anti-GDP growth but also anti-capitalists. As opposed to a growth-dependent capitalist society, degrowth thinkers aspire for an eco-socialist or eco-anarchist system, which places social needs and ecological imperatives above economic growth. As André Gorz puts it in the above-mentioned book: “Today a lack of realism no longer consists in advocating greater well-being through the inversion of growth and the subversion of the prevailing way of life. Lack of realism consists in imagining that economic growth can still bring about increased human welfare, and indeed that it is still physically possible.” To be realistic, we must thus dare to imagine an entirely new post-capitalist society, which can reduce over-consumption in the global north in a planned and democratic manner and thereby reduce environmental pressures and social inequalities while improving human and planetary well-being.
To answer the question of what the world could look like and what future is more probable, desirable and likely, we recently wrote a short article where we visualized different visions of a growth-oriented and degrowth-oriented circular economy by 2050. We looked at the latest research on the topic and worked with an artist and illustrator to imagine 4 circular futures by 2050 with different types of governance, culture, industry, transport, agriculture, energy and overall social and economic systems. It could bring some valuable insights into the key questions posed by this thread:
When you are in ecological overshoot while you have unmet social needs and continued poverty, you have a few policy options:
One is the classic neoliberalist green capitalist approach to increase economic growth and decouple it from environmental impacts. This is obviously impossible as we have more than 50 years of research proving that absolute decoupling is neither happening nor will happen on a relevant scale to prevent climate breakdown and biodiversity collapse (see: iopscience.iop.org/article/10.1088/1748-9326/ab842a/meta). Everyone in this group thus knows that the capitalist green growth option is nothing more than a “fairy tale”.
The other option, is to redistribute wealth from those that grossly overshoot their fair share of planetary resources to those that still cannot meet their most basic needs (the richest 10% are responsible for over 48% of annual global GHG emissions while the poorest 50% are responsible for only 12% of global GHG emissions, see: wid.world/wp-content/uploads/2021/10/Chancel2021Carbon2110-1018.pdf). Research has found that we can provide a dignified life for 10 billion people within the means of the earth if we switch from a mass consumption capitalist way of life to a slower and more convivial way of life (see: doi.org/10.1016/j.gloenvcha.2020.102168).
So basically, what would you do if you are on a stranded ship with limited supplies? Would you count what resources you have left and distribute them fairly and equitably so everyone can survive? Or would you refrain from hampering with private property to redistribute the resources accumulated by a few, and thus allow a handful of people to survive in opulence, while everyone else starves?
Joe Zammit Lucia
In 1920 in the UK the top 1% had some 60% of the wealth. By 2015 it was 20% (which represented a marginal rise from the lowest point in around 1985. The net personal wealth share of the top 1% in Denmark has grown from 13.5% in 1980 to 21.6% in 2021 (almost identical to the UK (which does not have the same degree of social market model). The post tax share of income for the top 10% has grown from 21.6% to 27% over more or less the same period. The net personal wealth of the bottom 50% slid from 5.3% in 1980 to 4% in 2021.
As more people around the globe get more prosperous, material consumption will continue to soar. That circle is impossible to square. So, which do we want? And let’s stop pretending that we can have both.
The issue of inequality is not simple, since it depends on your measurements and your target group. Are we comparing wealth, income or percentage living in poverty? Do we include gender, ethnic, or rural/urban inequality? There is no question that the inequality between countries, measured by GDP per capita, child mortality, and average income has increased over the last 100 years (ourworldindata.org/global-economic-inequality). Comparing Edwardian England with the 21st century version is bound to show less inequality in wealth; but compare share of pretax national income from the top one percent of earners in the UK between 1980 and 2018, you see a rise from about 8% to 13 % (www.statista.com/statistics/1234074/top-one-percent-income-uk/) and that does not include the richest groups who have moved their wealth offshore to lower their tax burden. Or you can point out that as of 2020 there are 2.5 million people in the UK with assets over US$1 million, while many more millions have no assets at all. (www.statista.com/statistics/268411/countries-with-the-most-millionaires/)
Rich high-consumption countries are always trying to shift blame for rising Greenhouse Gas emissions to other countries, claiming that the real environmental hazard is the rising middle classes in previously poor countries. That argument has kept international action stalled since Kyoto. What is your solution? Keep them in poverty? Or try to leapfrog past prosperity based on cheap fossil fuels and continue to find ways to cut the link between living standards and carbon emissions.
Imagining a different system is not enough to affect change. Documenting further the problems with the current form of capitalism, and its dependency on GDP growth, is not enough. Saying “we told you so long time ago” is not enough. The question is: what needs to be done and can policy initiatives get it done?
Short of calling for a revolutionary change, we are probably stuck with the necessity of major policy interventions aimed at, in the first place, preventing the accumulation of wealth by a few at the expense of many. And in the second place, make it possible for most people to have an affordable roof over their heads and a basic source of livelihood. Is it possible? Is it feasible? Is it likely? Would restoring the social democracies of the 1950s to 70s achieve these aims in the era of less abundant energy and climate problem which calls for an economy not based on household consumption?