Contribution to GTI Roundtable "On Degrowth"
GTN is to be congratulated for stimulating the discussion of degrowth with this essay by Giorgos Kallis, with whom I have published on the benefits and difficulties of achieving a four-day workweek. I must confess that I had expressed to Kallis at the Barcelona meeting, the second Degrowth Conference, my concern that the term “degrowth” would probably be received negatively before its positive aspects were appreciated. I also do not agree that sustainable development is an oxymoron; it is sustainable growth that is an oxymoron, following on the important distinction Herman Daly draws between growth and development. For my part, a movement described as “confronting growth” might have accumulated less baggage in achieving that change. I am not yet willing to forgo sustainable development as a unifying all-encompassing construct.
Since writing my book Technology, Globalization, and Sustainable Development: Transforming the Industrial State, I have come to believe that “Transforming the Industrial State” would have better been the title, rather that the subtitle—and that it would better describe the degrowth movement. Some critics of the degrowth movement bemoan the fact that there is much there on what things have to change, but not much of a blueprint for how to change things.
I submit that there are two overarching areas that need to be addressed in achieving a fair, just, and nurturing society: (1) opening up the problem space so that interventions can address all areas which need improvement—environment, employment, economic welfare, social and political stability—and (2) opening up the political space so that all voices can be heard and governance by the economic and social elite does not drown out significant portions of society and continue to exacerbate the all-important mal-distributional effects of industrial and industrializing economies.
The Greek crisis in Europe and the recent attention paid to the increasing inequality of wealth are testimonials for the need to reform the financial institutions, laws, and practices that make progress in confronting growth all but impossible. The problems are not merely technical; they are political. Good ideas like a shorter workweek that retains work pay parity, decreases in energy and material content, less consumption by some (but more consumption by others), increases in wages, guaranteed minimum incomes, etc., cannot be achieved without these fundamental reforms.
We all know that products and services that are not only subsidized, but also do not include in their price the full environmental, social, and economic costs that they impart on the economy and individuals, are examples of distortions and negative externalities that result in too much being produced or offered. What does not seem to be appreciated is that unless public and private investment can capture the positive externalities of serving and servicing others, these investments are unlikely to be undertaken by investors. That is why either investment for the public good needs to be a willing cultural norm of a society, or government laws, regulations, and programs need to be fashioned to correct the fact that there are those who are deprived of essential goods, services, education, and employment because they are unable to pay for them. When van den Bergh offers that we ought to be concerned with what changes we want rather than focusing on growth per se, he has a point.
Governance entails not only full participation by all segments of society, but also the provisioning of essential benefits for all segments of society. I myself am not expecting the cultural revolution that others seem to hope for. Confronting the growth paradigm requires understanding fully who benefits from the current practices and who does not, or cannot. It requires us to understand who is gaming the present system and who is standing in the way of change, and then a society has to care. That caring has often worked in small communities to bring about change, but given the overwhelming influence that increasingly concentrated wealth plays in political, economic, and international decisions at a larger scale, it will take more than wishful thinking to bring about change. Systems thinking is essential, lest suggested single-purpose reforms—like only raising the minimum wage—simply move chairs on the economic Titanic.
Before reform of the production and consumption system is possible, there has to be reform of the financial system. Perhaps it is fortunate that we do not have a single one-world government. This allows for communities and individuals to experiment and to demonstrate that there are more equitable, just, and nurturing ways to organize the economy. Then, perhaps, others will want to emulate it.
It may seem far afield to argue that watching how the Greek crisis unfolds may tell us a great deal about an unfair and destructive market and financial system that should not be allowed to destroy a country and a people. The Troika are concerned about the ratio of Greece’s debt to GDP, but all they have managed to do is reduce the debt while reducing essential growth even more. Some kinds of growth we do need; others we do not. Some kinds of degrowth we need; others we do not. Greece needs growth in essential goods in services, employment, and social stability. This is not achievable by financial transfers that only reduce the debt owed to the financial speculators represented by the Troika.
Regarding Giorgos Kallis’ essay, as a practical matter, I am not convinced whether we will ever achieve a “viable “alternative to capitalism” or “an exit from the economy,” but capitalism within limits and with a more human face with attention paid to the redistribution of economic and political power could be achieved. Fostering a deeper understanding of options for the industrial and industrial state is the place to begin. My own personal view is that the creation of financially and personally rewarding and meaningful work, in combination with more widespread individual capital ownership to create a second mechanism to enhance earning capacity, is the first programmatic intervention that is needed. Certainly in today’s global climate, as long as employment is in dire straits (large and insecure unemployment and underemployment, with wages that represent decreasing purchasing power), expenditures and technical changes leading to a better environment should not be expected. I would not join the doomsayers that say we are on the road to destruction, but we have been on the road to fracturing and dividing society along economic and political fault lines and hollowing out the middle class—and that is not a very pretty sight. The expansion of Northern-style growth in the Global South (and population growth too) may very well dwarf anything that can be done soon enough in the North. That is why we must engineer a different model for the South to emulate and provide financial and technical assistance in its global adoption. Confronting growth and transforming the industrial state could unite us in that effort.