I very much appreciated Giorgos Kallis’s piece and the resultant discussion. My take on economic growth is somewhat different from what Kallis articulates. In broad terms, if degrowth means comfort with slow growth, I welcome it, but I do not think that economic contraction is either necessary or likely.
I am agnostic about economic growth measured monetarily so long as growth in energy and use of raw materials is reversed. I accept studies by the Wuppertal Institute suggesting that this is possible. I think it could be achieved using “throughput” taxes on energy and material inputs and waste outputs. Such a view is a very long way from neoliberal approaches to economic policy, but it does leave some room for economic growth and for some form of capitalism.
Would successfully capping energy and material throughputs halt economic growth? In the end, I am open to the possibility of what Herman Daly calls “angelized” GNP. That is, declining material throughputs do not exclude the possibility of slowly growing economies, at least for the next twenty to fifty years.
Some products, services, and sectors would, of course, shrink significantly—including mining, fossil energy, airline travel, cross-planetary shipping of heavy, low-cost goods, and the like. Other relatively benign sectors would not be severely impacted (though they would adapt by shifting towards new production methods, more durable products, and recycled inputs).
The third category is where things get interesting. Again, my take differs somewhat from that of Kallis. He sees local food, renewable energy, and human-to-human care as within the degrowth paradigm. I would add to his list other sectors including new media. Kallis sees these undertakings as often demonetized and not-for-profit undertakings. I see them as just as often entrepreneurial, usually small-scale.
I know many people engaged in such activities. I patronize their businesses and have invested in them (or donated in the case of non-for-profit ventures). None of the enterprises that I know most intimately produce what anyone would call wealth, but those involved would not be appalled at making a profit. Most, but not all, of those engaged with these enterprises are environmentally inclined (and politically left-of-center).
The way I have come to understand this “new economy” is not as anti-capitalist, or degrowth. It is a new economic realm that provides meaningful work often where it is desperately needed—among the young. Those involved are open to earning a good living, but are equally intent on balancing that objective with socially and environmentally-minded considerations. On a more theoretical plane, I have come to distinguish between the established corporate-dominated economy and new entrepreneurship led by environmentally and socially mindful organizations.
I think Kallis and I agree on the main point of distinction for this new sector: it is important because its activities are relatively benign environmentally and it fills material needs that sectors that must decline presently provide. The new enterprises provide those goods and services with greatly reduced inputs of energy and raw materials, including land. Those needed goods and services include food, shelter, and transportation. The food is primarily plant-based, local, and organic; the shelter urban rather than suburban; and the transportation transit or active transportation options, not travel dominated by automobiles and air travel.
The sector for me includes the economic activities that Kallis includes but also the production and servicing of windmills, solar panels, bicycles, bicycle and walking infrastructure, energy efficient multi-family urban dwellings, transit systems, and even small electric cars (leaving it up to users to use them with restraint). Not all of these enterprises are necessarily small, though, like local agriculture, solar panel installers, and wind energy co-ops, many are.
Reconfigured, post-suburban neighborhoods hardly need automobiles. The enterprises that rebuild neighborhoods, and supply the materials to do so, are expanding. Given that a high proportion of those that live in such places (and more and more are doing so) will not need automobiles on a daily basis, some sectors will shrink. Two of my three adult children do not even have driver’s licenses. Yet zip cars and the like are increasingly available in most urban neighborhoods. Car production will not disappear, nor need it. The number employed in food production is again growing.
Will the net result of these many shifts be growth or degrowth? I am agnostic; I just do not think we can know in advance. We know that many large corporations will be challenged and some will disappear. Capitalism itself (in some form) may well, however, survive. The speed at which entrepreneurs can adapt is important to changing an economy. Our greatest challenge is to find ways to keep large corporations from almost literally owning governments and blocking needed changes. If allowed to innovate and adapt, humans are very good at finding alternative ways to meet human needs, and even human whims.
As an initiative for collectively understanding and shaping the global future, GTI welcomes diverse ideas. Thus, the opinions expressed in our publications do not necessarily reflect the views of GTI or the Tellus Institute.