Blair Reid and Ollie Ryder-Green explore the timely rise of Degrowth economics
Economic growth has long been touted as the driving force behind human prosperity. As such, theorising about growth has become a major preoccupation for the modern economist. Policymakers have become deeply enamoured with growth, measuring progress in percent and letting decimals dictate success. Yet increased awareness about the dependency of our economic lives on the environment has reified a sense of unease for many individuals as they come to realise that ‘limitless’ economic growth comes at a steep environmental cost. Some now question the rationale in continuing to promote an economic system that places such strain on our fragile environment. Some have gone further, challenging the notion that economic growth has a direct positive impact on human well-being. All this has culminated in the Degrowth movement: a growth-sceptic collective that offers a radical alternative to the conventional approach to growth currently dominating economic thought.
The growth of Degrowth
Degrowth has roots in the work of 20th-century thinkers like Nicholas Georgescu-Roegen, one of the first economists to attempt to merge economic theory with physical reality — something which has been tried only sparingly since. Georgescu-Roegen argued that economic processes are simply transformations of Earth’s energy. As innocuous as this might sound, Georgescu-Roegen made stark predictions about a planet consumed and exhausted by economic activity. Degrowthers are wary of such a future.
Instead of a structural shift to sustainability, Degrowth demands a fundamental change in societal values. The movement is defined less by a desire to set growth rates equal to zero than it is by a view to abolish them entirely. Degrowthers will tell you that the roots of consumerism and productivism run deep and rather than bringing GDP indices to an abrupt halt, uprooting these deep-set beliefs will require a healthy dose of introspection among businesses, consumers, and—if they prove capable—politicians. Proponents of Degrowth highlight the shortcomings of GDP targeting and much maligned neoclassical theory; they cite rising inequality, flat living standards, and impending environmental catastrophe as direct consequences of an incessant political and economic fixation on growth. If the status quo is secular stagnation, then the alternative, degrowthers propose, is to focus on concrete measures that improve wellbeing, such as healthcare and education, redistribute wealth and limit superfluous consumption. Degrowthers suggest we step sideways rather than forwards on the hedonic path to prosperity.
There’s a hole in your theory
If the good life beyond growth sounds untenable, some prominent thinkers in the Degrowth movement would faithfully disagree. Most notable is Kate Raworth, whose Doughnut Economics brought Degrowth to the mainstream. Raworth’s Doughnut is typical of Degrowth models—although self-respecting degrowthers are reluctant to use the term; instead, they prefer ‘frameworks’ or ‘visions’. It involves no niggly equations or abstract assumptions. Instead, there is an easy-to-interpret graphical representation of a Goldilocks zone of economic prosperity, in which society’s basic needs are met and ecological boundaries are not exceeded. This maintainable middle-ground is proof of a future in which human prosperity fits neatly within the capacity of the planet. Sceptics are not so convinced.
Critics of Degrowth point to a lack of complexity in the theory and a failure to provide a compelling response to the large-scale unemployment that would inevitably accompany the economic contraction advocated for; the distributional impacts of which may actually hurt rather than help the poor. Giorgios Kallis, a prominent Degrowth academic, suggests a combination of work sharing and universal basic income to resolve this issue but neither seem feasible in the wake of a pandemic that has decimated the labour market. The arguments of degrowthers unsurprisingly rub many eminent economists the wrong way; the late Wilfried Beckerman, an early critic, staunchly defended growth and rejected the notion of resource depletion. He, like many others, believed instead in the power of the market to provide the incentives necessary to fuel innovation. In Beckerman’s words, small is stupid.
Get real or grow up
Degrowthers argue that there are no real alternatives to the theory. All growth is bad growth. The relatively recent explosion in the use of renewables does, however, make Degrowth’s doubts about ‘green growth’ appear more tenuous. The claim we should abandon any and all growth is undeniably drastic; other economists suggest instead an agnostic approach to growth to discourage governments from obsessing over growth rates and give them license to put human prosperity ahead of sustained economic growth.
Alternative approaches to growth that don’t require a complete rewriting of economic theory have obvious appeal. However, the arguments of Degrowth can be seen as changing the conception of economic progress; they are not an attempt at producing an oven-ready theoretical framework to replace almost 300 years of economic thought—an assumption that even most economists could not stomach.
What may be digestible for economists, politicians, and society at large remains to be seen. In our view, it is clear that Degrowth does not provide all the answers, but it is asking the right questions. Time will tell whether established economics has been listening.