I read some disturbing research over the weekend about the rapidly declining terrestrial water storage…
The achievement of a degrowth future requires system change not green new deals
When I was just coming into adulthood (1972), the – Club of Rome – published its famous – The Limits to Growth – which focused on the consequences of “exponential economic and population growth with a finite supply of resources”. It was a very influential research document generally, but also very important in shaping the way I would think about the world. The critics were many and the fossil fuel industry lobbying powerful and while the ideas did move policy makers somewhat and motivated new movements or gave impetus to existing bodies, such as the – Zero population growth – organisation, the vital message was largely ignored. Even the more recent green-oriented activism has not seen fit to focus on population growth as the primary problem that has to be addressed, if all the other problems of excessive energy use are to be dealt with effectively. Marxists were also very critical of the Club of Rome report for reasons that always escaped me. They criticised the Club’s focus on overpopulation, claiming it distracted us from the real problem, which was the voracious logic of the Capitalism system of production and accumulation. I always thought those attacks were unhelpful and allowed the progressive (Left) response to climate change to be fractured and, hence, weakened.
At present, I am working on several projects, one being outlining a blueprint for a degrowth strategy.
The issue that I keep coming back to though as I work on this topic is the logic of Capitalism.
The Green movement and many governments are caught up in a sort of denial of this logic.
They seem to think that the introduction of ‘green technology’ will provide the pathway to more efficient use of resources and energy, which will reduce carbon emissions and save the day.
To some extent, that is happening.
But long ago, British economist – William Stanley Jevons – outlined the phenomena that has become known as the – Jevons paradox – where:
… technological advancements make a resource more efficient to use (thereby reducing the amount needed for a single application); however, as the cost of using the resource drops, if demand is highly price elastic, this results in overall demand increasing, causing total resource consumption to rise.
Put simply, lowering production and user costs with, for example, clean energy will not lead to lower growth rates, but more likely the opposite.
Current editor of progressive US journal Monthly Review – John Bellamy Foster – captured this problem well in his 2011 article – Capitalism and Degrowth: An Impossibility Theorem
In the June 1989 issue of the – Monthly Review – American economist – Paul Sweezy – published an article – Capitalism and the Environment – which represented a major Marxist statement on the issue that is now discussed daily in our media and our lives generally.
John Kenneth Galbraith – called Paul Sweezy “the most noted American Marxist scholar” on his era.
His work was certainly captivating and I personally have taken a lot from it over the course of my career.
In the cited article, Paul Sweezy noted that:
… it is by no means certain that the essential conditions for the survival and development of civilized society as we know it today will continue to exist.
He argued that up until the modern era (remember he was writing more than three decades ago), the environmental “destruction by human agency: has been “small compared to the size of the environment as a whole”.
But that has now changed.
First, we saw the devastation that the atomic bomb can cause (circa the mass war crimes inflicted by the US on the Japanese on August 6 and August 9, 1945).
Paul Sweezy saw these events as marking a shift in our awareness of existential insecurity and said that:
Once you know for certain that human agency can render the planet unfit for human habitation, you can hardly help asking whether nuclear weapons are the only possible source of such a catastrophe.
And the byproducts of what we call “progress”, which for decades were largely ignored, unless the negative impacts were felt by the rich, are now front and centre of the debate and providing a major counterweight to the growth narrative.
As Paul Sweezy was writing (1989), there was a strong lobby encouraging us to ignore the Club of Rome and ensuing warnings.
Many high profile commentators claimed that the warnings of a climate-induced ‘Armageddon’ were gross exaggerations.
Even today that line is run by conservatives – who are not really conserving anything other than their political positions and the interests of the fossil fuel lobby they serve.
For example, over the past week, the conservative coalition (in opposition) in Australia has voted to abandon any emissions targets and are set to start providing state subsidies to companies that are still relying on coal to generate electricity.
One critic said of the decision by the main opposition parties: “To fight against net zero is fighting against gravity” (Source).
When they were in government last (2013-2022), the conservatives undermined any attempts to address climate change, which has held back Australia from making a smooth transition to renewables and made the costs of such a shift much higher.
These deniers have always been around though as Paul Sweezy noted.
But the evidence is overwhelmingly against such views.
Even when Paul Sweezy was writing the article he said that – “There is a vast literature on this subject, much of it of high quality” that points to the urgency of the problem of environmental overload and deterioration.
Importantly, the literature suggested that:
… by far the largest part of the problem has its origin in the functioning of the world’s economy as it has developed in the last three or four centuries. This of course has been the period of the emergence of capitalism and of the bourgeois and industrial revolutions, of coal and steam and railroads, of steel and electricity and chemicals, of petroleum and the automobile, of mechanized and chemicalized agriculture—and of the rapid expansion and urbanization of the world’s population in response to the massive growth of the forces of production at the disposal of humankind.
The question then is whether we can disentangle the impacts from the technological and industrial changes from the mode of production itself.
To some extent the industrial history of the Soviet system suggests that large-scale industrialisation feeding mass consumption will create environmental deterioration no matter how the surplus is distributed (Soviet socialism or Capitalism).
But that is only part of the story.
The Soviet system, for example, was really a form of Capitalism, in the sense that economic growth and accumulation was a motivating dynamic that the system was designed to produce.
The problem is in Paul Sweezy’s words that:
Since there is no way to increase the capacity of the environment to bear the burdens placed on it, it follows that the adjustment must come entirely from the other side of the equation. And since the disequilibrium has already reached dangerous proportions, it also follows that what is essential for success is a reversal, not merely a slowing down, of the underlying trends of the last few centuries.
So what does that mean?
Obviously a reduction in the material demands engendered by economic activity on the environmental resources.
The classic 1971 work of – Nicholas Georgescu-Roegen – The Entropy Law and the Economic Process – began by noting that:
The whole truth is that economics, in the way this discipline is now ‘generally professed, is mechanistic in the same strong sense in which we generally believe only Classical mechanics to be.
That still holds today and means that the economists cannot “account for the existence of enduring qualitative changes in nature nor accept this existence as an independent fact.”
Nicholas Georgescu-Roegen’s work laid the foundation for the emergence of ecological economics.
But while recognition of the problem may lead to policies that accelerate the use of less damaging technologies etc, and humans might reduce their own consumption propensities, the problem still remains, degrowth runs counter to the intrinsic logic of Capitalism.
That is the essence of Paul Sweezy’s 1989 contribution.
On Capitalism, he wrote:
Despite all the dramatic changes, however, the system remains in essence what it was at its birth, a juggernaut driven by the concentrated energy of individuals and small groups single-mindedly pursuing their own interests, checked only by their mutual competition, and controlled in the short run by the impersonal forces of the market and in the longer run, when the market fails, by devastating crises. Implicit in the very concept of this system are interlocked and enormously powerful drives to both creation and destruction. On the plus side, the creative drive relates to what humankind can get out of nature for its own uses; on the negative side, the destructive drive bears most heavily on nature’s capacity to respond to the demands placed on it.
He conjectures that “sooner or later … these two drives are contradictory and incompatible”.
The problem is that there is no inherent stabilising forces that “could curb its destructive drive and at the same time transform its creative drive into a benign environmental force”.
It defies the logic of Capitalism to think that we will achieve degrowth within its institutions.
Capitalism is more than a system for “satisfying human needs” – many different forms of economic organisation could achieve that end.
But Capitalism goes beyond that purpose – because it is not really its intrinsic purpose anyway.
The intrinsic purpose is its “obsession with capital accumulation” – to enrich the small elites and that purpose is never ending and always under challenge – so it “never stands still”.
Marx and Engels recognised this uneasy state even in the C19th as capital penetrated new countries and turned more and more human activity into surplus-generating labour processes.
And the “natural environment … is not as something to be cherished and enjoyed but as a means to the paramount ends of profit-making and still more capital accumulation.”
Paul Sweezy calls this Capitalism’s “inner nature”.
John Bellamy Foster’s article (cited above) examines that conflict.
He considers that the early degrowth literature published by French economist – Serge Latouche – and considered to be seminal to the emergence of the degrowth movement – failed to articulate a coherent position on this issue.
Serge Latouche thinks that “a society based on economic contraction cannot exist under capitalism” but abandoning capitalism would “plunge society into chaos”.
Instead, he wanted to “find another way out of development … and growth” that does not end capitalism.
This early view that “eco-compatible capitalism is conceivable” has influenced and guided many more recent degrowth researchers and commentators and led to the belief that a “Keynesian” state could regulate a social democracy to deliver such compatibility.
Effectively, even mainstream economists think that if we price “pollution” properly into products then the market will see an environmentally preferred solution.
But this view fails, just like much of the mainstream ecological economics fails because it considers the natural environment (a biosphere) to be like any resource that can be used more or less depending on the dictates of the market price system.
The folly of this mainstream view is the biosystems can die – and economists have no idea of when we reach the point when such death occurs.
There is no infinite trade-off in this context and so the market will fail in the most destructive and catastrophic way imaginable.
The Latouche-type thinking also integrates with the ‘basic income’ movement such that it is considered a legitimate progressive strategy to introduce green technology that displaces millions of workers from their jobs and provide income security through the government handout.
Meanwhile capitalist accumulation can continue along its ‘green’ path because the system has rendered millions of workers surplus to the accumulation process except by ensuring they remain ‘consumption’ units eking out a material existence on the pittance called a basic income.
The problem that Marxists like Paul Sweezy and John Bellamy Foster correctly point out is that these ‘green’ initiatives do not challenge the Capitalist drive for accumulation and as long as capital is dominant and can manipulate political processes, we will not get very far.
Capital will turn these green initiatives into just alternative accumulation devices.
As I see it the degrowth camp (of which I am in) has three challenges:
1. Reducing energy consumption – this is a technology challenge.
2. Reducing mass consumption while ensuring poverty is reduced – this is a social challenge.
3. Destroying the logic of capital accumulation – this is the system ending challenge.
Most green growth activists focus on 1 and 2.
But making progress on those fronts can never deliver functional degrowth even if they reduce our claims on the biosphere somewhat.
Only pursuing and achieving 3 will deliver the ends we desire.
Conclusion
This is an on-going project.
That is enough for today!
(c) Copyright 2025 William Mitchell. All Rights Reserved.
A dysfunctional system combined with exponential population growth was always going to lead us to this point, amply illustrated in many publications since Limits to Growth. Coupled with the excesses and wastefulness of the human enterprise and personal failings – the lust for greed and power – there could not be any other outcome.
Do you have any faith that humanity can change it’s addictions?
Basically, degrowth just means living within our means, individually and collectively.
Seems simple enough ………. but it is extremely difficult to be optimistic.
I do see reducing energy consumption as requiring more of a social and attitudinal challenge as technological.
We already have all the technological tools we need, but none of the essential outlook and value system.
Gramsci’s words are prophetic here –
“The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”
If Tainter is right, that it is increasing social complexity which becomes unsustainable and leads to the collapse of civilisations, then that will mean that breakdown is inevitable and not able to be a managed conversion.
The current state of progress in the net zero transition – and which is an existential crisis – seems to be confirming that collective inability.
Sadly, all the power balances in the current oligarchical system seem to be pointing towards collapse rather than an orderly societal transformation.
“The old world is dying, and the new world struggles to be born; now is the time of monsters.”
(Gramsci again)
Must stop calling the ugly right “conservatives” when they are actually reactionaries. As ever, language matters and to call them conservative provides something of a mind’s eye imprimatur of respectability that is entirely unwarranted considering their anti-science beliefs, propaganda and actions. The mis-described propaganda expression of a broad church, here in Australia, has contracted to a rabid right wing reactionary rump. The Labor Party has moved evermore to the right to occupy ideological territory left vacant while ejecting any semblance of a progressive left wing, which has departed to the Greens and elsewhere.
We are living in an era of human life on earth that has never previously existed, all because of the application of fossil fuel energy without regard to any of its detrimental effects. All this has happened in the blinking of an eye over the last 250 years, culminating in the beyond belief technologies and exploitations of today. To look at all of that without regard to the significance of the magnitude and growth rate of the human population is a total absurdity.
There is no doubt that the work Georgescu-Roegen is a major component in the advance of entropy/ecological economics but I assert that we need to go back to the earlier writings of Erasmus Peshine Smith, with his introduction of energy as an essential to economic production, and then forward to the writings of Frederick Soddy, in the time of Keynes, who also wrote of entropy and thermodynamics as vital to all of production, as the foundations for Georgescu-Roegen’s dot joining.
I completely agree that capitalism and our prospects for survival on this planet are incompatible. Of course humans aren’t going to change that because of reasoned critical thought, or perhaps we might after it all turns to Mad Max and if anything coherent can then be organised. But, of course, there are no grownups, except perhaps you and I, who continue to play the status games of the schoolyard where they remain frozen in time. Nothing will change without overturning the system and the problem is us with our neanderthal thinking in an era of technical advances beyond our collective brains abilities.
To quote another: “Being wrong together is acceptable; being right alone is risky and punishable.”
Considering that westernised societies are currently inflicting a massive extermination crisis on nonhuman lives (some indigenous folk are referring to it as a genocide) it beggars belief that so many imagine that they can continue living an ecologically unsustainable, consumption driven life style.
Fredric Jameson was so right when he wrote that “It seems to be easier for us today to imagine the thorough deterioration of the earth and nature than the breakdown of late capitalism; perhaps that is due to some weakness in our imaginations.”
I have just finished reading Thea Riofrancos’s Extraction: The Frontiers of Green Capitalism (2025) which is essentially about the continued environmental destruction which will continue, even with renewables, if society expects to maintain the current levels of consumption, from energy use right through the chain.
Less is More: How Degrowth Will Save the World, by Jason Hickel is also worth studying.
also anything by John Bellamy Foster; I did find his The Ecological Rift: Capitalism’s War on the Earth one of the best books on what is being done to Earth. He and co-authors Brett Clark, and Richard York are far less anthropocentric in their analyses than many others writing in the field.
Looking forward to our contribution, Bill.
Best wishes
Bill. I welcome your efforts, but I urge you strongly to consider that we are already in degrowth. A certain amount of climate change is already locked in, bio-diversity is on the point of collapse. On the positive side, energy resources are on the point of decline, and renewables are not going to fix that. Human fertility is declining, and could bottom out by mid-century. The problem is not bringing about degrowth, but riding it out.
It seems to me that Capitalism is essentially a system of property rights. It’s difficult to imagine a gradual approach to ending Capitalism that doesn’t change this. Worker ownership is one way and no doubt there are others. But absentee ownership must be phased out.
Bill, your commitment to degrowth/postgrowth will encourage the (small) environmental and new economics NGOs already discussing this transdisciplinary issue. Groups active in Australia include the NSW chapter of Centre for the Advancement of the Steady State Economy (CASSE NSW), Economic Reform Australia, Rethinking Economics Australia and New Economy Network Australia.
No doubt you are familiar with the work of leading European researchers Jason Hickel, Giorgos Kallis and Julia Steinberger.
All of the above people and groups are working for system change. Several value the insights from MMT on funding change, however they may lack your knowledge of critiques of capitalism. It seems to me that one approach to weakening the credibility of capitalism is to focus on terminating its extreme form, neoliberalism, which failed during the 2008 Global Financial Crisis and again during the COVID pandemic.
Capitalism or whatever-ism is an overlay on the law. It is the law that establishes property rights and which was devised by the elites, upon eliminating the crown, to protect their property rights, first and foremost. The law as established was dressed up in language and legislation to make it acceptable to the masses and propagandised under the moniker of such as freedom, individual rights, blah, blah, blah but then has strayed into the realm of universal human rights and even ideas like a just war (haven’t seen many of those in recent times). Many may have noticed how established laws are easily dismissed by those in charge when it suits their political and/or financial purpose while continuing to protect elites.
Designing the system sets the rules. Those that prosper under any system use the rules for their benefit and will, over time, invariably try to modify the rules using their power to further increase their benefits as compared with others.
Many times I have read the millenarian prophecies of degrowth proponents. They often decry the current system and its trappings and call for its replacement. However, I have yet to encounter a *positive* programme of the degrowth people.
How specifially do you want to achieve degrowth? How will the society look like once it is achieved? What are the pros? What are the cons? Can it be done on a national level or should it be global?
If these questions are not answer in a satisfactory way, the degrowth movement will remain an exotic ofshoot of, well, not even Marxism, but leftism broadly understood as “anti-capitalism”, a modern reincarnation of Luddite reaction.
Jędrzej: I’ve got news for you, Jędrzej. With a global Ecological Footprint 80% larger than global Biocapacity (and rising) and with 8.25 billion mouths to feed (and rising), degrowth is coming whether you like it or not. Without a managed degrowth response by all the countries which already have far more physical stuff than is required for their populations to live a decent and meaningful life, and efforts by many countries to cease population growth (some of which don’t have enough physical stuff for their populations to live a decent life), ecological systems will unenviably collapse and socio-economic systems, which depend on them, will too. That’s if socio-economic systems don’t first collapse from all the pressures that an excessively large human presence on Earth is already creating.
It’s either degrowth by managed and peaceful design or degrowth by disaster. The latter will be something you wouldn’t want to be around to experience. The former can be one, if appropriately managed during the initial transition phase and later when we have a qualitatively improving steady-state (physically non-growing), that is ecologically sustainable and allows human beings to thrive.
You ask about the pros and cons of a degrowth transition, presumably to a steady-state economy (SSE) because no serious degrowther is advocating a continuously shrinking economy (which is in itself unsustainable). First, let’s look at the pros and cons of a growing economy. Again, no serious degrowther is denying that growth does not generate additional benefits, although ‘happiness’ studies indicate that happiness in wealthy nations hasn’t increased for decades despite near continuous increases in per capita GDP (the USA was happiest in 1957). So, if a degrowther is forced to concede that growth brings with it additional benefits, a growthist must concede that these additional benefits (marginal benefits, as economists call them) are small in all but impoverished nations.
All benefits come at a cost. If growth generates additional benefits, it also incurs additional costs (marginal costs). You’d think that the economics profession, given that a comparison of marginal benefits and marginal costs dominates their microeconomic thinking (utility-maximisation, the income-leisure trade-off, and profit-maximisation – constrained optimisation, more generally), would be motivated at some point to identify, measure, and compare the benefits and costs of economic activity at the macroeconomic level to determine whether economies are nearing or exceeding their ‘optimal’ physical scale. But, no. Suggest to most economists that a firm should continue to increase production if its revenue rises from the sale of a greater volume of output, and they’ll laugh at you. They’ll tell you that you need to compare the rising revenue (marginal revenue) with the rising costs (marginal costs), of which they claim the latter will increase at an increasing rate, and that a firm should cease to increase production when MB and MC are the same because it maximises the firm’s profits. Go beyond that, they say, and profits decline – the growth is ‘uneconomic’ (MB MC at the macro level, and a decline in the per capita GPI implies MB < MC. I might point out that any doubts about marginal costs rising at the micro (firm) level do not apply at the macro level. They certainly do, as GPI studies show.
And what do GPI studies reveal? You guessed it – the per capita GPI rises in line with increases in per capita GDP up to a point and then, despite per capita GDP rising beyond this point, the per capita GPI levels off. In the case of some countries, the per capita GPI declines. So, if the economics profession was to get behind the GPI, or something like it, we would now have a macroeconomic indicator to support the happiness studies. Unfortunately, most economists are so firmly wedded to the continuous growth mentality – in large part because they have an infantile understanding of economy-environment relations and therefore any recognition of biophysical limits to continuous growth – that they wouldn't dare think of it. Politicians aren't interested either. When you can present a line to the public that continues to slope upwards (per capita GDP), you're not going to present a line that flat-lines or declines (per capita GPI). Far too much of a 'bad news' indicator to ever see the light of day.
So, what are the pros and cons of degrowth? Well, apart from bringing about an economy that is ecologically sustainable – which the global economy is not a present – it would bring down a lot of costs. It would probably bring down some benefits, but not that much given that marginal benefits are small, but we could always increase the benefits generated by a SSE by improving the quality of the stock of physical stuff of which a SSE would be comprised (i.e., increase the GPI without increasing GDP). We could also use the technology that reduces the throughput-intensity of GDP to reduce the total rate of throughput and therefore the ecological demands to maintain a SSE (i.e., lower costs and increase the GPI without increasing GDP) rather than use the resource-savings to further increase GDP, thus avoiding the rebound effect that has resulted in the global Ecological Footprint doubling over the past fifty years despite the Ecological Footprint-intensity of Gross World Product halving. Growth is a choice. It's never an imperative.
Quite simple when you think about it, but very difficult to accept or even contemplate if you've read mainstream economics textbooks while doing an Economics degree. Sheer unscientific nonsense passed on by generations of mainstream economists and swallowed by impressionable late-teenagers.
Bill Mitchel has often written about the importance of “framing” when discussing MMT and economics. The whole ‘Degrowth debate’ is an example of very poor framing by advocates in my opinion. Whether they understand MMT or not. And most of the ones I have read don’t seem to.
You can start with the term ‘Degrowth’- it is a terrible name to give to policies that you are advocating for- even if you are correct in asserting that global GDP must inevitably decline in order to avoid environmental catastrophe. If what you want is for people to change their behavior maybe some more time should be given to the positive outcomes associated with that change. And stop calling it ‘degrowth’ when that term is as associated with declines in living standards as it is. Call it ‘intelligent growth’ or ‘greening the planet’ or some such thing. Unless your message is we are all doomed anyway no matter what anyone does. In which case no one is going to bother changing anything.
I think Jędrzej at 20:28 raises a good point.
Jerry Brown: You’ve got to be kidding! Replace ‘degrowth’ with ‘intelligent growth’ or ‘greening the planet”!! It’s not growth at all. Nor is it greening the planet – it’s about stopping the de-greening of the planet. You want to replace a term that is perfectly fine which people would only associate with declining quality of life because of past bad framing (and distorted thinking) and the bad framing you are suggesting. Good framing is all about changing the way people think about things, not kidding people with terms that mean the opposite of what is intended.
I don’t use the term degrowth very often because I see it as a term that describes a transition process – the reduction in GDP to achieve a qualitatively improving steady-state economy (SSE), if a reduction in GDP is what is required, which it is in the case of most countries. In addition, some impoverished countries need more growth before stabilising at a SSE. Degrowth is a process – a means to a more desirable end. It is not an end in itself, which is something that some degrowthers are guilty of.
Something uncomplicated like “Nature is our Mother” is the framing that is needed to address the challenges of matching our behaviour to reality.
Primitive people understood this concept, before modern sophistication obscured it.
If an electoral majority could free themselves from the spell cast by mainstream economics and accept the simple reality that our survival is totally dependent on our environment, and always has been regardless of how we interact with it, governments could be forced to begin the transition to a steady-state economy.
Dave Willson: I’m not so keen on ‘Nature is our Mother’, as much as she is. Mothers can be abused, and many unfortunately are. I like ‘Sustainable Prosperity’ or even ‘Sustainable Inclusive Prosperity’, although a two-word term might be best.
With Sustainable Inclusive Prosperity, one has to think about what is ‘sustainable’ – which means operating where the global Ecological Footprint is no more than global Biocapacity (and therefore within the nine specified Planetary Boundaries); what is ‘inclusive’ – which means a just distribution of individual claims on real wealth (and upholding basic human rights, of which a right to paid employment is one of them); and what is ‘prosperity’ – which means real wealth produced and maintained within ecological limits at least cost whilst always respecting basic human rights. That’s why it needs to be Sustainable Inclusive Prosperity and not Prosperous Inclusive Sustainability, Inclusive Prosperous Sustainability, or Prosperous Sustainable Inclusiveness. It’s got to be sustainable first, inclusive second, and prosperous third. Overall, the term needs to be descriptive and prescriptive. I think Sustainable Inclusive Prosperity serves this purpose.
Some would say that hunter-gatherer societies were sustainable, inclusive, but not particularly prosperous (although prosperity is a somewhat subjective term). I’d have no hesitation in saying that modern society is unsustainable, exclusive, and only prosperous for some. We can enjoy
Sustainable Inclusive Prosperity by having the best of both worlds.
Any ‘growth’ needed by an impoverished nation before decelerating the rate of growth and finally settling at a qualitatively improving steady-state economy (SSE) and any ‘degrowth’ needed by a bloated rich country before decelerating the rate of degrowth and finally setting at a qualitatively improving SSE are simply terms to describe the transition to an economy that would allow us to enjoy Sustainable Inclusive Prosperity. A qualitatively improving SSE is the means, growth/degrowth is the transition to the means (depending on the current scale of a nation’s economy), and Sustainable Inclusive Prosperity is the end goal.
Someone has pointed out to me that my comment on 25 November 2025 includes a paragraph that reads as if something is missing. That person is right. I often quickly edit what I write and make the odd boo-boo. This was a big one. I somehow must have deleted a section of what I wrote.
Jędrzej: I’ve got news for you, Jędrzej. With a global Ecological Footprint 80% larger than global Biocapacity (and rising) and with 8.25 billion mouths to feed (and rising), degrowth is coming whether you like it or not. Without a managed degrowth response by all the countries which already have far more physical stuff than is required for their populations to live a decent and meaningful life, and efforts by many countries to cease population growth (some of which don’t have enough physical stuff for their populations to live a decent life), ecological systems will unenviably collapse and socio-economic systems, which depend on them, will too. That’s if socio-economic systems don’t first collapse from all the pressures that an excessively large human presence on Earth is already creating.
It’s either degrowth by managed and peaceful design or degrowth by disaster. The latter will be something you wouldn’t want to be around to experience. The former can be one, if appropriately managed during the initial transition phase and later when we have a qualitatively improving steady-state (physically non-growing) economy, that is ecologically sustainable and allows human beings to thrive.
You ask about the pros and cons of a degrowth transition, presumably to a steady-state economy (SSE) because no serious degrowther is advocating a continuously shrinking economy (which is in itself unsustainable). First, let’s look at the pros and cons of a growing economy. Again, no serious degrowther is denying that growth does not generate additional benefits, although ‘happiness’ studies indicate that happiness in wealthy nations hasn’t increased for decades despite near continuous increases in per capita GDP (the USA was happiest in 1957). So, if a degrowther is forced to concede that growth brings with it additional benefits, a growthist must concede that these additional benefits (marginal benefits, as economists call them) are small in all but impoverished nations.
All benefits come at a cost. If growth generates additional benefits, it also incurs additional costs (marginal costs). You’d think that the economics profession, given that a comparison of marginal benefits and marginal costs dominates their microeconomic thinking (utility-maximisation, the income-leisure trade-off, and profit-maximisation – constrained optimisation, more generally), would be motivated at some point to identify, measure, and compare the benefits and costs of economic activity at the macroeconomic level to determine whether economies are nearing or exceeding their ‘optimal’ physical scale. But, no. Suggest to most economists that a firm should continue to increase production if its revenue rises from the sale of a greater volume of output, and they’ll laugh at you. They’ll tell you that you need to compare the rising revenue (marginal revenue) with the rising costs (marginal costs), of which they claim the latter will increase at an increasing rate, and that a firm should cease to increase production when MB and MC are the same because it maximises the firm’s profits. Go beyond that, they say, and profits decline – the growth is ‘uneconomic’ (MB MC at the macro level, and a decline in the per capita GPI implies MB < MC. I might point out that any doubts about marginal costs rising at the micro (firm) level do not apply at the macro level. They certainly do, as GPI studies show.
And what do GPI studies reveal? You guessed it – the per capita GPI rises in line with increases in per capita GDP up to a point and then, despite per capita GDP rising beyond this point, the per capita GPI levels off. In the case of some countries, the per capita GPI declines. So, if the economics profession was to get behind the GPI, or something like it, we would now have a macroeconomic indicator to support the happiness studies. Unfortunately, most economists are so firmly wedded to the continuous growth mentality – in large part because they have an infantile understanding of economy-environment relations and therefore any recognition of biophysical limits to continuous growth – that they wouldn't dare think of it. Politicians aren't interested either. When you can present a line to the public that continues to slope upwards (per capita GDP), you're not going to present a line that flat-lines or declines (per capita GPI). Far too much of a 'bad news' indicator to ever see the light of day.
So, what are the pros and cons of degrowth? Well, apart from bringing about an economy that is ecologically sustainable – which the global economy is not a present – it would bring down a lot of costs. It would probably bring down some benefits, but not that much given that marginal benefits are small, but we could always increase the benefits generated by a SSE by improving the quality of the stock of physical stuff of which a SSE would be comprised (i.e., increase the GPI without increasing GDP). We could also use the technology that reduces the throughput-intensity of GDP to reduce the total rate of throughput and therefore the ecological demands to maintain a SSE (i.e., lower costs and increase the GPI without increasing GDP) rather than use the resource-savings to further increase GDP, thus avoiding the rebound effect that has resulted in the global Ecological Footprint doubling over the past fifty years despite the Ecological Footprint-intensity of Gross World Product halving. Growth is a choice. It's never an imperative.
Quite simple when you think about it, but very difficult to accept or even contemplate if you've read mainstream economics textbooks while doing an Economics degree. Sheer unscientific nonsense passed on by generations of mainstream economists and swallowed by impressionable late-teenagers.
‘Sustainable Prosperity’ is a great name for it. I think almost anyone would prefer to work towards a ‘Sustainable Prosperity’ than a ‘Degrowth Future’. I know I would.
Now that you haven’t alienated half your audience with a terrible sounding goal you can begin to discuss what a sustainable prosperity means.
Jerry, I thought I explained it with my response to Dave Willson’s comment.
Sustainable Prosperity can be split – what is sustainable and what is prosperous. We need both. We can’t have the latter without the former – not for very long anyway – plus the failure to operate sustainably eventually incurs large costs that reduce our prosperity. We could have the former without the latter, but that’s not desirable, particularly if both can be achieved, which I believe they can, although it will be a much different world than we have at present. I think people wouldn’t accept sustainability without prosperity, but they’ll accept sustainability if it can be explained that it needn’t compromise our prosperity.
Of the two necessary conditions, sustainability is easiest to recognise, but is proving the most difficult to achieve. Sustainable means operating where the global Ecological Footprint (EF) is no more than global Biocapacity (BC). The EF is the rate at which we extract natural resources (the Ultimate Means) from the ecosphere and also generate wastes, of which the latter cannot be 100% recycled, thus ruling out the mythical ‘circular economy’. BC is the maximum rate at which the ecosphere regenerates in order to maintain itself and provide the natural resources we need to fuel an economic system or the maximum rate at which the ecosphere can safely absorb and assimilate the wastes we generate. I say ‘or’ because the limiting factor (maximum BC) is whichever of the limited capacities of the ecosphere is most limiting. With some things, the limit on waste might be more ‘limiting’ than the limits on resource availability and extraction. For example, sustainability won’t require us to cease oil and coal use and search for an alternative form of energy because stocks of oil and coal will become so low as to be economically unviable – for example, when the energy (cost) to extract coal and oil exceeds the energy (benefit) from extracting and using coal and oil, which would happen eventually. It will be because the GHG emissions from the use of oil and coal is already far exceeding the ecosphere’s capacity to absorb GHG emissions, and because our failure to reduce the use of oil and coal to anything but a negligible magnitude will destroy the Earth’s climate system – a process that is now well advanced.
Since the global EF is currently 1.8 times global BC, we must reduce the rate at which we extract natural resources and generate wastes to around half the current rate. No ifs, buts, or in-betweens. That means many countries will have to degrow their economies for humankind to operate sustainably, whether we like it or not. If we choose not to engage in degrowth, wherever it is needed, we can’t have Sustainable Prosperity, and we will find ourselves as I’ve described above – prosperity for not much longer, firstly because the planet simply won’t support it any longer, and secondly, even before we get that far, the ecological, social, and economic costs will reduce our prosperity to levels well below what they are now (i.e., the Genuine Progress Indicator (GPI) that I talked about in a previous post will nose-dive).
Prosperity is a subjective thing. It’s not about how much stuff we possess, but whether we have enough of the right stuff and distribute it fairly to satisfy the full spectrum of human needs (Maslow’s needs hierarchy), which includes psychological as well as physiological needs. When all our needs are satisfied, we can live a decent, meaningful, and dare I say it, fun life, and any more physical stuff is unnecessary. People will say they have ‘wants’ not just ‘needs’, but wants, once you have everything required to live a decent and meaningful life, are really ‘perceived’ and in many cases ‘manufactured’ needs – needs you think you have when you don’t, or false needs because we are failing to organise ourselves in ways to meet everyone’s full needs. The latter is why we have the term and phenomenon of ‘retail therapy’ – people who go shopping for a quick hit because some of their needs, mainly psychological in nature, are not being met. They wake up next morning just as miserable as they were the day before. It also explains a lot of substance abuse in modern society. Throw in the lack of material stuff needed for unemployed people to have some of their physiological needs satisfied, and you can see why they disproportionately suffer from mental illness and are much more prone to suicide.
People will say that technology will save the day. At what point? For all the marvels of technological progress, the global EF continues to rise. Technology can do wonderful things for us. It has allowed us to half the EF-intensity of Gross World Product (GWP) over the past fifty years. But the global EF has doubled because global population and per capita GWP have doubled. Why? Because we have chosen to pursue growth in many countries when it wasn’t needed. Why have we continued to pursue growth? In many ways, the decision is taken out of our hands by the ruling psychopaths – the people who have ruled society since the advent of agriculture. Over time, they’ve just changed the way they rule us. Once it was through enslavement (an extreme form of tyranny). That was inherently unstable, so they adopted (invented) a less extreme form of tyranny – compulsory taxation as a means of creating a demand for their currency and then spent their own currency into existence (so we could pay our taxes) to obtain our labour and the resources required to build pyramids and monuments in their honour. Inadvertently, modern money and taxation have proved to be very beneficial for all of us.
You have no doubt heard of the saying, “There are two things guaranteed in life – death and taxes”. It used to be, “There are two things guaranteed in life – death and enslavement”. In between, it was, “There are two things guaranteed in life – death and serfdom”.
For a few decades in the immediate post-WW2 period, the masses managed to have a big enough share of power to allow taxation (to free up real resources) and government spending to provide lots of public goods and maintain full employment. But the psychopaths seized on a window of opportunity in the 1970s and used political institutions (which were always designed by the psychopaths to benefit the psychopaths) to engage in a programme of neoliberal reconfiguration of our economies (institutionalised chrematistics), which has included government austerity measures. The early-1970s was also a time when we (not the psychopaths) thought that the need for growth was no longer necessary as well as ecologically destructive. We contemplated a post-industrial world – Sustainable Prosperity – but the psychopaths would have nothing of that, and they’ve made the decision to persist with growth ever since. And while the masses do not have their full complement of human needs satisfied (a product of neoliberalism), many are happy to go along with it, always thinking that the source of their problems is ‘not enough growth’ (that’s what they are told). So, here we are with a global economy 80% larger than what is ecologically sustainable having been ecologically sustainable (only just) around the time the Western World contemplated Sustainable Prosperity (about fifty years ago). And most of us are not a little bit happier for it.
I’m ranting. I’ll finish off.
Technology will never allow us to operate sustainably whilst the global EF is greater than global BC. It’s as simple as that. Technology cannot bring the EF below BC whilst we persist with continuous growth. It’s as simple as that, as the evidence shows. Growth is always a choice – never an imperative. Technology can be used to make our lives better off once we make the collective decision to reduce the rate at which we extract natural resources/generate wastes to something that is ecologically sustainable. But a world with less but better quality stuff (a post-industrial world – Sustainable Prosperity) won’t make us better off if the stuff isn’t distributed in a way that meets everyone’s full complement of needs (it needs to be inclusive), and that’s something that will be difficult to do, regardless of who’s pulling the strings and pushing the buttons, with 8.25 billion people on Earth.
I don’t want to clog up Bill’s blog site. It’s his site, not mine. However, the comment I re-made with things said that didn’t appear in an earlier comment was also devoid of the same section. I don’t know why. I usually type my comment in the space provided and send it off, but sometimes I write the comment in a growing Word file that I save for future refence and copy and paste the comment into the space provided on the blog site. I know that I saved the full comment because I can see that I have. I simply copied and pasted the comment again for the second time. But like the first copy and paste job, the same section mysteriously failed to appear in the second posting. I’m only going to send the few paragraphs that include the missing section, not the entire comment. I hope Bill doesn’t mind me doing it. I’ve already copied and pasted the few paragraphs in the space below and I can see that the missing section appears in it. If it doesn’t appear when I submit it this time, I’ll have no idea why it is happening. I’m not going to type it all out in the space (I couldn’t be bothered), and I’m not going to try and send it again if this fails. But I think it includes an important point, although you can be the judge of this. The three paragraphs below appeared in the mid-section of the earlier comment. It will annoy me if it doesn’t work. I’ve never had the problem previously.
“All benefits come at a cost. If growth generates additional benefits, it also incurs additional costs (marginal costs). You’d think that the economics profession, given that a comparison of marginal benefits and marginal costs dominates their microeconomic thinking (utility-maximisation, the income-leisure trade-off, and profit-maximisation – constrained optimisation, more generally), would be motivated at some point to identify, measure, and compare the benefits and costs of economic activity at the macroeconomic level to determine whether economies are nearing or exceeding their ‘optimal’ physical scale. But, no. Suggest to most economists that a firm should continue to increase production if its revenue rises from the sale of a greater volume of output, and they’ll laugh at you. They’ll tell you that you need to compare the rising revenue (marginal revenue) with the rising costs (marginal costs), of which they claim the latter will increase at an increasing rate, and that a firm should cease to increase production when MB and MC are the same because it maximises the firm’s profits. Go beyond that, they say, and profits decline – the growth is ‘uneconomic’ (MB MC at the macro level, and a decline in the per capita GPI implies MB < MC. I might point out that any doubts about marginal costs rising at the micro (firm) level do not apply at the macro level. They certainly do, as GPI studies show.
And what do GPI studies reveal? You guessed it – the per capita GPI rises in line with increases in per capita GDP up to a point and then, despite per capita GDP rising beyond this point, the per capita GPI levels off. In the case of some countries, the per capita GPI declines. So, if the economics profession was to get behind the GPI, or something like it, we would now have a macroeconomic indicator to support the happiness studies. Unfortunately, most economists are so firmly wedded to the continuous growth mentality – in large part because they have an infantile understanding of economy-environment relations and therefore any recognition of biophysical limits to continuous growth – that they wouldn't dare think of it. Politicians aren't interested either. When you can present a line to the public that continues to slope upwards (per capita GDP), you're not going to present a line that flat-lines or declines (per capita GPI). Far too much of a 'bad news' indicator to ever see the light of day."
It did it again! I give up.
if i can put a more optimistic spin on all this,
1 reduce energy consumption,
the other side of energy consumption is energy production. the logic of human utility is doing more with less, and the ultimate systems dynamics conclusion of that is doing everything with nothing. we havnt been able to replicate the million fold increase in computer processing power in energy production yet , but we are working on it , and we will probably get to a world of infinite energy at near zero cost.
furthermore the other side of climate change , is climate control, engineering solutions to control the climate and the ecology. in a 1000 years all the ice may be gone if its a log curve, but we will have global aircon, and a new green revolution,
2 Reducing mass consumption while ensuring poverty is reduced – and Destroying the logic of capital accumulation – are not mutually exclusive challenges,
marx talked about capitalisms internal contradictions. i work with big data, and the seeds of an internal contradiction of a sort not envisioned by marxists is now emerging,
we currently price through market prices in the main, and we have oligarchs running around trying to use big data and algorithms to tilt the market in their direction, leading to negative distributional impacts, but the ultimate logic and human utility of this process is that we can allocate by algorithm without a market if everything on the planet was a data point, because that is more efficient , and if the coding and decision rules were done by tibetan monks , the distributional impacts would disappear,
not sure if you are a fan of Donald fagen bill, but his line in igy encapsulates what im getting at,
“A just machine to make big decisions
Programmed by fellas with compassion and vision”
get rid of markets and their financing , get rid of capitalism. we are probably a couple of hundred years worth of productivity gains away from making this optmisation path workable, but the seeds are being sown now, and a future generation of rational humans will cut out the middle man , because thats the most efficient way to do things . machine learning and big data will eventually end up killing its host,
hopefully we avoid a bukharian dystopia in the process
Thanks to Bill for the initial post, and to all the contributors to the comments. Probably there is the kernel of a viable approach right here on https://billmitchell.org/blog/?p=62911 . Philip Lawn’s Sustainable Prosperity (like the Wellbeing Economy) gives us an optimistic spin with which to aim at the hegemonic shift which is required ASAP. Please write your book quickly, Bill! Philip Lawn, I understand as being a prominent “Green MMT” advocate. As Graeme D points out, Fredric Jameson’s observation that “It seems to be easier for us today to imagine the thorough deterioration of the earth and nature than the breakdown of late capitalism” still pertains. My view is that MMT offers a possibility to imagine a credible alternative to neo-liberalism – perhaps a “credible” vision of a steady state economy. (Almost) everyone here agrees that green growth is an impossibility. We need a pathway ahead at least for the next few steps. A lot of good work is being done in the degrowth movement. It is to be hoped that relevant insights can be brought together into a counter-hegemonic strategy that can get some traction.