Shifts in societal attitudes towards well-being mean that a degrowth strategy does not necessarily have to be political suicide

At the end of World War 2, the Western nations were beset with paranoia about what the USSR might be planning. The West had essentially relied on the Soviet armed forces to defeat the Nazis through their efforts on the Eastern front, after Hitler had launched – Operation Barbarossa – which effectively ended the – Molotov–Ribbentrop Pact – signed in 1939 between Germany and the USSR. Following the War, the ‘spectre of Communism’ drove the Western political leaders to embrace social democracy and introduce policies that created the mass-consuming middle class in most countries, which was seen as a bulwark against the development of a revolutionary working class movement and any further spread of Communism. While the interests of capital hated the welfare state and the rise of trade unions, they saw these developments as a means to protect their hegemony in the new world and the uncertainty that the – Cold War – engendered. Mass consumption was akin to Marx’s claims about religion being the ‘opium of the people’ and it has been a dominant part of life in advanced nations in the Post War period. It is one of the reasons that people think a degrowth strategy can never be embraced by the political class because it would confront a population besotted with material accumulation and consumption. However, research from Japan suggests that a strategy designed to reduce material consumption will not “reduce individual happiness and collective wellbeing” (Source) and a decoupling between growth and human happiness is indeed possible, which means the political class, if they are courageous enough, can introduce policies that promote degrowth.

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The concept of degrowth remains underspecified – reform or revolution?

I have done quite a number of podcast interviews with various hosts over the last few weeks and the discussions often turn to issues relating to the environment and what Modern Monetary Theory (MMT) has to say about those issues. Inevitably, the discussions then meandered into debates about what is possible given that we humans are estimated to be using 1.7 times the regenerative capacity of our biosphere at present. At some unknown point, but sometime, that overuse will have to come to an end as the biosphere asserts its capacity constraints in one way or another. The question that seems to interest people now is whether the existing mode of production (Capitalism) is at all compatible with reducing that ratio. My answer is always the same. Those progressives who promote the notion of ‘green growth’, which is embedded in ‘green new deal’ proposals or their ilk, seem to think that we can make the shift away from fossil fuels and reduce the claim on the biosphere within a growth paradigm while retaining the Capitalist ownership relations. For me, a system where the logic is ever accumulation of capital via the creation and expropriation of surplus value and realisation of that value as profit, is incompatible with being able to live within the limits imposed by the biosphere. If we are to have any long-term future as a race, then we will have to embrace a degrowth strategy and radically alter the way we allocate resources and our patterns of production and consumption. In a sense, Marx’s long discredited notion of the – Tendency of the rate of profit to fall – as an intrinsic feature of Capitalism, which he believed would eventually bring the system asunder, is likely to be realised as the environmental constraints impinge on the accumulation system. Simply put, the logic of Capitalism requires growth and degrowth is the anathema of that logic.

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Delinking and degrowth

One of the issues that some on the Left raise when the topic ‘degrowth’ enters the conversation relates to the sense of elitism from the wealthy nations, which can now indulge in a bit of non-material aspiration amidst the large houses, two-or-three car garages, speed boats, lycra-clad journeys to coffee shops on $10,000 bicycles designed for racing but ridden around the corner … you get the message. The criticism is that such a bourgeois ‘movement’ has no correspondence with the needs and aspirations of citizens living in poorer nations with fundamental development challenges, not the least being food security and poverty. They thus reject the idea as another ‘woke’ issue. There is some truth in what they say but it is an inadequate stance given that the global economy is operating 1.7 times over regenerative capacity and urgent changes are required. That means we have to deal with the notion of dependency between ‘North’ and ‘South’, which takes us back to the colonial relations and beyond, as an integral part of the degrowth agenda. This is where the concept of ‘delinking’ comes in. Here are some preliminary notes on all that, which arise from research I am doing for my next book on these issues (probably coming out first quarter 2025).

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MMT and international trade – some further considerations in a degrowth context

One of the undercurrents at the recent UK MMT Conference in Leeds was the apparent unwillingness of MMT economists to acknowledge their mistake in dealing with international trade. In our new book – Modern Monetary Theory: Bill and Warren’s Excellent Adventure (published July 2024) – we devote a chapter to this issue. There are various strands to the criticisms we receive ranging from claims we are simply wrong at the most elemental level to others claiming trade has no part in the MMT framework. All miss the point and I am surprised people have tried to make a ‘career’ (or advance their egos) on this issue. As I have noted several times in the past, the issue is nuanced but the elementary facts are not. I am now working on a section for my new book (with Dr Louisa Connors) on ‘degrowth’ and system viability from an MMT perspective and so I am linking the trade aspects of MMT with this narrative to provide further clarification of how nuanced this area of discussion can be. Here is a little glimpse of that work.

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Degrowth and Japan – a shift in government strategy towards business failure?

I am briefly in the UK (arrived Tuesday and returning to Melbourne early Friday). We are officially launching our new book – Modern Monetary Theory: Bill and Warren’s Excellent Adventure – later this morning at the UK MMT Conference in Leeds, England. I am avoiding many of the sessions to reduce Covid risk, given the lecture theatres do not seem to have been refitted with modern ventilation. But from what I can see the Conference is well attended and going well. I should add that I had nothing to do with the organisation of the Conference but as usual I thank those who have put time to build an event that focuses on the work that I am part of. Anyway, a whirlwind trip this time. Today, though I reflect on the latest developments in Japan with respect to its ageing and shrinking population and how that impacts on business viability and skill shortages. All part of my research on degrowth strategies.

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Degrowth will require humans shovel less energy … into our bodies

I haven’t much time free today and with the federal government’s fiscal statement coming out tomorrow night and wage data and the labour force data coming out Wednesday and Thursday, respectively, it is going to be a full week. Given I am using all my time to finish the manuscript for my next book which has to be delivered to the publisher on June 1, I am writing very little here today. But there was some interesting data released by the Australian Bureau of Statistics (ABS) last week that bears on my general theme of degrowth, in a roundabout sort of way. The data from the – National Health Survey 2022 – is very revealing and shows how far people will have to go to adopt degrowth behaviours at a personal level. And just so you know, while I wrote about health matters last week and will again today, I don’t intend to make it a regular habit on a Monday.

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From the archives – my early statements on the need for degrowth and the resistance they received from progressives

As part of a another current project, which I will have more to say about soon, I was trawling through early Internet archives of the Post Keynesian Thought (PKT) listserv archives and was reminded that I began my degrowth journey many years ago. Going back in time and coming across things that one has written is an interesting experience. In this case, I reflected on my changing narrative style, my naivety in places, and the continuity of my thinking over the course of my academic career. The following discussion is the product of my archival research for another project of the Post Keynesian Thought (PKT) discussion list archives. It has been an interesting exercise and brought back interactions, personalities and the like that I have forgotten about. Many on that list have since died (sadly). But what is established is that 30 or more years ago there was widespread resistance still within the progressive economics community to the idea that the destruction of the planet would require major systemic change. This resistance bears on the debates now between the dominant ‘green growth’ group who think capitalism aided by global financial capital can achieve the changes necessary to meet the climate challenge and the degrowth camp who want fundamental system and behavioural change. My writings in 1995 placed me firmly in the latter cohort.

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Moving to a sustainable system of food production within a degrowth paradigm

I read an interesting report in the last few days – The Economics of the Food System Transformation – published on January 29, 2024 by the – Food Systems Economics Commission (FSEC) – which “is a joint initiative that brings together 21 commissioners from 19 global institutions”. The topic is very relevant to research I am engaged in at present as part of my upcoming book release on Degrowth and Capitalism. It is also relevant to my lived experience which I will briefly touch on.

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Degrowth, food loss and food waste – Part 7

Last Monday, I wrote about the global need for us to abandon meat production for food, and, instead take up plant-based diets. Many people interpreted that argument as a personal attack on their dietary freedom, which indicates they fell into a fallacy of composition trap and declined to see the global issue. As part of my series on the Degrowth agenda, the other aspect about food which is important is that we have a propensity to produce too much food and distribute what we produce unfairly. I will deal with the distributional issues in another post. Today, I want to talk about the over-abundance of food in nations which means too much land, water and other resources is devoted to its production with commensurate negative environmental consequences. One manifestation of that phenomenon is food loss and food waste, which are different terms for the segment of the food supply chain where wastage occurs. If we are serious about dealing with the environmental disaster then we have to eliminate or dramatically reduce wastage. This will require significant investments in some nations to improve storage etc and a dramatic change in other nations in terms of attitudes to aesthetics, packaging, and more.

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Degrowth, food and agriculture – Part 6

This is Part 6 of a series on Deep Adaptation, Degrowth and MMT that I am steadily writing. I have previously written in this series that there will need to be a major change in the composition of output and the patterns of consumption if we are to progress towards a sustainable future. It will take more than cutting material production and consumption. We have to make some fundamental shifts in the way we think about materiality. The topic today is about consumption but a specific form – our food and diets. Some readers might know that there has been a long-standing debate across the globe on whether a vegetarian/vegan diet is a more sustainable path to follow than the traditional meat-eating diet. Any notion that the ‘meat’ industry is environmentally damaging is vehemently resisted by the big food corporations. Like anything that challenges the profit-seeking corporations there is a massive smokescreen of misinformation created to prevent any fundamental change. New research, however, makes it clear that we can achieve substantial reductions in carbon emissions by abandoning meat products in our diets and the gains are disproportionately biased towards the richest nations. I have long argued that I find a fundamental contradiction in those who espouse green credentials and advocate dramatic behavioural shifts to deal with climate change while a the same time eating meat products. The recent research supports that argument. So Greenies, give up the steaks and the chickens and get on your bikes and head to the greengrocer and start cooking plants.

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Degrowth, deep adaptation, and skills shortages – Part 5

This is Part 5 of an on-going series I am writing about the issues facing societies dealing with climate change and other elements which come together as a poly crisis. The series will unfold as I research and think about the topic more through my Modern Monetary Theory (MMT) lens. Today, I am concluding the analysis of the questions relating to the ageing society and the resulting skill shortages, that the mainstream narrative identifies as key ‘problems’ facing governments across the Western world. Like any issue, the way the ‘problem’ is constructed or framed influences the conclusions we come up with. Further, the tools use to operationalise that construction also influence the scope and quality of the analysis and the resulting conclusions. As I explained in Monday’s blog post – Degrowth, deep adaptation, and skills shortages – Part 4 (October 31, 2022) – the use of mainstream macroeconomics fails to deliver appropriate policy advice on these questions. But further, when we introduce multi-dimensional complexity – such as degrowth to the ageing society issue – the mainstream approach becomes catastrophic. MMT is a much better analytical framework for drilling down to see what the essential problem is and what are non-problems and thus creating the questions and answers that lead to sound policy. Today, I show why the existence of skills shortages really provides us with the space to pursue a degrowth strategy while not causing material standards of living to collapse. They are better seen as indicator of what is possible rather than a macro problem.

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Degrowth, deep adaptation, and skills shortages – Part 4

One of the ‘problems’ besetting the world at present, if the commentary in the mainstream press is anything to go by, is the existence of chronic skill shortages. Survey studies of the shifting demographics in Japan, for example, have produced ‘alarming’ results from a mainstream perspective. See for example, this OECD Report from 2021 – Changing skill needs in the Japanese labour market. I was at a meeting recently in Kyoto and it is clear that many firms in Japan are having trouble finding workers and many have even offered wage increases to lure workers to their companies. Further, many small and medium-size businesses are owned by persons who are over 70 years of age and that proportion is rising fast. The skill shortage scenario is tied in with the ageing society debate, where advanced nations are facing so-called demographic ‘time bombs’, with fewer people of working age left to produce for an increasing number of people who no longer work. The mainstream narrative paints these trends as major problems that have to be confronted by governments, and, typically, because of faulty understandings of the fiscal capacities of governments, propose deeply flawed solutions. I see these challenges in a very different light. Rather than construct the difficulties that firms might be facing attracting sufficient labour (the ‘skills shortages’ narrative), I prefer to see the situation as providing an indicator of the limits of economic activity or the space that nations have to implement a fairly immediate degrowth strategy. In the following two blog posts I will explain how this inversion of logic can become a crucial plank in the degrowth debate.

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Degrowth, Deep adaptation and MMT – Part 3

This is the third part in a on-going series that I am writing about Deep Adaptation, Degrowth and related concepts, all of which are designed to provide some sort of pathway beyond the current mess that the world is in with respect to climate, inequality, poverty, excessive consumption, and excessive population growth. Today, I consider how Modern Monetary Theory (MMT) fits into the transition agenda and discuss the labour market dislocation that will accompany the transition to degrowth.

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Deep adaptation, degrowth and MMT – Part 2

This is Part 2 of a series on Deep Adaptation and MMT that I am writing. The first part – Deep Adaptation – Part 1 (August 22, 2022) – introduced the concept. I have recently written about the coming together of a number of crises which I consider to be all linked and part of the end of normal business as we have known it. See – The global poly crisis is the culmination of the absurdity of neoliberalism (July 18, 2022). Thinking about the social aspects of that conjunction of crises, we understand that advancing material prosperity is still a goal that we should seek to achieve for millions of the globe’s citizens, who live in abject poverty with little food and housing security. But then, when we consider the ecological dimension we see immediately how the social goals have to be solved within a constrained envelope of overall material deprivation. The question then is how can we move forward towards achieving that duality. There are various propositions out there – Green New Deals, Green Growth, etc. I think they are all flawed and that proponents tend to become captured by the power relations that have created the current mess. That is where I think the concept of Deep Adaptation comes into play. Which brings me to a starting point in understanding where these institutionalised ‘green’ conservations have lost their way. Today, I am writing about growth and degrowth, because there are a lot of misunderstandings out there about this apparent conflict.

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Australian National Accounts – GDP growth slows significantly – slipping towards recession under current policy settings

The Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, March 2025 – today (June 4, 2025), which shows that the Australian economy grew by just 0.2 per cent in the March-quarter 2025 (down from 0.6 per cent) and by just 1.3 per cent over the 12 months. GDP per capita growth was negative -0.2 per cent as output growth was outpaced the underlying population growth. There was a major slowdown in household consumption expenditure growth and the government sector overall contracted. While the overall slowdown led to a decline in import expenditure (which adds to growth), the decline in exports was greater, which means that the external sector detracted from growth overall. The problem is that as the overall growth rate declines, it is getting to the stage where unemployment will start to rise.

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A Just Transition framework is required to head off the climate denying Right

The recent federal election in Australia saw the conservative opposition coalition lose further seats in parliament building on their disastrous 2022 result. The coalition is made up of conservative urban types (the so-called Liberal Party) and the National party, which represents the rural lobby. The Nationals are essentially climate-change denialists and because the Liberals require them to have any hope to govern, the smaller rural lobby can dominate policy choices. To convince the Nationals to adopt a net-zero by 2050 stance, the Liberals had to agree to propose a shift to Nuclear power, which was neither realistic in a logistical sense or economic in a cost sense. The electorate clearly rejected that option at the recent election. Now the Liberals, who are facing an existential crisis after the devastating loss, has to make a choice – stick with the Nationals and jettison net zero or break the Coalition and pitch a climate policy that will be acceptable to voters. The problem is that neither option will deliver them electoral success. Progressives are enjoying some rare schadenfreude over this conservative dilemma. It seems that the British Labour Party has got itself into a similar dilemma, with pressure from the Right-wing Reform Party to water down its climate policy. But what is more interesting in the UK setting is the role played by Labour’s former Prime Minister, who is also now attacking ‘green’ stances. I predict that will not end well for Starmer and Co. Fortunately, the Australian Labor party, which is also in government is sticking to a more ambitious climate agenda, although, even then, it is not ambitious enough. However, governments that are pursuing a net zero agenda must provide security for communities and regions that will bear the brunt of the policies introduced. The resistance to change that political forces such as Reform UK exploit can be easily offset if governments accompany their net zero agenda with a Just Transition framework. However, there is an absence of policy development in that area.

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Does rising income inequality explain the rising support for right-wing political movements?

We know that after the Second World War, as nations embraced their major national policy statements (White Papers in many countries) to build their societies after the disruption of the War and the Great Depression, income inequality fell significantly. Since the 1970s, the post WW2 trend has been somewhat reversed in many (but not all) nations. The rising income inequality is particularly apparent in the Anglo advanced economies, with the US leading the way. In other nations, the trend is mixed, which suggests the link between rising income inequality and the rising support for right-wing political movements is less obvious than some commentators are suggesting. In fact, there is credible research that suggests the swing to right-wing political parties is not coming from the most precarious workers who appear to remain loyal to Leftist ideas. It is the next segment of workers up who have not yet been ravaged by globalisation but sense they are about to be who seem to have swung to the Right. In this blog post, I discuss some of these ideas and the research that is accompanying them.

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Australian National Accounts – growth rate picks up on back of government spending support

Today (December 4, 2024), the Australian Bureau of Statistics released the latest – Australian National Accounts: National Income, Expenditure and Product, December 2024 – which shows that the Australian economy grew by just 0.6 per cent in the December-quarter 2024 and by just 1.3 per cent over the 12 months (up from 0.6 per cent). GDP per capita also reversed its sequence of negative results as output growth outpaced the underlying population growth. The only source of expenditure keeping GDP growth positive is coming from government – both recurrent and investment. The largest component of national expenditure – household consumption spending – returned to a positive contribution as did business investment and net exports. But the fact remains that non-government spending is still relatively weak and it is public spending that is keeping the economy from near recession growth rates.

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Field trip to the Philippines – Report

I have been working in Manila this week as part of a ‘knowledge sharing forum’ at the House of Representatives which was termed ‘Pathways to Progress Transforming the Philippine Economy’ that was run by the Congressional Policy and Budget Research Department, attached to the Congress (Government). I am also giving a presentation at De La Salle University on rogue monetary policy. It has been a very interesting week and I came in contact with several senior government officials and learned a lot about the way they think and do their daily jobs. I Hope the interactions (knowledge sharing) shifted their thinking a little and reorient to some extent the way they construct fiscal policy. This blog post reports (as far as I can given confidentiality) what went on at the Congress.

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