Degrowth As Abundance

Description

Jason Hickel:

"A recession is categorically different to degrowth, however. A recession is a shrinkage of the existing economy (an economy that requires growth in order to remain stable), while degrowth calls for a shift to a different kind of economy altogether (an economy that does not require growth in the first place). The literature on degrowth argues that it is possible to reduce aggregate economic activity in high-income nations while at the same time maintaining and even improving indicators of human development and well-being.

This can be accomplished with a series of integrated policy reforms. For instance, as dirty and socially unnecessary industries close down and aggregate economic activity contracts, unemployment can be prevented by shortening the working week and redistributing necessary labour (into cleaner, more socially useful sectors) with a job guarantee. Wage losses due to a reduction in working hours can be prevented by increasing hourly wages with a living wage policy. To protect small businesses that may find it difficult to pay significantly higher hourly wages, a universal basic income scheme could be introduced, with dividends funded by taxation on carbon, wealth, land value, resource extraction, and corporate profits. These policies have been successfully modelled in degrowth scenarios developed by D’Allessandro et al. (2018) and Victor (2019).

The core feature of degrowth economics is that it requires a progressive distribution of existing income. This inverts the usual political logic of growth. In their pursuit of improvements in human welfare, economists and policymakers often regard growth as a substitute for equality: it is politically easier to grow total income and expect that enough will trickle down to improve the lives of ordinary people than it is to distribute existing income more fairly, as this requires an attack on the interests of the dominant class. But if growth is a substitute for equality, then by the same logic equality can be a substitute for growth (Dietz and O’Neill, 2013). By distributing existing income more fairly we can improve human welfare and accomplish social objectives without growth – and therefore without additional material and energy throughput. A shorter working week plus a job guarantee and a living wage policy, as described above, are central mechanisms for accomplishing this. So too is investment in public services. By expanding access to high-quality, generous public healthcare, education, affordable housing, transportation, utilities and recreation facilities, it is possible to enable people to access the goods they need to live well without needing high levels of income to do so." (https://www.academia.edu/38601467/Degrowth_A_theory_of_radical_abundance?email_work_card=title)

Discussion

Achieving Wellbeing Without Growth

Jason Hickel:

"Existing empirical evidence demonstrates that it is possible to achieve high social indicators without high levels of GDP per capita. Past a certain point, the relationship between GDP per capita and social indicators begins to break down. Take life expectancy, for instance; while there is a general correlation between GDP per capita and longevity (countries with higher GDP per capita generally have better life expectancy), the relationship follows a saturation curve with sharply diminishing returns (Preston, 2007; Steinberger & Roberts, 2010). Longevity depends on other important variables besides GDP, such as investment in universal healthcare.

For example, Costa Rica’s healthcare system allows the country to match US life expectancy with only one-fifth of the US GDP per capita (Sánchez-Ancochea and Martínez Franzoni, 2016). Similarly, there is a tenuous relationship between GDP per capita and happiness, or well-being (see Easterlin, 1995; Easterlin et al., 2010). In the United States and the United Kingdom, for instance, happiness levels have remained unchanged since the early 1970s, despite significant growth in real GDP per capita. According to the Gallup World Poll, many countries (Germany, Austria, Sweden, Netherlands, Australia, Finland, Canada, Denmark, and most notably Costa Rica) have higher levels of well-being than the United States does, with less GDP per capita. The same pattern applies to many other social indicators. The GDP per capita of Europe is 40% lower than that of the US, and yet Europe performs better in virtually every social category, as European countries tend to be more equal and more committed to public goods. But even European countries have significant room for improvement. Inequality in Europe has worsened significantly since 1980. From a degrowth perspective, this represents an opportunity: there is no a priori reason why Europe’s social performance cannot be improved still further – without any additional growth – by distributing existing income more fairly and using progress taxation to expand public goods. It is not just that GDP is not strongly correlated with human development after a point – it is also that GDP growth past a certain threshold tends to have a negative impact. Alternative metrics of economic progress, such as the Genuine Progress Indicator (GPI), make this effect visible. GPI starts with personal consumption expenditure (also the starting point for GDP)and adjusts using 24 different components, such as income distribution, environmental costs and pollution, while adding positive components left out of GDP, such as household work. Kubiszewski et al. (2013) find that in most countries GPI grows along with GDP until a particular threshold, after which GDP continues to grow while GPI flattens and in some cases declines. The authors draw on Max-Neef (1995) to interpret this threshold as the point at which the social and environmental costs of GDP growth become significant enough to cancel out consumption-related gains (Deaton, 2008; Inglehart, 1997).Of course, one might argue that economic growth is necessary for mobilizing resources to invest in the technological change required to shift the world toward sustainability. But there is no evidence for the assumption that aggregate growth is necessary for achieving this. If the objective is to achieve specific kinds of technological innovation, it would make more sense to invest in those directly, or incentivize innovation with policy measures (e.g., caps on carbon and resource use), rather than to grow the whole economy indiscriminately (which would include growth of dirty and destructive industries) while blindly hoping for a specific outcome." (https://www.academia.edu/38601467/Degrowth_A_theory_of_radical_abundance?email_work_card=title)

Expanding Public Goods and Services Is Central To a Successful Degrowth Scenario

Jason Hickel:

"Expanding public goods and services is central to a successful degrowth scenario. This argument is much deeper and more profound than it appears at first glance, and opens up a number of fruitful lines of inquiry. Let us begin with an example that is close to my own experience. In London, house prices are astronomically high, to the point where a normal one-bedroom flat may cost £2,000 per month to rent, or £600,000 to buy. These prices are fictional; they are no indication of the actual cost of building a house, or even of land, but are rather largely a consequence of the rapid privatization of the public housing stock in Britain since 1980, as well as financial speculation, zero-interest rate policy and quantitative easing, which has driven asset prices up in the wake of the 2008 financial crisis to the extraordinary benefit of the rich. Meanwhile, wages in London have not kept pace with housing prices. In order to purchase housing, then, Londoners have to either increase their aggregate working hours or take out loans, which are effectively a claim on their future labour. In other words, people are required to work unnecessarily long hours to earn additional money simply in order to access shelter, which they were previously able to access with a fraction of the income. In the process, they produce additional goods and services that must find a market, thereby creating new pressures for consumption – pressures that manifest in the form of, for example, aggressive and increasingly insidious advertising schemes.

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In 1930, Keynes famously predicted that the economy would rapidly become so productive and replete that people would have to work for no more than 15 hours a week to satisfy all their material needs, thus freeing up more time for leisure. Productivity has long since surpassed the point of abundance that Keynes foresaw, and yet his prediction about work has never come true, because instead of translating productivity gains into shorter working hours, higher wages and guaranteed employment, capitalists have captured the benefits for themselves, increasing their profits while keeping wages low, and retaining the threat of unemployment in order to discipline labour. In this way, capitalism transforms even the most spectacular productivity gains not into abundance and human freedom, but into new forms of artificial scarcity. It must, or else it risks shutting down the engine of accumulation itself – killing off the goose that lays thegolden egg.Here it becomes clear that inequality itself drives artificial scarcity, just as enclosure did in anearlier era. In the 1970s, the United States had a lower poverty rate, higher average realwages, and higher happiness levels than it does today, despite having less than half of today’s per capita income.

The difference has to do with distribution: in the 1970s, income was shared more fairly, leading to better social outcomes. Virtually all of the yields of growth since 1980 have been accumulated by the rich, leaving the rest of the society in a state of what can only be called artificial scarcity. The same process plays out in every nation that has seen rising inequality, and indeed on a global scale as well. Today 4.2 billion people in the world (60% of humanity) live on less than the equivalent of $7.40 per day, the minimum necessary for normal human life expectancy and basic nutrition. Since 1980, the incomes of the richest 1% have grown by 100 times more than those of the poorest 60%, and now stand at $18.7 trillion (World Inequality Report, 2018). This is three times more than it would take tocover the poverty gap and lift everyone in the world above $7.40/day. In other words, shifting a third of the income of the richest 1% to the poorest 4.2 billion people could end global poverty in a stroke, while still leaving the 1% with $175,000 per year. We can also see the logic of artificial scarcity at work in the realm of consumption.

Industrialists who fear that people’s existing needs are too limited to absorb capitalism’s immense productive output must seek to create new needs, or else the juggernaut will grindto a halt. This is accomplished by various means. One is to expand desires through sophisticated advertising campaigns – and to extend these campaigns into all public and private spaces – manipulating people’s emotions and psychology to create new “needs” for products that promise to grant them a sense of self-esteem, status, identity, sexual prowess and so on that did not exist before and indeed do not have to exist. Another is to create products that are designed to break down quickly (like laptops and smart phones today) or become rapidly obsolete (as with the rise of throwaway fashion), and which therefore must bereplaced more frequently than would otherwise be necessary. Another is to preclude the development of public goods in order to ensure that people have no choice but to purchase private alternatives: for instance, blocking the construction of effective public transportation systems in order to ensure a steady stream of demand for the automobile industry. On top of this, a significant portion of consumption in highly-industrialized countries is driven by an artificial scarcity of time. As pressure on labour mounts, the structural compulsion to work unnecessarily long hours leaves people with so little time in the day that they must pay firms to do things that they would otherwise be able to do themselves: cook meals, clean their homes, watch their children, care for their elderly parents." (https://www.academia.edu/38601467/Degrowth_A_theory_of_radical_abundance?email_work_card=title)