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)