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Blogs

Is degrowth about bringing down GDP?

In a thought-provoking piece in CASSE’s Steady State Herald, Brian Czech worries that many degrowthers seem agnostic about GDP degrowth. But should degrowth be about bringing down GDP? My answer: not primarily. We had an interesting exchange of ideas on CASSE’s website (see full text there).

Me: GDP is just a blunt aggregate weighing scale. You can make yourself sick by eating too much apple pie, but it also matters whether the pie contains too much dough and too few apples: a pie of the right size can still be unhealthy. Degrowth efforts are likely to bring down GDP because socially and ecologically undesirable economic activities that count towards GDP are deliberately replaced by socially and ecologically desirable economic activities that don’t count towards GDP. In other words, not everything that can be counted counts, and not everything that counts can be counted. Other activities that currently count towards GDP, e.g., in health care, education, welfare and other public services, should be preserved—like apples in an apple pie. Degrowth is therefore not primarily about bringing down GDP; it’s about downscaling what is unhealthy, unfair and unsafe. GDP-degrowth cannot guide us there.

Brian: GDP growth with healthy and happy services proliferating everywhere would still entail an expanding trophic base… In seafaring terms, when she’s loaded to the Plimsoll line it doesn’t matter if you add a puppy or a skunk; either way your ship is sunk!

Me: I agree with you that ‘healthy and happy’ services also contribute to throughput, and therefore to our ‘sinking ship’. But I’m still not 100% convinced about GDP-degrowth, because it lumps together what should be downscaled and what should be preserved. Another metaphor: just as GDP growth is sailing by a wrong compass, so too could GDP-degrowth lead us astray. So for me, we are left not with GDP-degrowth, but with biophysical degrowth towards a steady-state (AND the ‘degrowth’ efforts I have noted).

Brian: I am very tempted to say, acknowledging but the merest tinge of exaggeration, that there is nothing more biophysical than GDP!

Me: The growth rates of GDP and material throughput are indeed very strongly correlated. No disagreement with you there.
However, we are primarily concerned with lowering material throughput, not the indicator of GDP per se. Material throughput must shrink, which will undoubtedly bring down GDP. But we should not put the cart before the horse. For me, as a Degrowth scholar, the matter of how we shrink material throughput is key, and GDP-degrowth as a policy goal doesn’t help—especially as we begin to partly decommodify economic life, reclaim the commons and work towards other ambitions linked to the degrowth movement.
I already referred to preserving (or even growing) essential basic services (more apples and less dough in the cake). Adding to that, it would be beneficial if the material standards of living of the ‘poor’ go up (on a side note: this type of growth is not equivalent to GDP growth in the global South, which tends to happen at the expense of the poor). In a world of limits, growth of throughput by the ‘under-consumers’ demands more degrowth of the throughput by the ‘over-consumers’.
These are just some examples of why we need more targeted degrowth strategies (as opposed to GDP-degrowth in the aggregate). Of course, in the aggregate, we also need to make sure that we downscale to and remain in a safe steady state. But I doubt that World GDP is the best indicator to help us make that assessment (especially if we start to transform the economy as mentioned above). To track our aggregate biophysical impacts, we might want to look at the planetary boundaries framework, for example.

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Talks

Towards a Degrowth Society: a panel with members of the Dutch Degrowth platform

The COVID-19 pandemic urges to develop a new economy – one that can do without incessant growth, one that generates human wellbeing without the destruction of our ecosystems. A panel of some of the members of Ontgroei (the Dutch Degrowth Platform was hosted by XR to discuss what a future without economic growth would look like. The recording can be found here, or below. Both movements are looking forwards to continuing the conversation.

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Blogs

Recovering from COVID-19? Let’s do it without GDP growth

COVID-19 has infected both our bodies and economies. On March 12, Mark Rutte compared the Dutch economy to ‘a patient’ requiring treatment. The next day, his government was ready with a rescue plan for major firms, such as Air France-KLM and Schiphol. Just as our bodies need oxygen, the economy needs money – so the theory goes. Other European governments are also preparing to inject credit, and a lot of it, to ensure their economies’ survival.  Yet, this cure is limited. It presupposes that our economies need growth in order to flourish. If we do not steer away from this limited paradigm, then the cure we apply now will become a liability by giving rise to potential crises in the future. Read more…

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Talks

Degrowth on Rebel Radio

Returning to work after a relaxing holiday, you make a resolution not to get caught up in the ratrace again. A week later you find yourself right back in. Why? Because the conditions haven’t changed. The corona crisis is a terrible ordeal, but it has also been a period of reflection. Let’s work to change the structures, institutions and rules, so that we do not return to a system that was environmentally destructive, socially unjust and generally terribly unstable. In these two interviews with XR’s rebel radio, Crelis Rammelt (Assistant Professor Environmental Geography and International Development Studies, UvA) and Julia Karch (student, UvA) reflect on the crisis from a degrowth perspective.

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Blogs

This isn’t the type of downscaling that degrowth thinkers have in mind!

In the early 17th century, the bubonic plague is said to have played a crucial role in popping the tulip bubble in the Netherlands. Today, the coronavirus (COVID-19) is leading not only to a health crisis, but also an economic one. The outbreak is sparking realistic fears of a deep global downturn. Our globalised, just-in-time, cost-cutting, risk-taking and profit-maximising economy has shown a rather limited ability to absorb shocks. In a time of crisis, the instability and fragility, but also the inequality of the economic system becomes painfully obvious. Read more…

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Talks

Local Perceptions of Changing Food Systems in Northern Ethiopia

Rammelt, C. F. (2019). Masterclass: Tracing the Causal Loops, Local Perceptions of Changing Food Systems in Northern Ethiopia. Sydney: UNSW.
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Blogs

Capitalism inevitably leads to crises

Capitalism typically goes through cycles of expansion to contraction. We commonly refer to these as ‘business cycles’ or ‘economic cycles’. Every now and then, however, these cycles go off the hinges. They become unstable and can lead to recessions, crises and depressions. This inherent instability of the capitalist system cannot be explained by standard economic models. Instead, those models blame instability on excessive regulation, government interventions or other factors outside the market-economic system. Some unorthodox economists see it differently. Steve Keen, for example, developed an alternative kind of economic model—one that can mimic instability. The model provides compelling and urgent insights into how economic crises arise from within the structures of capitalism. Another crisis seems inevitable as long as the causes are misdiagnosed. Read more…

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Development Economy

Life and Debt (Stephanie Black)

Jamaica in the 1970s: Govt. investments in development (health, education, housing, agriculture). Imagine a well-running hospital, educated personnel, well-equipped, affordable. Debt is now 150% of GDP. State funds are committed to service debt. So imagine the same hospital 40 years later, no maintenance, insufficient(ly) trained staff, expensive medicine/treatment…

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Economy

Economic stability leads to instability (Hyman Minsky)

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Blogs

Good infinity

Cycles of growth and decline in ecology were famously revealed in so-called predator-prey relationships. As foxes eat chickens, chicken reproduction drops, which leaves fewer chickens for foxes to eat. Consequently, the fox population drops, which then allows the chicken population to rebuild. As its food source becomes available again, the fox population also rebuilds and the cycle starts again. Read more…