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 (Below, I have tried to summarise some of the points. For full text see here).
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.
Brian: I don’t view the choice as either/or. I am all for targeted throughput caps, starting with oil at the wellhead… The main point of my article is that it is misleading and counterproductive to call for degrowth while wavering on the implications for GDP. When we cap oil at the wellhead, we will (ceteris paribus) be lowering the rate of GDP growth… On the other side of that exact same coin, … efforts to lower the rate of GDP growth … will absolutely lower throughput. Take just three examples:
– Removing tax code incentives for having more children than two.
– Sectoral salary caps (see today’s Steady State Herald (later today)).
– Keeping the Federal Reserve (or whatever monetary authority) out of the growth game and purely onto its original mission of fighting inflation.
These and many other fiscal and monetary reforms are throughput droppers as surely as wellhead capping, and with crystal clarity of intent—vis-à-vis GDP—for all to see.
Crelis: Thank you for this clarification Brian. I fully agree with you on the first point. It would indeed be counterproductive not to recognise that a reduction in throughput brings down GDP. I believe we are on the same page there. For me, the discussion was more about the second point, regarding the policy focus on GDP-degrowth.
There is a difference between saying “we need to reduce GDP” and “we need to understand that GDP will be reduced as a consequence of all this targeted degrowth stuff we‘ve been talking about.” It seems to me that the monetary/fiscal reforms you mentioned intend to do much more than to lower the indicator of GDP (even if that is going to be one of the outcomes). But maybe I am splitting hairs.
In any case, your article is in part about why some degrowthers are not engaging with a GDP-degrowth policy, or failing to take a clear stance. While I don’t speak for them of course, I was trying to provide examples of some of the ambitions in the degrowth movement for which GDP-degrowth doesn’t provide a very useful compass. At the same time, I do see the importance of debunking the GDP fetish. So of course it is not an either/or choice. We need to tackle the problem on many different fronts. But that is exactly the point I think; there are different fronts.