In May 2023, the European Parliament hosted its “Beyond Growth” conference, inspired by the concepts of “degrowth” and “post-growth.” The basic idea is that the world faces an extensive ecological crisis. To solve this, advanced economies, like the USA and Europe, should halt economic growth and even downsize their economies.
It is time to “de-develop” the West, as one of the leading advocates of “Degrowth,” Jason Hickel, has stated. Hickel defines Degrowth as ``a planned reduction of energy and resource use designed to bring the economy back into balance with the living world in a way that reduces inequality and improves human well-being.”
A powerful oppositional Marxist ecology
Degrowth does not offer a coherent theory of sustainable economic growth; instead, it is better described as a movement or agenda, with its roots in the 1970s views of Marxist philosopher André Gorz and economist Nicolas Georgescu-Roegen. As Degrowth proponent Giorgos Kallis describes it “Degrowth is an advanced reincarnation of the radical environmentalism of the 1970s […] it embraces conflict as its constitutive element.”
In a similar vein, the Degrowth movement has been hailed as “a powerful oppositional Marxist ecology that represents a path to a truly sustainable Earth.” The Degrowth Movement’s deep-seated belief is that all other approaches to the ecological crisis, such as Green Growth and the Sustainable Development Goals (SDGs) are futile because these approaches are rooted in democratic capitalism — which is the ultimate problem. Therefore a “radical political project” is advocated that would displace capitalism.
According to Harvard psychologist Steven Pinker, the Degrowth Movement has an “obvious” agenda: “it’s humiliating to their world view that the data show massive improvements due to markets and globalization rather than an overthrow of capitalism and global redistribution. ”
Not a solution to the ecological crisis
Ultimately, the proposal for degrowth is neither a solution for the ecological crisis nor for the shortcomings of democratic capitalism. Most importantly, degrowth has been criticised that its proposal to reduce the GDP of advanced economies will have no significant impact on reducing the world’s Material Footprint (MF), or carbon emissions, significantly enough to avoid an ecological overshoot. First, this is because after the GDP of rich economies are downsized — say by a significant 40% - there would remain a footprint of 60% and 60% of their economies to de-carbonise. Second, this is because most (63%) of current carbon emissions come from developing countries — where it will only continue to increase in the foreseeable future. Third, it a key proposal of degrowth, their call for energy sufficiency, is subject to significant rebound and negative spillover effects- i.e., it would stimulate economic growth and materialization of the economy.
Worse even, not only is downsizing the economies of rich countries not likely to be effective, but it may worsen ecological overshoot in several ways. “Degrowth might turn out to be dirty.” One reason is that countries will have fewer resources to invest in climate change mitigation and adaptation technologies, leaving them more vulnerable to the impacts of ecological deterioration. A second is that firms may substitute more expensive cleaner production techniques for cheaper, but more polluting, technologies. Third, government revenues will drop — an inevitable consequence of economic shrinkage. Governments would not be able to borrow further to spend on social and basic needs or environmental protection. They would need to repay their existing debt — in the EU, the rule that government debt cannot exceed 60% of GDP implies that, if GDP declined, debt would also need to fall.
A further shortcoming of degrowth is that if one considers degrowth as a method to decrease carbon emissions, it is a much more expensive method than any currently comparable technological investments as green growth is pushing for. According to calculations, if the world shrinks GDP per capita by 10% (around US$7,000 billion), it will reduce carbon emissions by about 3.3 gigatons, meaning a cost of US$ 2,100 per ton of emissions. In comparison, the social cost of carbon dioxide (SC-CO2) has been estimated at US$ 185 per ton of emissions.
Ecological austerity for the working class
In addition to being likely ineffective, to worsen the environmental challenge, and a costly way to reduce carbon emissions, degrowth may disproportionately hurt the poorest of the poor — and make global inequality worse. One mechanism through which this could occur is that degrowth in the Global North will severely curtail development in the Global South because of the intertwined nature of the global economy (and there is no time for the Global South to successfully “decouple” if at all that is possible). The COVID-19 crisis emphasized this inter-dependency — poverty rose more sharply in the Global South than the Global North — and indicated how difficult it would be for the Global South to decouple from the Global North. Hence, “the degrowth people are living a fantasy where they assume that if you bake a smaller cake, then for some reason, the poorest will get a bigger share of it [….] that has never happened in history.”
It may be accurate to conclude that “Degrowth is, in essence, a form of ecological austerity for working-class people.”
Finally, degrowth is not only ineffective, likely to worsen the environment, very expensive and a form of austerity for the working class, but redundant:
``Economic degrowth is not necessary, because it targets the wrong enemy. GDP is not the enemy; environmental impact is the enemy. Environmental scientists are able to determine upper bounds on environmental impacts such as pollution. For example, climatologists have determined the carbon budget: how much greenhouse gases can still be emitted that keep the atmospheric temperature increase below 1,5°C. But GDP is measured in dollars, a totally different quantity than kg CO2. Hence, none of the economic degrowthers are able to say what is the upper bound or true limit on affluence. There are no scientific studies that estimate the maximum level of GDP that is still permissible.”
Brutal dictatorship
Because of all these shortcomings, Degrowth is politically infeasible. Because of the endowment (loss aversion) effect, people attach high value to their current levels of GDP per capita where ever they live. They would be unlikely to vote for politicians who propose lowering their levels of GDP per capita. And politicians, being generally subject to a status quo bias, would be reluctant to propose such a radical policy. As degrowth proponents themselves acknowledge “political parties that have put forward degrowth ideas have received limited support in elections.” In 2023 in the Netherlands, the political party (BBB) who strongly opposed government policies to degrow the agricultural sector, so as to reduce nitrogen and other emissions, scored a massive election victory.
Indeed, democracy and Degrowth are inherently uncomfortable bedfellows. The only example in history of a sustainable and non-growing society was Japan during the Edo (Tokugawa) period (1603–1868). It was, however, “a brutal dictatorship.”
Given that a democracy is unlikely to choose degrowth voluntarily, the Degrowth Movement may set the world on the dangerous path towards rejecting democracy and reverting to an authoritarian collective, to enforce its agenda. After all, so their proponents may argue, given that their lofty goal is to save the entire planet from destruction, no price — including sacrificing democracy and liberty — may be too high a price to pay.
Further reading:
This article is based on my IZA Discussion Paper. The full paper is availabe here.
