Shaping a Post-Growth Economy
Why an economy that naturally circulates money rather than concentrating it is better for the world.
By Post Growth Fellow, Sheeza Shah
Re-envision Business is a podcast by UpEffect highlighting the emerging need for responsible trade that uplifts communities frequently left behind. In each episode, innovators and thought leaders deconstruct conventional systems perpetuating economic inequality and spotlight models that are re-envisioning business.
For episode 20, Post Growth Fellow, Sheeza Shah, spoke to the Post Growth Institute (PGI)’s Executive Director, Donnie Maclurcan to explore why we need an economy that values people’s needs ahead of corporate greed and what it will take to build the next economy.
Plus, Post Growth Fellows, Erinch Sahan of the Doughnut Economics Action Lab; Katherine Trebeck of the University of Edinburgh; Jessica Mason of Start.coop; and Arpita Bisht of Erasmus share how they’re each serving their communities to re-envision business and shape a post-growth economy.
Listen to the full episode here, and scroll down for a summary adapted from the transcript of this enlightening conversation.
What’s the current state of the economy?
Donnie Maclurcan: When we talk about economics, it’s important to highlight that a global capitalist market economy is only part of the picture. In fact, the very framing of the global economy as homogenous is part of the challenge that many groups around the world face — particularly Indigenous groups, feminist groups, and those focused on self-sovereignty. In reality, there are diverse forms of economy: some of them involve a formal market, but there are a multitude of economies we rarely hear about.
In a global system of formal market trade, which is where the Post Growth Institute focuses a lot of its interest, we see increasing inequity and forms of neocolonialism — and these are a direct outcome of a system that is inherently racist and predicated on the need to grow. We live in an economy that is playing out, in a way, just as it’s designed to — which is to effectively present trade as ‘raising all boats’ when it’s actually exacerbating the exploitation and inequities that are baked into the capitalist, neocolonial form.
If we take growth as synonymous with a capitalist economy — in the microeconomic sense of businesses needing to grow their profit margins, and the macroeconomic sense of needing to expand the money supply — the capitalist system will always see an accumulation of money into the hands and bank accounts of the wealthiest individuals, households, corporations, and, in a few select cases, the wealthiest governments. This capital accumulation stems from the profit maximizing imperative, which shows up in all forms of capitalism (even its most benevolent). At times, such accumulation can appear a mirage — the current growth economy has a veneer, to certain people of privilege (for example, those who can purchase whatever they want online and have it delivered to their door), that the economy works in the same way for everyone, everywhere. The truth lies far from this claim.
How does post growth address these issues?
DM: What the notion that ‘everyone can benefit from capitalist growth’ misses, and what post growth seeks to address, is that externalities occur constantly through capital accumulation. Wherever there is capital accumulation in one place, the equivalent experience somewhere else is indebtedness. We know that this happens particularly across neocolonial lines, between the Global South and Global North (where so much of the money and wealth has been accumulated). Much of the money that continues to be accumulated through trade results from exploitative working conditions and inequitable trade deals.
A post-growth system essentially says: Not only are we facing ecological limits, but the very systems that have been driving us into ecological overshoot are also unsustainable from a social perspective. The shift that we’re calling for isn’t just towards a ‘more green’ future — it’s about exploring the underpinnings of our economy, and taking a holistic perspective to recognize that all living systems thrive when they have circulation built into them. Our economies are essentially a construct that represents how we relate to each other and the natural world. When the circulation of money, materials, power, and natural resources is built into our economy, we can thrive interdependently.
If we drop into our bodies and feel what’s going on, we know it doesn’t work to have an economy of market trade that’s built on accumulation. We need something that’s got circulation built in, so that it can actually meet needs according to where they are. We understand that collectively we can work in ways where that energy — literally or metaphorically — flows to various parts of the system, to assist in our collective process of thriving.
What is the role of debt in the current system?
DM: In our present global economic system, money gets loaned into existence — which means that when you create new money, you have to have equivalent amounts of debt. In certain cultures, you have interest on top of that debt, as well as the ability to create new forms of loans. Globally there’s about two and a half times the amount of debt in the system than money. In practicality, the result is a scenario, like in Australia, which is a very wealthy nation, per capita, but people have very large mortgage and household debt, and are under huge amounts of household stress. In order to have that kind of wealth, you also have to have a huge amount of debt.
In a capitalist system, money is always extracted faster, into a small number of hands, than it is circulated back through taxation, wages, philanthropy, and so on. The debt that matches that money in the system has to accumulate somewhere else in the system— there’s no way around this. That debt stress exists in a local economy. For example, if in an economy $1 trillion of new money is added to the money supply, there has to be $1 trillion of debt somewhere else in the system to balance things out. This is compounded by exorbitant levels of interest in certain economies and cultures. That dynamic is foundational to the racialized inequality we see in the current system. Typically about 12 times the amount of aid money that flows into the African continent flows out through repayments of interest on loans.
On a global level, for every dollar of new economic growth, about 93 percent ends up in the hands of the top 1 percent and only five cents end up in the hands of the world’s majority. That level of accumulation actually creates the need for the economy to keep growing, and is why debt keeps expanding. Think about it: if you’re indebted and don’t have access to enough money through a wage or otherwise, you have to go further into debt to pay off your debts. That drives the global economy in this pseudo-healthy sense of increasing GDP, but in reality we continue to move further towards a precipice of increasing stress until you have situations of collapse.
The antidote is forms of economy where money circulates — whether it’s a gift economy, barter economy, forms of financing without exorbitant interest, and forms of business that don’t participate in the accumulation of capital.
What do such businesses look like and why are they central to the shift to a post-growth system?
DM: Jurisdictions around the world consistently differentiate between for-profit and not-for-profit entities. For-profit entities have private individual equity owners, and not-for-profit ones don’t. Not-for-profit entities include foundation-owned businesses like Patagonia, which has recently shifted to that model, as well as IKEA and Bosch, to name a few well-known examples; consumer cooperatives, such as credit unions, which have no private individual owners; government enterprises, where a government owns business activities; and nonprofits that have business models: for example your local religious organization that runs a cafe alongside its activities as a way to cover some of its costs. A great example is the world’s largest Non-Governmental Organization, BRAC, which has over a billion dollars of revenue, employs over 120,000 people, and works across 10 different countries. BRAC is a not-for-profit organization — less than 20 percent of its income is from philanthropic contributions. The rest is generated through activities such as craft stores, research laboratories, bakeries, banking institutions, and more.
The common thread here is a class of ownership and stewardship structures where you don’t have private individual ownership. Approximately 20 percent of global GDP comes from these forms of business. It’s not like we need new business models: we already have models that enable the circulation of profit and that is a key factor in how we can shift from a growth to a post-growth system, where money gets reinvested back into communities and to the labor underpinning business, rather than accumulating in shareholder bank accounts. That reduces the pressures created by debt expansion, because you don’t have capitalist relations. And that changes the power dynamics in the global economy, the incentives for business, and the pressures that come as externalities from capitalist growth. It actually allows for a macroeconomy to be designed within ecological limits for collective flourishing.
How some of our Post Growth Fellows are reshaping business
Our Post Growth Fellows are taking an incredibly diverse approach to addressing some of the most pressing problems affecting people and planet today — from political ecology, ecological distribution conflicts, environmental justice, Doughnut Economics, and cooperative structures to inclusion and access, social justice, and systems change.
Erinch Sahan: I’m the Business and Enterprise lead at Doughnut Economics, and my task is to take the concepts of Doughnut Economics into the world of business. We’ve created a set of tools that anybody working with businesses can use to help them engage with the concept of Doughnut Economics and facilitate a workshop. It means they look at some of the most regenerative and distributive ideas, strategies, actions, and practices that they’ll need to take forward, and then look at the way their business is holding back those ideas and how it can evolve to can enable them. A lot of my work is focused on transforming what we call the deep design of business. This includes looking at the business’s purpose, networks, ownership model, governance model, and financial structures. In other words, the structural design elements that dictate the way decisions are made, where money goes, how investments are made, and the kind of requirements that can hold back or enabled the bold actions needed to make a degrowth or post-growth world possible. In terms of the broader range of work, we also support a community of practice — consultants, people involved in business education at different universities, experts who work in business ecosystem startup hubs. The last piece is that we look at what finance will look like in a Doughnut Economy. We’re working with an organization called Transform Finance to explore new financial models that can unlock and enable the kind of transformations we need to see in the business space.
Katherine Trebeck: I’m working for a number of different organizations that are all relevant in different ways to the idea of post growth. I’m advising the Club of Rome on their Earth for All project, particularly thinking about how we get the ideas into policy. I’m writer-at-large for the University of Edinburgh, exploring how compassion and the economy can come together a bit more and what that means. I also have two roles here in Australia: advising the Centre for Policy Development about getting ideas of collective wellbeing and preventative work at the source of the problems into government, and the Next Economy to help regions that need to go through a process of decarbonization move away from a dependency on the fossil fuel industry. On top of all of that, I’m loving doing individual ad hoc talks and writing, and giving support and advice.
Jessica Mason: Startup Coop is a nonprofit focused on cultivating the next generation of cooperative businesses with ambitions of scale. Our goal is to help folks understand that there’s an alternative way of thinking about business and ownership, that can work towards a brighter and more equitable future. We know that ownership holds the keys to lessening wealth and racial inequality. When you grow up poor, you think about the accumulation of cash or savings as your path out of poverty. But what we often fail to acknowledge is the role of ownership — whether that’s home ownership or business ownership. The wealthiest people in the world have accumulated immense wealth through business ownership. We’re interested in using business ownership as a tool to reduce inequality.
Arpita Bisht: I am a political ecologist, critical scholar, and scholar activist working on conflicts and defensive social resistance movements that emerge as a consequence of socio-economic and environmental injustice at frontiers of natural resource extraction. I’m currently working on comparative political ecology of conflicts around extraction, distribution and consumption of natural resources and the ecosystems from which they are extracted. My work is mostly on the Global South, and I work on both South-South as well as South-North comparative analysis of conflicts around ecosystems and natural resources based on the nuanced understanding of conflicts around resources. All of my solution-oriented work involves designing mineral policies at the national level as well as conceptualizing pathways towards more socio-ecologically efficient and ecologically viable ways of organizing, mineral extraction, distribution consumption, and access.
Inspired? Here’s some ideas about what you can do:
- If you haven’t already, listen to the full podcast episode for in-depth detail and discussion on the points outlined above.
- Discover the Islamic Finance Collective — an UpEffect initiative designed to advance wealth equality through just capital markets.
- Browse our Bookshop for titles that have inspired our philosophy and approaches here at the Post Growth Institute.
- Explore this detailed and engaging set of tools for business and enterprise on Doughnut Economics.
- Learn more about Startup Coop and how to start a cooperative for yourself, via their free online Lean Co-op course and range of other great tools and resources.
- Read more from our inspiring Post Growth Fellows.
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