Well-being Without Growth: Degrowth Policy Proposals
Over the past decade there has been a wide array of research into the conditions under which social and ecological well-being can be sustained and improved in the absence of growth. This research, which has come from academic, grassroot and civil society levels, represents concrete steps towards the realisation of the degrowth vision outlined in article 1. Though variances exist within and between these sectors, there is general agreement over a range of policy reforms that could facilitate a stable transition in the direction of degrowth. I categorise this degrowth policy package into seven key areas.
1. Alternative Indicators
The first common proposal is for the abandonment of GDP as a measurement of progress and its substitution with more holistic indicators of social and ecological well-being. That GDP is a poor measure of well-being is well established in degrowth literature (van den Bergh 2009; Victor 2015; Kallis et al. 2012). It does not account for unpaid work and counts social and ecological costs, commodification and commercialisation as benefits. Furthermore, the focus on GDP as a primary policy objective can sometimes act as an impediment to the development of policy alternatives that could potentially contribute more directly to well-being.
There are a variety of more holistic measurements of welfare and progress with which GDP could be replaced. These range from the GPI and ISEW mentioned in article 5, to the Gross National Happiness index utilised in Bhutan or the Thriving Places Index pioneered in Bristol. As Meadows (1998) observes, “changing indicators can be one of the most powerful and at the same time easiest ways of making system changes”.
Ultimately, if the wider objective is a transition in the direction of degrowth, then it is essential to develop clear indicators which can guide and measure a nation’s progress along such a transition. This task is taken up by O’Neill (2012), who develops a unifying conceptual framework of social and biophysical indicators drawn from the goals of the degrowth and steady-state movements.
Two additional reasons reinforce the importance of developing such indicators. First, at the political level, that which is measured typically gets done, while that which is not tends to be ignored — we care about what we measure. Secondly, indicators are a valuable communication tool. Reliable indicators and targets can be utilised to raise awareness of the social desirability and ecological necessity of degrowth and to construct a positive vision of what a degrowth transition might encompass.
2. Decoupling Employment and Growth
The second area of policy focus is employment. Without growth unemployment is anticipated to rise as productivity gains render workers redundant; the assumption being that without growth to generate new jobs unemployment will increase as the amount of workers that are required to complete a given task declines with gains in technological efficiency and productivity. In a degrowth transition it is therefore necessary to devise new welfare institutions to decouple paid employment from growth[1].
A job guarantee and work-sharing scheme are seen as key strategies for achieving this. A job guarantee is a proposal to make national governments an employer of last resort, effectively reducing unemployment to zero. Such a proposal holds potential to foster employment in socially and ecologically beneficial areas such as localised food projects, ecological restoration, care, health and education services or free software production (D’Alisa et al. 2015). This is essential in ensuring a just transition for workers of industries that are anticipated to gradually scale down in a degrowth transition, such as the fossil fuel industry.
It is also a possibility that a degrowth transition may experience less of an unemployment problem than anticipated as it is likely to be a more labour-intensive economy (Heinberg 2006; D’Alisa et al. 2015). As Kallis (2018) shockingly notes “a barrel of oil contains the equivalent of 10,000–25,000 hours of free human work”. In a future of declining fossil fuel use, whether it be due to caps on extraction or peak-oil, humans will more than likely need to do more physical work.
Work-sharing, or a shorter working week, involves the redistribution of paid work between the unemployed and employed through a reduction of working hours. As Jackson (2009) and Kallis et al. (2013) have demonstrated, less working hours per worker means more jobs for everyone to share. Not only does work-sharing allow for the creation of employment in the absence of growth, it is also associated with reductions in carbon emissions and ecological impact (Knight et al. 2013). As time is liberated from the market economy, more time and energy are available to be spent in reproductive activities, in care or cooperative economies, or in simple idleness — activities which entail positive social and ecological benefits. To offset reductions in hours of paid work it is important for work-sharing to be accompanied by other interventions such as a Universal Basic Income (UBI), living wage policy and expansion of social services. These measures represent the third policy area.
3. Decoupling Well-being From Paid Employment
Just as important as decoupling paid employment from growth is the decoupling of well-being from paid employment. A UBI, expansion of universal social services and reinstating of the commons are potential measures for securing a basic level of security and subsistence for all. A UBI is an income that is guaranteed to all citizens for life. Akin to work-sharing, a UBI facilitates redistribution in favour of the unemployed, people on low incomes and those engaged in the care economy. It is important that a UBI is accompanied by a basic living wage, or guaranteed minimum wage, so as to ensure it does not lead to reduced wages. Admittedly, there are several concerns surrounding the implementation of a UBI[2], foremost of which is its financing[3]. Potential mechanisms for financing will be explored in the following policy suggestions.
A potential accompaniment to a UBI is the expansion of universal social services and a reclaiming of the commons. Such an expansion of public services or common goods — which encompass universal access to affordable housing, public transport and food, public healthcare and education as well as access to recreational activities and public spaces — could ensure that everyone has access to the goods and services required for a good life without needing high salaries. This economic restructuring would reduce private riches whilst generating an abundance of public wealth (see Hickel 2019).
Such a step is fundamental in liberating people from the artificial scarcities — and the concomitant pressures for competitive productivity and consumption — that capitalism produces (Akuno 2019; Hickel 2019). The expansion of public goods and services held in common, and the promise of economic security that they hold, can therefore be seen to be an essential antidote to growth. This idea is of central importance in the political realisation of degrowth, and will be explored in more depth in article 11. Again, possible solutions to the concerns over the financing of such services in the absence of growth will be investigated in the following policy recommendations.
4. Fiscal and Monetary Reform
The fourth policy area of focus for a degrowth transition concerns fiscal and monetary reform. Money issued as debt currently creates a growth dynamic — debts are repaid with interest and interest requires growth. There is therefore likely to be a greater difficulty in repaying debts in an economy without growth. One method for compensating for this difficulty is to restructure and eliminate particular debts through a debt jubilee (Graeber 2011; D’Alisa et al. 2015). This process could be facilitated via citizen-run debt audits, which could determine the legitimacy or illegitimacy of specific debts (D’Alisa et al. 2015). A related proposal is for governments to reclaim the capacity to issue debt-free public money from private banks (see Mellor 2010).
Such a process would likely involve the imposition of a 100% reserve requirement or socialisation of private banks (Daly & Farley 2004; Mellor 2010). Whereas private banks lend money as debt through loans, public money could be issued by the State free of debt (see Mellor 2010; D’Alisa et al. 2015). Such a shift would improve public finances as governments would no longer be forced to borrow from the banking sector at interest to finance public expenditures and would also recuperate the seigniorage from which private banks currently profit.
Perhaps most importantly, States would also recover a greater ability to direct money to democratically determined projects of social and ecological value (Mellor 2010). Potential projects could include the UBI or expansion of public services mentioned above or subsidies to renewable energy development. While there is a danger of fund misallocation, Kallis (2018) sees inflation as less risky than in the current system. Democratic processes of participatory budgeting could act as a further safeguard.
5. Taxation Reforms
The fifth component of the degrowth policy package is taxation reforms. As Hickel notes, the central characteristic of degrowth economics is that it inverses the logic of growth through a progressive redistribution of income. One mechanism for achieving this is through green tax reform — to begin taxing energy and resource use or ecological damage instead of income (Daly 1996). This shift favours low-carbon enterprises and cooperatives by incentivising the consumption of low-carbon goods over high-carbon ones.
Furthermore, given that the overall tax base is likely to shrink in a degrowth transition, shifting taxation from income to resource use is one means of securing a source of revenue for governments. One variant is a carbon dividend, where the revenue sourced through a carbon tax is redistributed equally to all citizens as a means of compensating for the potential increased prices of goods and services that an ecological tax could bring about (Kallis 2018). A carbon tax and dividend could also be utilised to provide tax-cuts to lower-income earners or as another means of financing a UBI or expansion of common goods and services.
As Piketty (2014) demonstrates, without policy adjustment inequality is likely to increase in the absence of growth, as the percentage of surplus that returns to capital increases. There are a number of redistributive tax proposals that could compensate for this dynamic. These reforms range from a global wealth tax, a minimum corporate tax and taxes on financial transactions to inheritance or estate taxes (Latouche 2009; Piketty 2014). Additional lines of tax reform which could facilitate greater redistribution are a maximum wage policy, which could be set in proportion to a minimum wage, or higher marginal tax rates for the top income bracket.
The 80% top marginal tax rate which the US averaged between 1937–1983 shows there is a precedence for this (see Bradford Tax Institute 2019). Again, the revenues generated by such reforms could be invested in public services or contribute to the funding of a UBI. In addressing criticisms that such reforms would discourage the technological innovation needed for the proposed decarbonisation of the GND, Mastini (2018) observes that the rate of economic innovation in the US was higher in 1980 than it is today. This is despite the top marginal tax rate being substantially higher in 1980 than it is at present.
6. Investment Policy
The sixth policy focus of a degrowth transition is on investment policy. A restructured economic investment programme could work to redirect public investments from dirty, polluting infrastructure and activities towards investments that reclaim the commons and green the economy. Such a programme would involve a gradual divestment and withdrawal of subsidies from fossil fuel projects, private transport infrastructure, military technology, industrial agriculture and other ecologically harmful sectors (Kallis et al. 2018).
It is crucial that this redirecting of investment be accompanied by generous retraining support and the welfare services discussed above to ensure a just transition for workers in these industries. The liberated funds could then be put towards investments in clean sectors that provide ecological and social value and meaningful employment. Ideas include subsidies for public transport, community land trusts and affordable housing, small-scale organic farming and renewable energy projects as well as improved public services and public spaces and an expansion of education, health, care and ecological restoration services (Jackson 2009; D’Alisa et al. 2015; Kallis 2018).
Investment policies could also ease concerns over a degrowth transition negatively impacting rates of decarbonisation. Pollin (2018) argues in favour of growth on the assumption that higher levels of GDP will correspond to increased levels of investment in renewable energy projects. An alternative approach, however, is to simply determine a fixed level of investment — one that is independent of GDP — that could achieve the necessary rates of decarbonisation and structure investment policies and subsidies accordingly.
7. Emissions and Resource Caps
While the six areas of policy reform suggested above hold great potential for sustaining and improving social and ecological well-being without growth, to ensure a reduction in energy and material throughput, they must be accompanied with absolute and diminishing emissions and resource caps. This is the final element of the degrowth policy package. The dominant proposition is to ‘cap and share’ (Kallis 2018). This involves setting legal caps (based on the most up-to-date scientific evidence on ecological limits) on the total amount of emissions and resources that can emitted and extracted.
These caps would be tightened annually until human activity reaches equilibrium with planetary boundaries. The remaining carbon budget and resources would then be evenly distributed and shared, through the progressive taxation or carbon dividend approaches previously discussed. As Kallis (2018) notes, an international agreement is necessary for such a scheme to be successful. Emissions and resource caps could be preceded or accompanied by extended warranties on products, the introduction of a right to repair, the banning of planned obsolescence, the banning of advertising in public spaces (as São Paulo and Grenoble have taken steps towards) and fees on food waste as seen in South Korea, Italy and France.
These reforms are by no means comprehensive or complete. They require further elaboration, investigation, scenario modelling and research. Likewise, their suitability will evolve over time and context. What they do provide, however, is a clear set of initial ideas for how social and ecological well-being might be sustained and improved in the absence of growth. To this extent, they represent a key step in the political realisation of degrowth.
In the current climate, the implementation of this broad series of policy reforms certainly appears politically challenging, if not impossible. Kallis (2018) suggests that they can be seen as non-reformist reforms, the implementation of which would necessitate the very contours of the system to be radically changed in order to accommodate them. Büchs & Koch (2019) similarly argue that such reforms would likely demand a fundamental social transformation. Having made the case for degrowth in the preceding articles and having here outlined how social and ecological well-being might be secured without growth, the remaining series of articles will explore some ideas over how a social transformation in the direction of degrowth might be realised.
Footnotes:
[1] The importance of labour policies and welfare institutions is demonstrated in the differing impacts of growth on unemployment in Japan and Spain. In Japan, a one per cent reduction in GDP gives rise to a 0.15% increase in unemployment, whereas a similar reduction in GDP in Spain leads to a 0.85% rise in unemployment (Ball et al. 2013; Kallis 2018).
[2] One major concern is that a UBI monetises basic needs, thus exacerbating commodification, while another is its potential to reinforce negative attitudes over migration (Kallis 2018).
[3] While a UBI is often portrayed as an excessively costly programme, Spanish modelling scenarios indicate that a UBI of €400–600 a month could be financed via tax rises that would leave lower and middle income tax rates untouched (Kallis 2018).
References used for this article can be found in this post.
