The limits of degrowth

According to theory of degrowth, the only way to save the planet and humanity from catastrophic collapse due to depletion of natural resources would be to radically limit, and even reduce, global production levels and, since there is still a large part of the population living in intolerable levels of poverty, and the only fair thing in order to bring them to the well-being of the others, is if, in the countries that now enjoy a GDP per capita above the average, we agree to reduce our own production and consumption levels by a very considerable magnitude. To put some figures: global GDP per capita is today about $12,000 per year. In developed countries, on the other hand, that figure is approximately three times that one. So, if all the inhabitants of the planet were to enjoy the standard of living corresponding to the global average, in the West we should have to reduce our standard of living to approximately one third of what we currently enjoy, which is equivalent to living with the per capita income that existed in our countries around the 1950s. Furthermore, if we think that global GDP is excessive for the capacity of the planet, and that it would have to be reduced – say – by half in order to guarantee our survival, then we are talking about reducing our level of economic well-being to one sixth, a decrease of more than 80%; that is, more or less to the levels of the mid-nineteenth century. It is not surprising that such an economic policy proposal falls short of arousing enthusiasm in any democratic election.

Like almost all delusional ideologies, degrowth theory is based on something that sounds like an absolute no-brainer: the thesis that unlimited economic growth cannot occur on a planet with limited natural resources. If to this statement we add the idea that capitalism can only persist under permanent and exponential economic growth, we easily arrive at the most important conclusion that degrowthists ultimately want to lead us to, that it is absolutely necessary to put an end to capitalism. Unfortunately for believers in this new religion, the truth is that both premises of the argument are highly misleading.

The first premise, that infinite progress is not possible on a finite planet, contains three main flaws. In the first place, the progress that really matters to us is not that of total GDP, but that of GDP per capita. If in the coming decades the rate of demographic growth continues to decline, and the world population begins to decline, it could well be that in the next century we will have a global per capita income two or three times higher than today, with a total GDP only slightly higher than nowadays. Second, GDP does not measure the amount of natural resources that are used, or something like that, but the economic value of the products made using those resources. In this way, economic progress does not consist only, nor even mainly, in enjoying more things (although getting out of poverty also requires a lot of that), but above all in having much better things at our disposal – safer, healthier, easier to use, less polluting, or that can be manufactured at a much lower cost and use of resources. And, in fact, the economic progress of the last few decades is proceeding largely along that path. And thirdly, and probably even more important, no one is looking for something like unlimited or infinite economic progress: what we want is just that the standard of living of humanity progresses a lot (for example, that the economic well-being of the vast majority of the population at the end of this century were similar to what countries like Finland or Denmark now have), but that is infinitely far from being “infinite”, and therefore there is no reason a priori to think that the limited natural resources available in the planet, used intelligently, will be insufficient to allow just that.

The second premise, that capitalism requires exponential economic growth, also hides several fallacies. The most important one is that the concept of capitalism that is used in it is nothing more than a conceptual wimp, one that, rather than help us understand how the economic system really works, is limited to accumulating without rhyme nor reason any of the aspects that many people dislike about the current economy (inequality, the existence of poor countries, globalization, the destruction of the environment, or the inauthenticity of consumerism). The truth is that our economic system has many features that it is appropriate to designate as “capitalist” (for example, that production is carried out mostly by private companies, that consumption and investment decisions are usually done in more or less free markets, that the search for profits is the main engine of companies, and that earning a lot of money, in general, is considered by almost everyone as one of their main objectives in life), but we must not forget that this same economic system also has many fundamental characteristics that make it absurd to consider it as a purely capitalist system (above all, the fact that in most advanced countries the state collects practically half of all private income in the form of taxes, provides numerous public services, employs directly or indirectly about a quarter or a fifth of the active population, and regulates almost all economic activities to a greater or lesser degree). When the preachers of degrowth tell us to end capitalism, it is often unclear exactly which of those things they think it necessary to end, although it seems reasonable to suspect that a project such as theirs, whose goal is to drastically impoverish almost everyone in the developed countries, it will be impossible to carry it out except with something very similar to an absolutely centralized management of almost all economic activities, and not only at the level of one state, but at the same time throughout all the world, that is, through a kind of world economic dictatorship. And, since it is also quite difficult to imagine that the vast majority of the population is willing to voluntarily advance along that path, it is also logical to suspect that a project such as degrowth would have no choice but to do without, not only “capitalism” but, what is much more important, without democracy itself.

Convinced (like so many other visionaries throughout history) of the absolute sanctity of their ends, degrowthers stubbornly refuse to think seriously about the profound large-scale political infeasibility of their proposals and take refuge behind a wall of further fallacious arguments. For example, the argument that degrowth “is not an option”, but that we will have to go towards it “by hook or by crook”, that is, either by accepting it now and putting ourselves in its benevolent and wise hands or waiting for environmental collapse to come and suffer much worse consequences. But the truth is that the fear of a catastrophic collapse worthy of the name is far from justified, and, in any case, the current political-economic system is much more likely to allow us to circumvent the worst environmental problems and the possible lack of resources, than a kind of fanciful global degrowth dictatorship, one that deep down nobody knows how we could manage to make it work for more than a few weeks, nor do we have the slightest certainty that the attempt to institute it would not lead humanity to a global conflict infinitely more terrible than those of the past century.

Lastly, another of the fallacies of degrowthers (like that of almost every totalitarian ideology) is to pretend that, in fact, true democracy is the one they intend to establish, since it would eliminate any accumulation of political and economic power by current oligopolies and would let the true voice of the people be heard for the first time, or anything like that. In addition, they often resort to the strategy of showing that, when an assembly is organized with ordinary citizens who can freely deliberate on these issues, the result tends to be that everyone ends up agreeing that on reducing energy consumption, restricting the use of private transport, limiting air travel, eliminating plastics, eating much less meat, stopping deforestation, and a long list of similar beautiful wishes. However, the fact that most people do not voluntarily follow these recommendations in their private lives, and that they prefer not to vote for parties that propose to make such measures mandatory, this fact does not seem to be able to convince degrowthers that what people supposedly “freely and reflectively agree” in those “Playmobil assemblies” (as I have called them elsewhere) is not what people really want and think, but only the result of subjecting a small group to the pressure of trying to show off as “good fellows” before officiants who present those dreams as the only possible moral truth.

References

Kallis, G., In Defense of Degrowth, New Publisher, 2021.

McAfee, A., More from less, Scribner, 2019.

Meadows, D. H., The Limits to Growth: The 30-Year Update, Chelsea Green, 2012.

Shellenberger, M., Apocalypse Never, Harper, 2020.

More on the subject:

The environmental justice movement meets Economics