COVID-19 has indirectly raised the issue of degrowth. The forced closure of sectors of the economy has forced people to consider what consumption is really essential. In Covid, we have prioritised public health over GDP. Accepting very large falls in GDP, in return for getting on top of virus and protecting vulnerable people. The question is whether the experience of COVID-19 will encourage more discussion about issues that are more important than growth.
What is degrowth?
Degrowth is a political and economic theory that emphasises changing society’s priorities from economic growth and production to a society based on sustainability, well-being, concern for the environment and cooperation. The motives for pursuing degrowth include providing environmental sustainability for the long-term and improving quality of life. Critics argue degrowth is a luxury of the middle classes and many very poor still need to see economic growth to lift them out of poverty.
Degrowth: Its Origin
Some of the first ideas regarding preserving the environment and the excessive exploitation of natural resources emerged at the end of the Second World War. However, it was in the early 1970s that the concept of degrowth took off, with the publication of The Entropy Law and the Economic Process, a book by Nicholas Georgescu-Roegen that was quickly followed by the work of the Club of Rome with the Limits To Growth Report in 1972. As a result, a couple of intangible principles were found and grounded:
- A large part of the resources humans use and rely on are dependent on ecosystem services and are limited;
- Each withdrawal of non-renewable resources has the potential to jeopardize the long-term survival chances of humanity;
- Infinite growth (demographic, economic …) in a finite world is impossible.
Things you should know about degrowth
We are used to hearing politicians and policy wonks talk about economic growth, celebrating when it goes up, and selling their pet projects and policies as the key to boosting growth. The problem is, as the economy expands, so does our consumption of resources. Waste, emissions and other pollution go up, too. This is why many are asking can we really keep infinitely expanding our economies on a planet of finite resources?
1. Our obsession with GDP
It was only in the mid-20th century that gross national product (GDP) became the go-to measure of economic success, providing a metric for competition between capitalism and communism. Expanding GDP became increasingly central not only to economic policy but just about every global project aimed at making the world a better place. GDP as a tool for measuring growth is increasingly questioned. Indeed, as an answer to its inefficiency, distinguished economists are working on more relevant ———–and comprehensive alternative indicators, such as the Human Development Index (HDI), the—– ecological footprint or the social health index.
2. Economic growth doesn’t help everyone
The benefits of economic growth have increasingly been going to the super-rich, with the divide between rich and poor yawning ever wider. Developing countries tend to have high growth rates, as more people have disposable income and more markets open for consumer goods. But in industrialized countries, growth generally slows, and efforts to speed it up to don’t necessarily result in a better standard of living for most people.
3. A degrowth economy could mean more free time
We know we should consume less, and consume more carefully, share and repair appliances, cycle rather than drive, take the train instead of flying. But these things can feel like big sacrifices that, individually, have little impact. We’d be poorer in stuff, but richer in time, replacing the sugar-rush of consumerism with more profound pleasures, such as community and creative pursuits — be they the arts or growing our own food. We would have time to volunteer and share resources, engage in direct democracy, and develop alternatives to a profit-driven economy.
4. Some sectors would shut down, but others would flourish
Degrowth isn’t about slamming the brakes on the entire economy and sliding into a painful recession. Instead, the focus would shift to sectors — like care, education, renewable energy and public transport — that improve human and ecological wellbeing, rather than those that attract investment purely because they generate profit. In an economy shaped for people, not profit, better public services and a fairer distribution of wealth would mean that more of us could afford to live well, on less.
Criticisms of degrowth
Economic growth reduces poverty. For many developing economies, economic growth has enabled many people to be lifted out of poverty. Degrowth may seem a good idea for advanced western economies, but for those in developing economies with widespread poverty, economic growth and higher output make a significant difference to living standards.
The term is confusing. Degrowth implies a negative connotation of lower living standards. We are so used to growth being considered a good thing, that degrowth implies less. A better term would be to focus on notions of positive well being. Some have criticised degrowth for placing too much emphasis on economic growth, when the real key is not reducing growth, but promoting growth that helps the environment. For example, supporters of the Green New Deal argue, investment in renewable energy can lead to higher growth and a better environment. The term degrowth originated from Italian and French words and the translation has different connotations in English.
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