No Growth Economy

The argument

The argument begins from a physical constraint and works out what an economy must look like if it is to respect it. Perpetual growth and accumulation is impossible on a planet with finite space and resources. An economy that must expand every year in order to function is an economy that requires an input which does not exist, which means the requirement will eventually be enforced by the planet rather than by policy. On this account the question is not whether growth ends but whether it is ended deliberately. Ending it deliberately means adopting measures that a growth economy treats as damaging, and proponents accept that framing openly. Shorter working weeks reduce output and the income that drives consumption. A Universal Basic Income decouples subsistence from the requirement to produce. Controls on advertising suppress demand that would otherwise have to be met by production. Each of these is often seen as "bad" for classic growth economies, and each is proposed for precisely that reason. Alongside them sits progressive taxation, which serves a different function. Stalling growth without redistribution would simply freeze existing inequality, since those with little would have no prospect of more. Redistributing the wealth we have already amassed allows living standards to be raised without the total having to rise, which is what makes a no-growth economy politically survivable. The intended result is a society that cuts out unnecessary production while maintaining standards of living. The reduction falls on output that exists to sustain the growth requirement rather than on what people actually need. Because an economy premised on perpetual growth cannot be reconciled with a finite planet, proponents conclude, capitalism is intrinsically unsustainable.

Context

Ideas around degrowth in an ecological setting began in the 1970s with the European "écologie politique". A famous work, "‘Demain la décroissance’" ('tomorrow, degrowth') by Nicholas Georgescu-Roegen was published in 1979 Degrowth has re-entered political consciousness following the 2008 Economic Crash. Since 2008 there have been a series of international gatherings and conferences centred around degrowth and climate change. It is connected to a host of policies, including Universal Basic Income, a reduction in working hours and progressive taxation.

Premises

Counter-arguments

Debt becomes a major problem in no-growth economies. In normal economies, the rate of interest on debt is offset by increases in the size of the economy. In no-growth economies, debt as percentage of GDP would increase, making further borrowing more expensive. Governments would find themselves unable to borrow and unable to get out of debt, and the finance sector would collapse. Equally, one could point to the reducing costs of renewable energy sources, and the possibility of human expansion into the solar system, as signs that the space and resources of the planet are not as finite as suggested. Ending growth would have far-reaching repercussions on many social structures, including the sale-investment-growth cycle of market forces. This would be incredibly disruptive and require an enormous cultural shift.

Rejecting the premises