New Internationalist

Their recession is not our degrowth!

Degrowth graffiti [Related Image]
Paul Sableman under a Creative Commons Licence

Secular (or systemic) stagnation – meaning lower potential growth in mature economies – is the ‘new normal’. This idea, already suggested by US economist Lawrence Summers in 2013, was recently re-proposed by the IMF’s April 2015 World Economic Outlook.

While this news might be surprising for some US audiences, in Europe there is a well-established debate on the merits of (de)growth that has been ongoing since at least the 1970s and which has recently been revived by the degrowth movement. Last September, Paul Krugman in The New York Times noticed that ‘anti-growth environmentalism is a marginal position even on the Left, but it’s widespread enough to call out nonetheless’.

For instance, not long ago, The Economist accused the leaders of Spanish leftwing party Podemos of supporting nutty policies like degrowth. But interestingly enough, Podemos is not alone on this in Spain. Catalonia’s Minister of Planning and Sustainability, Santi Vila Vicente from the liberal CIU party, has also launched a debate on degrowth in the Catalonian parliament. But what, exactly, do we mean by the term ‘degrowth’?

Economic growth is necessary – at least according to our intellectuals, politicians and economists. In recent years, however, ‘degrowth’ has emerged as a provocative term that questions the false consensus on the necessity of growth. Economic growth comes at a high price, one that’s not worth the costs. A more sensible alternative is to focus our political efforts on redistribution and real democracy, on prosperity without growth.

Their recession is not our degrowth!’ is a common slogan of the anti-austerity protests in southern Europe. Degrowth is the hypothesis that we can live better with less and in common, a transformation brought about by a society and an economy focused on the redistribution of resources, sustainability of life and real democracy. Our proposal is not necessarily to reduce GDP (an arbitrary indicator), but rather to ask new questions and search for alternatives to today’s society based on a predatory, unjust and unsustainable capitalist economic system.

If recession is less of the same, degrowth is simply something different. It’s a proposal to abandon the obsession with economic growth, which benefits a small minority while hurting the majority. As an alternative, we can try to establish policies and lifestyles that bring about wellbeing, social justice and ecological sustainability. Growth has failed to achieve these objectives. Studies show that growth is not correlated with individuals’ wellbeing (see the Easterlin paradox), it’s unjust and ecologically unsustainable. We can, however, achieve prosperity without growth.

Growth, which should in theory only bring about progress and increase wellbeing, carries with it a host of negative side-effects. Economic growth always has some costs, and these costs have begun to outweigh its benefits. People had to make sacrifices even before the financial crisis. For instance, in Spain, the housing bubble gobbled up the landscape, and the country now finds itself with 5 million empty houses and more than 200,000 people who have been evicted from their homes as they couldn’t pay the mortgages – but they are still in debt. Nevertheless, today even more sacrifices are being demanded from Spanish citizens.

We’ve been faced with budget cuts, labor reform or wage cuts (internal devaluation euphemistically called ‘increasing the country’s competitiveness’). All of this damage has been justified by the supposed goal of spurring growth. We are told that the economy has recovered, yet few Spaniards have seen their situations improve. Mariano Rajoy, Spain’s Prime Minister, has admitted that ‘[Spain’s] recovery has not reached everybody equally’. The truth is that these reforms have only reached the 1%.

The true crisis will only be history when it stamps out unemployment, inequality and climate change. If we can’t (or we decide not to) escape the current systemic stagnation with growth, what other options do we have? Spain is a mature economy, one unlikely to grow at 3-4% like it once did. Indeed, the housing bubble has shown that it was only possible to grow by increasing debt levels. And now, driven by this perverse logic, Spain’s economy must continue to grow so we can pay off our debts. It’s time to get out of this vicious circle.

The main concern isn’t about creating more wealth, but rather to redistribute the wealth we already have. In fact, economic inequality increased more in Spain than any other country in the OECD as a result of the financial crisis. It’s time to reverse this trend. One priority, for example, could be to address unemployment with policies like working-time reduction or establishing a universal basic income.

Not long ago it seemed impossible to convince governments not to fall into the growth trap. But governments change with elections. Today there is political fervour in Spain that looks promising. Political parties like Equo (the Green Party) and the Popular Unity Candidates Party (CUP) have spoken about degrowth for some time, and Podemos has openly criticized the mainstream obsession with economic growth. More and more people have come out individually or collectively to denounce unlimited growth and its consequences.

And there are also scholars and academics developing alternatives, like the 3,000 participants of the Fourth International Conference on Degrowth. The academic association Research & Degrowth has put together a list of 10 policy proposals – for Spain, or anywhere else with some adaptation – aimed at creating prosperity without growth, and we believe these policies have the power to create a transition toward degrowth. Naomi Klein referred to them as ‘excellent’.

The list includes, for example, getting rid of GDP as a measure of economic progress, establishing environmental limits on consumption and emissions, implementing a universal basic income, restructuring and eliminating a portion of the government debt, optimizing the use of the housing stock, limiting advertising activity, transforming the tax system and eliminating government assistance for polluting activities in favour of assistance for sustainable ones.

In Degrowth: A Vocabulary for a New Era, my co-authors and I take on this analysis in much greater detail. We hope that the book will help generate public debate and mobilize both the public and private sectors to create a more economically just society, with solidarity and respect for our environment.

Some critics accuse degrowth of being too unrealistic. But the true fantasy is thinking that the global economy can grow infinitely in a finite world. We have already seen how growth carries a very high cost that affects the basic foundations of our lives. Not only is growth not possible, it’s also not necessary and not desirable. In 1977, André Gorz, founder of political ecology and the first to use the word ‘degrowth’, put it like this: ‘Lack of realism consists in imagining that economic growth can still bring about increased human welfare.’ The time has come to face reality.

Federico Demaria is a researcher in ecological economics at the Autonomous University of Barcelona (Spain); member of Research & Degrowth (@R_Degrowth) and co-editor of Degrowth: A Vocabulary for a New Era (Routledge, 2014).

Blog translated by Antal Neville

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  1. #1 Kaz Lokuciewski 14 May 15

    Not going to change anything what the world votes for the richest liar.

    Simple solution, just needs voters to demand the rights they were foolish to have ever voted without and no honest candidate can hope to compete in the absence of.

    SMART-voter.org

  2. #2 Steve Bean 14 May 15

    Rather than ’create a more economically just society’, which I think is an impossibility, a critical mass of people could realistically choose a sane society by ending the global cultural belief in the concept of exchange and the corollary use of money, effectively eliminating what we refer to as ’the economy’, after which degrowth would occur naturally.

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