The 20th century saw unprecedented growth in all areas of the economy, mainly in the developed world. Capitalism is based on the idea of constant economic growth, and GDP (gross domestic product) is used as a measure of economic health. GDP is the total market value of all goods and services produced by a country in a specific time period. The problem with GDP is that it doesn’t measure important things like environmental health or human happiness. In fact, it measures “everything except those things which make life worthwhile”, as Robert F. Kennedy pointed out back in the 1960s. Even in terms of economic growth, GDP is a very skewed measure. For example, an increase in crime might result in an increase in GDP as it may give rise to increased sales of security systems and house alarms. So GDP tells us very little about what we really need to know.
We all know the toll that constant unstoppable production has taken on the planet. We now have less than 10 years in which to massively reduce global CO2 emissions, or else we face a warming of 2°C which would be disastrous for the planet.
Similarly, economic growth does not make people happy. The U.S. economy is 5 times bigger now than it was in 1960, yet in 2018 Americans only ranked 18th on the World Happiness Report. We also know that many people don’t particularly enjoy their jobs, or are unhappy or depressed for other reasons – be it alienation, a feeling that life lacks meaning, overwork, stress, addiction, weight or health issues, or a host of other reasons. Economic growth certainly is not going to solve these problems. It may even have contributed to them.
What is degrowth
The Italian word for degrowth is “la decrescita” – referring to a river going back to its normal flow after a disastrous flood. Right now the ‘flood’ – both literally and figuratively – is not too far off, so degrowing the economy seems the right thing to do.
Degrowth is defined as a conscious set of policies designed to optimize human and planetary wellbeing while minimizing inequality, poverty and environmental harm. It is a recognition that ‘more’ doesn’t mean better and that economic growth does not make us happier. Degrowth acknowledges that economic growth in predominately western nations has come at the expense of developing countries, and at a tremendous cost to the planet and its ability to sustain life – to such an extent that we are now on the brink of environmental disaster. It calls for a future where societies live within their ecological means.
Degrowth not only challenges the idea of GDP as an overarching policy objective but proposes a shrinking of the economic system to leave more space for human cooperation and ecosystems.
In short, life in a degrowth economy would involve less work and more time together, less individual ownership and more sharing, less debt and more services provided by the government. It would mean more time doing things we enjoy, and less time working to pay for things that we don’t need and may never use. It means a greater sense of community and connection, rather than the current focus on individualism and consumerism.
Limits to Growth
In 1972 a report called “The Limits to Growth” was published by the Club of Rome. It showed that, in any of a series of computer-generated scenarios, world economic growth would end sometime during the 21st century. It looked at variables such as population, fertility rates, mortality rates, industrial output, food production, non-renewable resources, the environment and human welfare. Using simple maths and logic, it showed that growth cannot continue indefinitely within a finite system and that if everything continued in a ‘business as usual’ scenario society would collapse.
A recent study by Herrington showed that the study’s prediction was accurate. Economic growth, if it continues on its current path, will then decline sharply, resulting in great societal upheaval.
Degrowth is synonymous with the following economic theories:
1. The Wellbeing Economy:
- This is a theory that the economy should be the people’s servant, not its master.
- Economic success should be measured in terms of how happy and healthy its citizens are.
- The economy must take account of planetary boundaries, and should support a thriving ecological system.
- Scotland, Iceland and New Zealand have all recently pledged to put wellbeing ahead of economic growth.
2. The Steady State Economy:
- This is a way of organizing the distribution of goods, resources and funds that does not need to grow.
- In a steady state economy, people consume enough to meet their needs without undermining the life-support systems of the planet.
- People choose to consume energy and materials responsibly, conserving, economizing, and recycling where appropriate.
- Conspicuous consumption becomes a thing of the past.
- The population would remain stable.
- Emphasis on community and local economy, local businesses, local employment and local resilience.
- Reduction in the working week and job sharing.
- Tax exemptions for co-operatives, social enterprises, community land trusts, opening up resources to community groups.
- Sensible housing and co-housing.
- Curbs on advertising.
- Establishing environmental limits.
- Abolition of GDP as an indicator.
3. Doughnut Economics:
- Doughnut economics is not an economic ‘model’ as such – it is simply a set of indicators and limits within which it is desirable to live – these are represented by the doughnut-shaped diagram below.
- We should not live beyond planetary boundaries (ie. outside the doughnut), and equally we should not live without the basic human needs of food, shelter, clothing, energy, education, health, peace and justice (ie. the centre of the doughnut).
4. Circular Economy:
- A circular economy is a system in which everything that is manufactured and sold is either returnable, recyclable, reusable or repairable, and waste is eliminated.
- You can read more about the Circular Economy in a previous issue of VSM.
5. Local Economy:
- There would be local employment, local businesses and local services.
- Local businesses source their products from other local businesses.
- Emphasis on farmers markets, community markets, community supported agriculture (CSAs).
- People would avoid buying imported goods and avoid exporting goods.
- Strong emphasis on local community and local resilience.
6. Post Growth economy:
- Acknowledges limits to economic and population growth.
- There is a shift in focus from metrics such as GDP to new ones such as Gross national happiness (GNH), the Happy Planet Index, and other measures of well-being.
- Uses wisdom gained in the growth-based economic era (and before it) in order to transcend to sustainable futures.
- Emphasis on cooperation, sharing, social justice and ecological stewardship, on local as well as global levels.
7. Green economy:
- In a green economy, the profit motive is replaced by business models which emphasise sustainability and respect for nature.
- There is a move to renewable energy, decarbonisation, green buildings, sustainable transport and waste management.
- Green economics recognizes that there are a set of basic goods and services that are essential to meet people’s wellbeing and dignity, as well as unacceptable ‘peaks’ of consumption.
- It aligns prices, subsidies and incentives with true costs to society, through mechanisms where the ‘polluter pays’ and/or where benefits accrue to those who deliver green outcomes.
- It takes a long-term perspective on the economy, creating wealth and resilience that serve the interests of future citizens, while also acting to tackle poverty and injustice.
- A green economy is sometimes mistaken for green growth, but it should be pointed out that green growth approaches do not fully account for the underlying economic systems change needed in order to address the climate and biodiversity crisis and environmental degradation.
Degrowth is also synonymous with the following movements:
- The Slow Movement
- Transition Towns movement
- Permaculture movement
- The Vegan movement
- The Commons
- Open Source
- Community Land Trusts
- Timebanking and Skill sharing
- Forest Schools and Home Schooling
- Zero Waste movement:
- Freecycle movement
- Library of things
- Right to Repair (end to planned obsolescence)
- Buy and Sell (trade in used goods between individuals)
- Swap and Barter
- Stop Food Waste
- Refill (zero waste) stores
- Buy Nothing movement
Additionally, many degrowth commentators point out that inequality and the divide between rich and poor needs to be addressed. This can be done in a number of ways:
- Shorter working weeks.
- Reducing income and wealth inequality.
- A guaranteed minimum income.
- Progressive taxation and a maximum income.
- Expanding public services including healthcare, education, public transport, affordable housing, basic quotas of energy and water, parks & sports grounds.
- Having governments create money rather than banks.
- Debt cancellation for developing nations.
Divestment from fossil fuels is also intrinsic to degrowth, as is the scaling down of industries such private jets, the arms industry, single use plastics and industries with long distance supply chains. The vegan movement also contributes to degrowth by bringing to an end the exploitative and environmentally damaging animal agriculture and fishing industries.
How can I take action towards degrowth?
Change your consumption patterns:
- Buy second hand.
- Freecycle your unwanted items.
- Go to clothes swap events.
- When buying new, pay more for items as they will last longer.
- Rent if you don’t need to buy.
- Keep items repaired or bring them to a repair shop or repair cafe.
- Share and borrow equipment such as DIY and tools which you don’t use often.
- Join a timebank, share your skills and time, and request skills or help when you need it.
- Go Vegan.
- Buy local if possible.
- Buy unpackaged food from refill shops, local markets or greengrocers.
- Cook your own meals from scratch – this means you’re less likely to be consuming products in plastic from supermarkets, which are also likely to have been imported from abroad.
Energy in the home:
- Insulate your home.
- Install solar panels or heat pumps.
- Sign up with a renewable energy provider.
- Car pooling and sharing.
- Public transport.
- Holiday at home.
- Travel by train instead of plane.
Many people are already taking steps in their own lives to reduce their consumption of material goods and fossil fuels. But governments and political parties also need to be on board. Degrowth articles and websites are often lacking in specifics – they lack detail as to how the various policies could or would be carried out. A great deal of discussion would be needed before deciding on specific policies. Degrowth is a complex area, and changing the way we do things may have unseen effects that must be considered in advance. One thing is certain – we don’t have a lot of time. We really need to start talking about degrowth now. If we wait any longer it will be too late.