Apologists for growth: passive revolutionaries in a passive revolution

Popular authors and international organizations recommend transformation to a ‘new economy’. However, this is misleadingly interpreted as radical or revolutionary. Two problematic positions are revealed: being pro-growth while seeking to change the current form of capitalism (e.g. Ha-Joon Chang), and being anti-growth on environmental grounds but promoting growth for poverty alleviation and due to agnosticism about growth (e.g. Tim Jackson and Kate Raworth). Both positions involve contradictions and an evident failure to address, or perhaps even a denial of, the actual operations of capital accumulating economies. Thus, economists ostensibly critical of capitalism turn out to be apologists for growth who conform to the requirements of a top-down passive revolution, that leaves power relations undisturbed and the economic structure fundamentally unchanged. The growth economy is shown to include technocracy, productivism associated with eugenics, inequity disguised as meritocracy, competition concealing militarism and imperialism, imposition of development as progress, and financialization and commodification of Nature.

Globalizations, October 2020

Policies for Equality Under Low or No Growth: A Model Inspired by Piketty

GDP growth is declining in industrial economies, and there is increasing evidence that growth may be environmentally unsustainable. If growth falls below returns to wealth then inequalities increase, as Thomas Piketty recently showed. This poses a challenge to managing slow and/or negative growth. Here, we examine policies that have been proposed to solve the problem of increasing income inequality in slow- or non-growing economies, including redistribution, taxation, and employment reforms. We construct a simple model, expanding Piketty’s recent work, to evaluate the parameter ranges within which these different policies can be effective. Our analysis leads to two main findings. First, except in the case of complete wealth equality, any strategy to prevent increasing income inequality must reduce returns to wealth below the rate of growth. Second, several strategies may prevent an increase in income inequality during periods of low growth and may slow rising inequality, but not prevent it, in non-growing economies.

Review of Political Economy, 26 June 2020

Feasible alternatives to green growth

Climate change and increasing income inequality have emerged as twin threats to contemporary standards of living, peace and democracy. These two problems are usually tackled separately in the policy agenda. A new breed of radical proposals have been advanced to manage a fair low-carbon transition. In this spirit, we develop a dynamic macrosimulation model to investigate the long-term effects of three scenarios: green growth, policies for social equity, and degrowth. The green growth scenario, based on technological progress and environmental policies, achieves a significant reduction in greenhouse gas emissions at the cost of increasing income inequality and unemployment. The policies for social equity scenario adds direct labour market interventions that result in an environmental performance similar to green growth while improving social conditions at the cost of increasing public deficit. The degrowth scenario further adds a reduction in consumption and exports, and achieves a greater reduction in emissions and inequality with higher public deficit, despite the introduction of a wealth tax. We argue that new radical social policies can combine social prosperity and low-carbon emissions and are economically and politically feasible.

Nature Sustainability, March 2020

Defending limits is not Malthusian

“Self-limitation is not about constraining, but about defining collectively as societies our limits.”

This blogpost introduces the key ideas of Giorgos Kallis’ new book Limits. Why Malthus was wrong and why environmentalists should care (Stanford University Press, 2019)

Why Branko Milanovic is wrong about de-growth

Introduction: Branko Milanovic has written a blog post titled “The illusion of degrowth in a poor and unequal world”. He penned it, he says, following a conversation he had with a proponent of degrowth.

As it turns out, that proponent was me.

First, let me say that I have a lot of respect for Milanovic’s work on inequality. I cite him all the time. But unfortunately he doesn’t have a strong grasp of degrowth. Let’s look at his argument in detail.

Chronology of the discussion
Original blog post by Branko Milanovic “The illusion of “degrowth” in a poor and unequal world”
First reply by Jason Hickel “Why Branko Milanovic is wrong about de-growth”
Reply by Branko Milanovic “The illusion of degrowth: Part II”
Second Reply by Jason Hickel “De-growth is feasible: people want a new economy”

The illusion of “degrowth” in a poor and unequal world

Introduction to the article by the author: I have recently had Twitter and email discussions with a couple of people who are strong proponents of “degrowth”. From these exchanges I got the impression that there were unaware of just how unequal and poor (yes, poor) the world is today and what would be the trade-offs if we really were to decide to fix the volume of goods and services produced and consumed in the world at the current level.

This is just an attempt to present some back-of-the-envelope calculations that should be improved very much in a serious attempt to examine the alternatives.

This blog post started a discussion between Branko Milanovic and Jason Hickel. See the full chronology of the discussion below
Original blog post by Branko Milanovic “The illusion of “degrowth” in a poor and unequal world”
First reply by Jason Hickel “Why Branko Milanovic is wrong about de-growth”
Reply by Branko Milanovic “The illusion of degrowth: Part II”
Second Reply by Jason Hickel “De-growth is feasible: people want a new economy”

Energy poverty in a degrowth context: an unavoidable struggle?

Austerity-driven, unsustainable degrowth has resulted in a surge of energy poverty in EU and beyond. Understood as the inability of households to secure a materially- and socially-necessitated level of energy services in the home, energy poverty has become a widespread societal concern that demands structural responses.

Tensions are foreseen between energy poverty alleviation and degrowth. On the one hand there is a strong case for energy prices to reflect the impact of its provision (internalisation of externalities). Cheap energy also leads to wasting energy, as the experience from former Eastern block shows. On the other hand, rising cost of energy constitutes a problem for vulnerable populations, limiting the chances for social inclusion and decent life. This struggle leads to several important questions. How should we address energy poverty in the context of degrowth? How to match the environmental and social needs? How to define energy poverty to trigger structural response?

The purpose of this special session is to examine the driving factors of energy poverty and the existing policy responses in the context of degrowth thinking. It intends to draw attention to the multiple links between domestic energy deprivation and degrowth, which is largely missing.

The four contributions will address the outlined questions. They will set up the context of energy poverty and challenges of defining it, outline the specifics of energy poverty in Central and South-East Europe and show that practical measures are important, but face limitations if the structural conditions remain unchanged. Finally, they will discuss how to reconcile the environmental and social needs.

This media entry was a contribution to the special session „Energy poverty in a degrowth context: an unavoidable struggle? “ at the 5th International Degrowth Conference in Budapest in 2016.

PROVE: degrowing the use of natural resources for food production

From the text: According to IBGE (2010), from 2000 to 2010, over 400,000 small farms went bankrupt, pushing about 2 million people away from rural zones toward big cities, and causing serious social problems. One of the reasons for this exodus is the agribusiness production model, based on “technological packets” and on the production of commodities for export. It uses genetic modified organisms, causes deforestation of great areas and the contamination of soil and water with chemical fertilizers and defensives, and also contributes for greenhouse gases emissions. This production model works in a technological matrix that excludes small farmers.
For every US$100 that a consumer pays for a processed agricultural product, $20 go to vendor, $30 to the person trading the goods, and $45 to the processor. The small producer earns only $5. Carvalho (2002)
It is possible to invert this situation, by giving opportunities to the rural poorest to produce agroecological products and aggregate value to their production, obtaining enough income to live with dignity in rural areas. It is possible to verticalize the exceeding production with small family agroindustries of approximately 37m2. This proposal was already implemented in many places in Brazil, by the “Verticalization of Family Production Program – PROVE. This program is designed to promote small agricultural production, processing and trade. It involves many urban, periurban and rural agricultural systems, including vegetable-gardening, fruit-growing and livestock systems. Intervention happens at the individual and/or collective level, especially aimed at the lower income groups. The PROVE started in 1995. From 1995 to 2010, about 500 agroindustry facilities were built in Brazil. In this period, the monthly per capita family income of those involved in the program rose from US$25 to US$100 Carvalho (1998). On average, each project generates jobs for six people, usually members of the same family. The funds disbursed by the public and private sector (US$ 200) for each job generated by PROVE are strictly related to expenses for the existing capacity, i.e. wages, cars, fuel, etc., since all the remaining costs are borne by the producers themselves.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012.

Migrations in the Paradigm of Growth

Abstract: Migration flows are, in a measure, the consequence of dominant economic models, namely the growth paradigm that currently permeates the world. Migrations are the result of different human needs, first of all the need to survive. Naturally, the decision to move towards an unknown destination is also influenced by cultural models: nowadays, the collective imagination of the North is built on the image of an enormous richness in consumption goods. This conviction also applies, on a smaller scale, to the Asian and African megalopolises, that attract masses of poor people pushed by a mirage of well-being. The result is the increase of migration flows both at national and international levels. At the national level, an increasing number of farmers is pushed to leave the countryside, often poor but based on local subsistence economies and rich in social connections, to move to miserable suburbs, surrounded by draws and waste (often imported by the rest of the world).
Migrations towards rich countries are often hindered by national governments but secretly supported by businessmen, pleased by the arrival of unskilled workforce which permits to reduce the labour costs and negatively affects the collective force of national workers. Nevertheless, legislations make it difficult to cross borders. Fences or warships are put in place to stop the flows, thus making the “journey of hope” more expensive and less human: lots of migrants lose their life in the attempt to reach the Western paradise or are subjected to inhuman treatments. If they succeed in reaching the destination, migrants are usually employed in dangerous sectors, underpaid or unpaid or become another puppet in the market of sexual exploitation. By a lucky chance, they might also be employed as domestic help, even though this often means becoming part of the black market. Not even the attempt to escape from inhuman dictatorships guarantees a secure status in accordance with the right of asylum, as demonstrated by the barriers encountered by the refugees landed in the past years in Italy from Libya.
Italy represents an excellent example when referring to migrants and the growth pattern. The legislation is mainly shaped on the model of the liberal economy based on growth: the access to the Italian territory is allowed only in function of economic needs and the permit of stay is strictly connected to the working status of the applicant. Thus, if the migrant is dismissed, he/she will lose the permit of stay, consequently losing all the relationships and the achievements built during the stay. The permit of stay is characterized by a sense of insecurity and precariousness, which makes the migrant weak and unprotected from blackmail arising from the employer, the landlord, even the partner. Migrants easily pass from being a source of profit to becoming waste. Moreover, the legislation hampers the family reunification, the issue of the citizenship as well as the access to the school and the health system. De facto, migrants in Western countries result to be guests, welcome with suspect but strongly exploited to produce useless goods that invade the market at limited prices or to become a good themselves, as in the case of prostitutes. If the migrant succeeds in escaping from this vicious circle, he/she easily becomes part of the criminal system.
Migrants indirectly allow the survival of the economic system, even because they often turn into willing consumers, not extremely wealthy but little conscious and critical in consumption. Moreover, they also import this life-style into their native land. They tearfully become ambassadors of an unreal, shining world, thus unconsciously contributing to the demolishment of the last local economies.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012.

Full Employment & Degrowth: The Social and Ecological Sustainability of The Job Guarantee

Introduction: The Degrowth Declaration of the 2008 Paris conference called for the “development of policies and tools for the practical implementation of degrowth”. The Job Guarantee (JG) is one such policy. This paper demonstrates how a JG program may be used to achieve both full employment and degrowth. Traditional Keynesian and Post Keynesian policies provide useful tools for addressing some of the inherent social and economic flaws of capitalism such as involuntary unemployment, poverty and inequality. However, these policies fail to account for environmental limits. As such the solutions they offer all rely on increasing aggregate demand, stimulating higher levels of economic growth and throughput. By contrast, a JG program embodies special features that dissolve the apparent contradiction between employment and the environment: between economic and ecological prosperity. Section two of this paper examines Keynes’s diagnosis of and solution to the problem of unemployment in terms of effective demand. It is shown that the principle of effective demand has important and paradoxical implications for economic growth and the environment. Section three builds on Keynes’s insight regarding the central role of money in a capitalist economy. It is argued that monetary production (M – C –M’) is not only the root cause of unemployment, but also the driving force behind ecological crisis. Section four surveys the theoretical foundations of the JG via a discussion of modern monetary theory (MMT). MMT explains why a sovereign currency government can always “finance” a JG. The fifth section compares the JG and alternative paths to full employment grounded in MMT in terms of their environmental implications. The final section of the paper considers the possibility using a JG to achieve degrowth.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012.

Permaculture proposals and tools for degrowth process in the fields of rural work and agriculture in Brazil

From the text: The defense rhetoric for unlimited economic growth uses as argument the need to create new jobs in order to increase life quality. We are in Brazil, the sixth world economy in 2011. The International Fund for Agricultural Development (IFAD) celebrates the reduction of poverty in the country and thanks its “impressive economic growth” for that. A sixth of world ’ s population is undernourished, although the Food and Agriculture Organization (FAO) affirms that actual food production could easily feed all. We verify the same scenario in Brazil – one of the largest producers and exporters of food (grains, fruits and meat), one of greatest biodiversity and freshwater reserve of the planet has 6% of its population undernourished and 8,5% in extreme poverty. In terms of employment in rural areas, agribusiness employs in the country only 15% of the Economically Active Population (PEA), against the remaining 85% that works in family farming.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012. – no full paper available

Eco-innovation as a Development Tool: Evidence from Latin America and Asia

Abstract: In the near future the access to basic needs in a world of 7 billion people will be strongly influenced by the 80% of humanity living in the so-called ‘developing world’. Their consumption patterns and their approach to sustainability will undoubtedly reshape the scenario of global economy. The understanding of the evolution of eco-innovation in the South of the world is crucial to achieve a global sustainability. In the growing literature about eco-innovation scant empirical work is dedicated to explore the potential of the lowest levels of social pyramid. This paper attempts to provide useful insights on innovation and development debate with a particular attention to eco-innovation creation, transfer and diffusion at the “Bottom of the Pyramid (BoP)”. The aim is to begin to dismantle the idea that “poor are too poor to eco-innovate”. The fascinating point in such a debate is whether or not emerging countries will be able to trigger a change of paradigm on a global basis pioneering alternative development models. In order to understand the implications of De-Growth thinking on a global scale it is crucial to understand how emerging economies are dealing with sustainability and especially with eco-innovation. The study illustrates, through the analysis of cases in Asia and South America that eco-innovation occurs at different levels at BoP by exploiting local potential, traditional knowledge and international connections. Moreover the cases suggest that new business models based on frugal innovation and new policy to foster the grassroots level might be relevant in time of crisis also for developed countries.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012.

(De)Growth, Welfare States and Path Dependency

Abstract: Since the beginning of the Industrial Revolution, especially in U.K., several programs had passed to help and assist the poor workers through a redistributive mechanism managed by the State. We call these programs Welfare State and they still represent one of the main achievements of modern society. In the hypothesis of a degrowth society on one hand it would be difficult finding resources to sustain them but, on the other hand, the positive social and communitarian externalities resulted from less hours spent at work or in exploiting material resources due to consumistic behaviours could be used to create a different kind of Welfare programs. In this work we are going to discuss the economic and political implications behind the transition from capitalist to degrowth society, highlighting the problems of this radical institutional change occurring after decades of material growing economies, of technological progress, of demographic expansion and population aging.

Contribution to the 3rd International Degrowth Conference for Ecological Sustainability and Social Equity in Venice in 2012.

Ökologische Erfordernisse, Armut und Grundeinkommen in der Nord-Süd-Perspektive

Diskussionsworkshop auf der 4. internationalen Degrowth Konferenz 2014 in Leipzig.

Referent_innen: Knapp, Simone (Kirchliche Arbeitsstelle Südliches Afrika KASA), Blaschke, Ronald (Netzwerk Grundeinkommen)

Aus dem Programmheft: Ein bedingungsloses Grundeinkommen ist nicht nur finanziell möglich, es ist auch politisch notwendig, da es dazu beitragen kann, das Zugehörigkeitsgefühl zu stärken, Humankapital zu fördern, Frieden zu stiften und eine Vergesellschaftung von Rohstoffen in die Wege zu leiten. Der Workshop beleuchtet die unterschiedlichen Stränge der Diskussion im Südlichen Afrika zum namibischen Pilotprojekt zur Armutsbekämpfung und der Finanzierung über Rohstoffeinnahmen und verknüpft diese mit der hiesigen Debatte verknüpfen.

Woran sich Wohlstand wirklich messen lässt

Vortrag von Gustav Horn und Hans Diefenbach im Rahmen der Veranstaltungsreihe “Wohlstand ohne Wachstum?” des DGB 2011 an der TU Berlin.

Beschreibung
Gustav Horn wendet sich in seinem Vortrag Schlüsselbegriffen der Debatte um die Realisierbarkeit einer Postwachstumsgesllschaft zu. Wie definieren wir Wachstum und welches Handwerkszeug steht uns zur Verfügung um Wachstum zu messen? Was unterscheidet Wachstum vom Begriff des Wohlstands und gibt es einen Zusammenhang zwischen beiden?

Gustav Horn setzt sich kritisch mit dem Bruttoinlandsprodukt (BIP) als dem bislang vorherschenden Wachstumsmaß auseinander und diskutiert Alternativen. So stellt er ein vom Sachverständigenrat entwickeltes Indikatorensystem vor, das bestrebt ist, neben der Wirtschaftsleistung und dem materieller Wohlstand eines Landes auch Lebensqualität und Nachhaltigkeit zu erfassen.

Abschließend wendet sich Horn der Frage zu, ob es Wohlstand ohne Wachstum überhaupt geben könne. Er nimmt an, dass Wohlstand anders als Wachstum durchaus eine immaterielle Seite hat. Trotzdem bleibt er skeptisch, was die Entkopplung des Wohlstands von materiellem Wachstum angeht. Insbesondere Beschäftigung und Armut stünden in engem Zusammenhang zu materiellem Wachstum.

Hans Diefenbach diskutiert bestehende Ansätze und stellt einen von ihm mitentwickelten Wohlfahrtsindex als Ergänzung zum etablierten Wachstumsmaß BIP vor. Zentral für diesen Index ist es, dass er vom BIP bislang nicht erfasste Faktoren wie Hausarbeit, Ehrenamt, Wohlfahrtsverteilung, Umweltbelastung etc. monetär bewertet, gewichtet und auf diese Weise eine neue und andere Sicht auf „Wohlfahrt” ermöglicht.