By Michael Jacobs and Xhulia Likaj
Live within our means
What must be done to avert it? To an increasingly prominent group of environmentalists, the answer is obvious: Developed economies need to stop growing and start contracting. Only “ degrowth ,” say authors such as Jason Hickel and Giorgos Kallis, can enable the world to live within its environmental means and leave enough resources for the poorest countries to develop.
Moreover, the degrowthers argue, economic growth is not only environmentally unsustainable but also fails to make us better off . GDP growth in rich countries, they observe, is now correlated with multiple social problems, from rampant inequality to growing mental ill-health.
Unsurprisingly, the economic debate between advocates of green growth and degrowth is also a political argument between pro- and anticapitalist ideologies. Partly for this reason, a third position—“post-growth”—has emerged in recent years.
Proponents of post-growth economics criticize both green growthers and degrowthers for focusing on GDP. Since GDP does not measure environmental degradation or social well-being, neither growth nor degrowth of it should be a primary economic goal. In a recent report for the OECD , a panel of leading economists argue that economic policy should focus instead on society’s paramount objectives—which in the richer countries today should be environmental sustainability, improved well-being, declining inequality, and greater economic resilience.
Because none of these objectives can any longer be guaranteed by economic growth, policy makers need to go “beyond growth” to target them directly. As Kate Raworth , author of “ ,” puts it, we should be “growth-agnostic.”
A key reason for the rise of post-growth ideas is that advanced economies have in recent years had trouble growing at all. Previously normal 2%-3% annual increases in GDP have been largely out of reach, with even modest growth sustained only by ultralow interest rates and huge injections of central bank money.
Economists puzzle over why this is, but recent economic sluggishness certainly makes it easier to contemplate low rates of growth brought on by environmental policy, if that is indeed what would happen. One does not have to be an environmentalist to recognize the overwhelming priority of curbing the economy’s destructive impact on Earth’s climate and environment.
“ The Limits to Growth” was widely dismissed a half-century ago. Had that not happened, we wouldn’t need to be having the debate again today.
Michael Jacobs, professor of political economy at the University of Sheffield, and Xhulia Likaj, an economist at Forum New Economy in Berlin, are co-authors of “Growth, Degrowth or Post-Growth? “ (Forum for a New Economy, 2022).
This commentary was published with permission of Project Syndicate—Have We Reached the Limits to Growth?
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