Degrowth – is it useful or feasible?

January 19, 2010

     By Duncan Green     

Thought I’d check out what this ‘degrowth’ idea is about so went to a public meeting organized by a couple of new economics thinktanks (CEECEC and nef). It was a combination of seriously old school (standing room only; two and a half hours of speeches) and new (the bar was open throughout the event; death by powerpoint).

‘Degrowth’ is the clunky translation of ‘decroissance’, a movement founded by French

Serge Latouche

Serge Latouche

economist Serge Latouche, whose name was invoked in reverential tones all night. It’s big in France, Italy and Spain (its second major international conference takes place in Barcelona in March) but has yet to catch on in the UK. Based on last night’s presentations, I think it’s likely to stay that way. Speakers struggled to define what degrowth actually means, merely citing a plethora of economic ideas and schools of thought. As for lowly anglo-saxon concerns like ‘what does this mean for my pension/job/house/children?’, forget it.

Instead, the speakers largely replicated the practices of environmentalists and economists everywhere, presenting a series of ‘if I ruled the world’ fantasies which, however clever, did not connect with everyday issues of power or public opinion. Anyone who disagreed with degrowth was either a knave, a fool or both.

I had more serious concerns than the tone of the event, though. Stephen Spratt of new economics foundation blew a rather large hole in the idea when he argued ‘we don’t know how a shrinking economy would work’. It’s all very well to argue that there are objective limits to growth (as I have done elsewhere on this blog), but what would a world of shrinking GDP actually look like? Episodes of ‘deleveraging’ tend to be chaotic and bloody – collapsing companies, rising unemployment and political turmoil – not the carefully managed downsizing envisaged by degrowth.

There are hard economic reasons for that chaos. ‘De-growth is unstable’ as another speaker, the excellent Tim Jackson, author of ‘Prosperity without Growth’, explained. In the modern economy, labour productivity holds the key to success, driven by competition. That means producing more with fewer people. When you do that, either you grow, or unemployment rises. If one firm decides to pursue ‘degrowth’, its competitors will rapidly put it out of business. It makes the economy sound like a bicycle – if you don’t keep moving forward, you fall off.

‘We’re locked into an economic structure that forces us into growth’, Tim concluded, seeing this basic flaw as the reason for the ‘visceral fear’ he perceives in policy makers when he raises limits to growth with them. They know that shrinking economies jeopardise social and political stability.

What to do? Tim argues that yes, everything has to change before anything can change, but that is possible. Institutions and values are always evolving, and have to do so, if we are to escape from the growth trap. He tried to put meat on the bones of this proposition in Prosperity Without Growth, suggesting ‘12 steps to a sustainable economy’, based on changing our economics and investment patterns, investing in people and redistribution, tackling consumerism and respecting ecological boundaries.

But nothing he said seemed to deal with the bicycle problem. In an effort to end the marathon on an upbeat note, he put forward an essentially voluntarist position that ‘desire and capacity to work for change’ are the key. They are necessary undoubtedly, but so is power analysis, understanding where opponents are coming from and how they can be influenced. To worry about the realities of power is not to be defeatist, it is to be serious about change. But those skills seemed pretty well absent in the room, though at least Tim urged people not to portray opponents of degrowth as ‘cardboard cutouts’, but people with genuine reasons for scepticism.

polyp_cartoon_economic_growthAnd there was very little interest in developing countries. The occasional bit of misconceived romanticism, arguing that poor communities are all based on reciprocity and love and have no need of base material things (oh dear), and some nods towards redistribution, but nothing about the possibility of rationing growth to enable it to help poor countries, as I have discussed previously. And lots of comfort for the localizers and food miles people who are quite happy to deprive Africa of export markets. Growth was bad, end of story. Sure growth is a dirty and inefficient way to reduce poverty, but at a national or international scale, we know of no alternatives that have actually worked (rather than been dreamt up in academic common rooms).

Oxfam’s ABC to campaigning says that success requires a problem, a solution and a villain. Degrowth has 2 out of 3 – the problem and the villain – but the solution looks very unconvincing right now. As the word itself demonstrates, it is clear what it is against, but not what it is for and still less, how to get there.

So (at least on on the basis of one evening meeting – I haven’t read Latouche yet), it felt like there’s a long way to go before ‘degrowth’ or anything like it looks like a credible proposition. For starters, can any economists out there help with the bicycle problem – is it real or imagined and if real, how can it be got round?

Further Reading: ‘Farewell to Growth’, Serge Latouche; Prosperity without Growth, Tim Jackson; The Great Transition, nef

January 19, 2010
Duncan Green