Thanks so much to Chris for publishing one of my posts on his Substack. Thanks, also, to new subscribers. That post was first in a series I intended to write, and this one will cover some of the things that I wasn't able to cover in that post.
First, I want to talk about the elephant in the room when it comes to the growth discussion, which is people living in countries suffering from absolute deprivation. Such countries need growth to provide the basics for their citizenry, the argument goes, and if you question the need for growth you are condemning these people to poverty and destitution forever. This is basically Branko Milanovich's argument against degrowth.
For people who don't have the basics such as medicine or sanitation, they say, how can you advocate a world where there is no further growth? Why do you want them to suffer? Why do you want them to die? Degrowth advocates have been castigated as murderers and even called “evil.” I wish I were kidding, but I'm not.
Now, I anticipate all the comments talking about how I'm romanticizing people's suffering, or how it's easy for me to say these things as a "rich" Westerner, and how people in poor countries want nothing more than to aspire to a higher standard of living. I imagine critics will inundate me with statistics about poor, suffering people and argue that that economic growth is the only way to end poverty, and anything else is delusional.
Okay, look, I know all of these things.
But there are several points to made here.
1.
First, nobody—including me—wants people to live in a state of absolute deprivation where they lack the basic necessities of life that we take for granted in wealthy, industrialized societies. Let me state that as clearly and unequivocally as I can so there is no ambiguity on this point.
The implication that those of us who question the capitalist growth model want poor people to suffer or babies to die is a grotesque distortion tantamount to slander. It is a deliberate straw man to demonize one's opponents and prevent any sort of rational debate. It's easy to win an argument when you can make up your opponent's position and put words in their mouth.
The bitter irony is that many of the people who are most amenable to degrowth tend to be on the socialist end of the spectrum, meaning that their core political philosophy is based on the right of all people to enjoy the basics of life, as opposed to the capitalist model which is based around the maximization of private profit above all else. Yet those same people are accused of wanting the poor people of the world to suffer by the advocates of the capitalist growth model1!
What we are questioning is whether the current economic growth model is the best way to achieve that goal. So we all theoretically want the same ends. All we're arguing about is the means.
The fundamental question is whether the capitalist growth model is the best way to achieve those aims. Clearly, the mainstream says that it is. That is why sites such as Our World In Data exist and are lavishly funded by billionaires, international banks and think-tanks. Sites like these insist that the capitalist for-profit growth model works, and that poverty has vastly declined, implying that free trade and neoliberal capitalism are the cause.
But is this "oats and sparrows" approach really the best way to provide the basics for the world's poorest individuals? For those unaware of this phrase, it refers to the idea that if you feed enough oats to the horse, some will eventually pass through to feed the sparrows. In my view, this seems to be an accurate metaphor for the capitalist growth model. According to this logic, already rich countries need to continue to grow and get richer so that poor countries can have the basics—eventually. That idea always seemed strange to me.
But there are reasons to question whether the capitalist growth model is really about helping poor people in the Third World like its proponents claim. Every year, the British charity Oxfam makes headlines by publishing provocative statistics about wealth and poverty. Two statistics have come out in recent years that are noteworthy. One is that, between 2020 and 2022, the most affluent 1 percent of global citizens captured nearly twice as much of the new global wealth produced as did the other 99 percent of humanity combined2. Additionally, of all the global wealth produced between 1995 and 2021, the top 1 percent captured 38 percent, while the bottom 50 percent captured only 2 percent3.
This seems at odds with the notion that the imperative for growth is to help the world's poorest people.
The second is that, if current trends continue, the world will see it's first trillionaire in under a decade (that is, 1,000 billions), but poverty won't be eradicated for another 229 years4.
If we truly wanted to help the world's poorest people—as growth advocates insist is their aim—then this seems to be an awfully strange way to go about it. It's also worth noting that under the current paradigm the richest 1 percent of people in the world produces 100 times more carbon emissions than the average person in the poorest half of the world’s population, yet the poorest people in the world—those that growth advocates claim they are trying to help—will bear the brunt of the negative effects of climate change. Thus "helping" the poor primarily through capitalist growth seems counterproductive.
It's also worth noting that modern economic growth has been around for about 150 years or so, yet the benefits have still not managed to trickle down to all of humanity. Why is that? Why will future economic growth do what past growth has failed to accomplish? Even after 150+ years and vast amounts of irreplaceable fossil fuels burned, there are more people in poverty than ever, even as the percentage of people in poverty has declined significantly (as growth advocates constantly point out). Yet growth advocates say, "This time it's different."
So, in short, capitalist growth has so far failed to trickle down to the world's poorest people. But it surely will in the future, proponents claim, even as the world’s population continues to grow. I find myself skeptical. Of course, population is stabilizing or no longer growing in many countries, including some of the world's poorest. Yet advocates of the capitalist growth model portray this as a crisis, which seems odd if your goal is to give the world's poorest people access to better food, health care, sanitation, shelter, and so on. Advocates of degrowth, on the other hand, see this as a positive thing.
Never in any degrowth discussions, books or papers—and there are plenty of these available—have I seen anyone call for people living in absolute poverty not to better their living standards. The enemies of degrowth simply assert that this is the case without citing any evidence for it.
In fact, most degrowth advocates argue the opposite: that we need to limit waste and overconsumption in wealthy countries in order to ensure that countries currently stuck at a low standard of living will have the ability to provide the basics for their population on a planet that is finite without incurring environmental catastrophe. That is, we must “live simply so that others may simply live.”
That leads us to our next point.
2.
The distinction is sometimes made between countries which are already very wealthy and have a high standard of living and those which are not. This is intrinsic to the definition of degrowth proposed by Jason Hickel: "A planned and democratic reduction of unnecessary production in rich countries in a just way."
While there is no universally-agreed upon definition for degrowth, I think this is as good as any, and I suspect that you will find a lot of agreement with it. Note that, according to this definition, limiting it to rich countries is part of the very definition of the term! (Note also the unnecessary part).
So, if we accept that definition, we can recognize the potential need for economic growth in poor countries where there is currently not enough economic activity or resources to provide the basics of life for most people. If we wanted to be generous to the mainstream view, we could acknowledge that conventional growth as currently defined might still be necessary for countries where the majority of citizens live in absolute poverty.
I think that's a fair compromise, although I've already noted the problems with relying on the conventional growth model to accomplish that goal, but let's leave that aside for now. Let's also leave aside the relatively large number of people who still live in poverty in many rich countries.
So that leaves us to consider wealthy countries which already have a very high standard of living. What about them?
3.
If we decide to limit our advocacy to rich countries, then do the opponents of degrowth change their tune? No, they don't, not one bit. No matter the size of the economy, economists still see degrowth as the enemy and insist that conventional economic growth must be maximized at all costs.
Growth in modern economics is defined as an increase in GDP or gross domestic product. To oversimplify a bit, GDP is a measure of the aggregate amount of economic transactions in the country. This statistic emerged from the Great Depression and Second World War, when measuring economic output was essential to ending the Depression and winning the war effort. Growth is also measured by things like productivity, the amount of money in circulation, and the increasing value of stock markets. GDP has become an all-consuming metric for the success or failure of modern societies. Every time you read a news story about an economy growing, this is what they are talking about.
However, GDP is agnostic to what is growing. I can't recall where I heard it, but I remember a quip to the effect that the ideal capitalist economy is one where everyone is a cancer patient who gets into a car accident on the way to chemotherapy. Alcoholism adds to GDP. Gambling addiction adds to GDP. Cancer adds to GDP. Car crashes add to GDP. Natural disasters add to GDP. This underscores the fact that GDP is not a measure of a society's overall health or well-being, only of economic transactions. You and I could sell our houses back to each other every month and GDP would go up, but neither of us would be any better off.
This was summed up in a speech given by Robert F. Kennedy in the 1960's (which could never be given today in the era of neoliberalism):
...if we judge the United States of America by [Gross National Product—a precursor to GDP] - that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.
It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl.
It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities. It counts Whitman's rifle and Speck's knife, and the television programs which glorify violence in order to sell toys to our children.
Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials.
It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country. It measures everything in short, except that which makes life worthwhile.
https://www.theguardian.com/news/datablog/2012/may/24/robert-kennedy-gdp
It’s a perfect example of Godhart’s Law: "When a measure becomes a target, it ceases to be a good measure."
If you point this out to economists, they will say, "of course we know that," and admit that GDP is not a single, unitary measure of a society's success or failure, nor was it ever meant to be. They will also acknowledge the fact that it includes many things which are detrimental. Yet, despite this, they will oppose any attempts to limit GDP growth and see any decline as an emergency that must be prevented. It's a schizophrenic position that makes it hard to take economists seriously on this topic.
The inverse is the question of whether a rising GDP invariably means that a society is better off. There are reasons to doubt this, however, as this remarkable statistic from Mark Blyth and Eric Lonergan illustrates:
Between 1981 and 2017, Britain’s gross domestic product doubled, while the use of food banks rose by 1,000 per cent. At a rally in Sunderland, home to the Nissan auto plant, a pro-Remain politician said withdrawal from Europe would damage “our GDP”. To which someone yelled, “your GDP!”.5
While I don’t have statistics for the United States, anecdotally, that seems to be the case here as well. The population seems to be under increasing stress and strain, even as GDP is growing. Vast tent cities and homeless encampments have sprung up everywhere, despite a supposedly growing economy. Much of the Heartland has already experienced degrowth for decades, only the unplanned variety. This comports with Ran Prieur’s prediction (August 24, 2023): “At some point in the future, the Dow Jones will be ten times higher than it is now, and there will be ten times as many homeless people.”
Even more remarkable is the discovery that during recessions, people actually live longer, even adding years to their lives! The reason for this are unknown, but researchers postulate that lower levels of economic activity produce less air pollution which leads to health benefits. I would also point out the effects of lower levels of cortisol due to the reduction of work stressors such as commuting and deadlines, which we know significantly contribute to illness and premature death.
New research confirms it: The worse the economy gets, the longer we live. But why? (Business Insider)
The original paper (PDF): https://users.nber.org/~notom/research/FNSZ_Great_Recession_jan2024.pdf
So, based on all the evidence, we see that food insecurity, housing insecurity, desperation, illness, violence, depression, suicide, and so forth, can all go up even in the face of a rising GDP and stock market. At the same time, we see that people actually live longer when economic activity decreases, despite the social hardship that recessions inflict on the unemployed under the current capitalist growth paradigm. And my previous post was one long illustration of the fact that economic activity alone seems hardly correlated with human happiness and social flourishing at all, even in the poorest communities. After I wrote it, the latest World Happiness Report came out showing the United States slipping even further down the rankings, now out of the top 20.
All of this gives us reasons to question the current capitalist growth paradigm and wonder if we can do better, both for rich countries and poor ones. If, after a certain point, increasing levels of growth convey no benefits, then it follows that a decline may not make you worse off. In fact, it might even improve your life.
Yet what economists invariably do is conflate a slowdown in growth with lower living standards, hardship, poverty, and decline. Or they will equate it with recessions under the current capitalist growth paradigm (which, as we've seen, are not uniformly bad). Both of these arguments are false and disingenuous, but you will see them made over and over again. Economists cannot debate degrowth on its merits without distorting or redefining it, because it is just common sense, so they mostly ignore it.
4
One final point on the issue of maximizing capitalist profits in order to benefit world's poorest people. On his blog, Jason Kottke posted a gift link to this Washington Post article: John Green on how tuberculosis, the world’s deadliest disease, is completely curable and the roadblock to helping rid the world of it is money. “The tests are great. If only we could afford them.”
The article talks about the fact that tuberculosis is a serious problem in developing countries, but it can be cured if caught early. To catch it early, though, you need a test that can identify the disease early. One company has developed such a test, but the problem is that poor countries where tuberculosis is a problem cannot afford it. In fact, the design of the test itself is expressly designed to maximize corporate profits:
When it comes to selling their tests for tuberculosis and other infectious diseases, such as AIDS, [Cepheid—a subsidiary of the conglomerate Danaher] has touted its profit strategy to shareholders: “We have a razor blade business model in mission-critical applications,” as CEO Rainer Blair put it in January. Razor companies make a slim profit on the handle itself and then charge exorbitantly for replacement blades. That’s also the printer/ink approach. And it’s Danaher’s: Make the GeneXpert machines relatively affordable, hike the price of test cartridges.
Last year, Danaher and its subsidiary Cepheid pledged to no longer profit in poor countries from the sale of their standard TB cartridge. That was a big step forward that will allow millions more people to access testing. But the companies still charge almost $8 for the standard cartridge, which they say is “at cost,” but Doctors Without Borders estimates is nearly a 40 percent markup. Cepheid charges almost $15 — or more than 300 percent more than the cost of production, Doctors Without Borders says — for every XDR-TB test cartridge.
Danaher deserves to be rewarded for developing these tests...But there is plenty of profit to be made in high-income countries from the company’s GeneXpert machines, testing for a variety of illnesses, including TB (which still sickens around 8,000 people per year in the United States), without sapping the very limited resources of the poorest people on Earth.
Note, too, that in developing this technology, Danaher and Cepheid received over $250 million in public funding, according to a 2021 study. Much of that support came from taxpayers like you and me. The public has the right to expect that its contributions are put to the maximum public good.
Under the current capitalist growth model, maximizing economic growth is seen as the best way to help the world's poor. In this case, maximizing profits would entail charging as much as possible for the tests, which would increase the stock price of the company to the maximum extent. That is how you would maximize growth under the current system. Yet we see that this is at odds with actually saving people's lives in developing countries. And the notion that important research won’t be carried out unless profits are maximized is contradicted by the fact that much of the research was underwritten by publicly funded institutions which are not for profit.
So, then, who are the real evil baby killers?
It's also worth noting that socialist leaders in the developing world who nationalized industries and funneled wealth into providing the basics for their citizenry were typically overthrown by capitalist states, especially the United States' CIA. Those that succeeded, such as Cuba, have been placed under crippling economic sanctions. Despite this, Cubans now enjoy better overall health outcomes than the average American under America’s monstrous, cruel, for-profit, privatized health care system.
Angrynomics, by Eric Lonergan and Mark Blyth. See: https://www.ft.com/content/94b0f800-a0c6-11ea-b65d-489c67b0d85d
I am a big fan of sharply curtailing luxury consumption (luxuries being things like air travel, car suburbs, 6000sqft houses, and vast mountains of plastic per person, along with the obvious like superyachts) but it is a red herring to point to the continued existence of poor countries as evidence that capitalism per se is a failure.
With zero exceptions, every society in history which has advanced from a state of high or even near-universal poverty (as all societies once were) to providing a reasonable average standard of living has done so via capitalist processes. That ranges from the laissez-faire of the 19th century USA to the oligarchic model of Japan and the state capitalism of China, but at some point they all engaged with the world trading system and let entrepreneurs try and make a buck - or a billion bucks.
That said, capitalism is not a religious commandment or complete philosophical system, it's just an economic tool and must be used properly. The guiding principle is that capital must be free to earn high returns where it can, but - crucially - the conditions must exist such that new capital is free to flow into the high-return sector(s) until such returns are competed down to the economy-wide average, on a cyclical adjusted basis. Sustained extraordinary returns on capital are almost prima facie evidence of a market failure.
Capitalism as an economic concept says absolutely nothing about how to organize a society in other respects - such as the decision to build car suburbs, let in endless millions of immigrants from foreign countries, and pump the food system full of plasticizers and Roundup, versus nurturing a culturally homogeneous society living in human-scaled places and prioritizing human health as a matter of policy.
How does one live in this nightmare of a world! Thank you for this enlightening piece.