Home > Uncategorized > Stability without growth: Keynes in an age of climate breakdown

Stability without growth: Keynes in an age of climate breakdown

from Dean Baker

[This post is by Jason Hickel. He is responding to a post I did on the possibility of having growth in a sustainable economy. I will post a rejoinder later in the week. Jason will then get the last word in this exchange.]

What do Keynesian Democrats think about the movement for post-growth and de-growth economics? Dean Baker, a senior economist at the Center for Economic Policy Research in Washington, DC, has given us some insight into this question. In a recent blog post, republished by Counterpunch, he takes aim at two articles that I wrote for Foreign Policy in which I argue that it is not feasible to reduce our emissions and resource use in line with planetary boundaries while at the same time pursuing exponential GDP growth.

Baker agrees — thankfully — that we need to dramatically reduce emissions and resource use to prevent ecological collapse. But he thinks that this is entirely compatible with continued GDP growth.

Let’s imagine, he says, that a new government imposes massive taxes on greenhouse gas emissions and resource extraction while at the same time increasing spending on clean technologies, with subsidies for electric vehicles and mass transit systems. Baker believes that this will shift patterns of consumption toward goods that are less emissions and resource intensive. People will spend their money on movies and plays, for example, or on gyms and nice restaurants and new computer software. So GDP will continue growing forever while emissions and resource use declines. 

It sounds wonderful, doesn’t it? I, for one, would embrace such an outcome. After all, if growth was green, why would anyone have a problem with it? Baker makes the mistake of believing that degrowthers are focused on reducing GDP. We are not. Like him, we want to reduce material throughput. But we accept that doing so will probably mean that GDP will not continue to grow, and we argue that this needn’t be a catastrophe — on the contrary, it can be managed in a way that improves people’s well-being.

  1. December 7, 2018 at 6:24 pm

    GDP is a poor measure and does not account for progress very well. It was never designed to be a measure of economic progress but is used as such by governments and business. We should be using the Genuine Progress Indicator if we need a measure.

  2. December 7, 2018 at 6:31 pm

    Measuring GDP needs to cease: in talks these days I say that it stands for Gross Depletion of the Planet. If another indicator of Wellbeing became standard, the end of growth material throughput could be seen to be balanced with an increase in community wealth and wellbeing, and the safe zone of Kate Raworth’s Doughnut Economy

  3. Trond Andresen
    December 7, 2018 at 7:26 pm

    The chattering middle classes should be humble and not force their agendas down the throats of the working class. The fight is for jobs, against cutbacks, for healthcare, for a living wage – made possible by massive extra public spending.

    It should not be a condition for participation in the struggle that one has to involve oneself with the pet obsessions of the intellectual middle classes. It has now started, with “anthropogenic global warming”. I am waiting for “racism” and possibly “gender theory”. Sigh.

    • December 7, 2018 at 10:03 pm

      Dear Trond,

      It has been known for quite a bit over a century now that increases in quality of life lead to a gentle decline in population. Some countries have already reached gentle declines and others that were expanding at the biological maximum, Mexico and Pakistan come to mind, population growth has declined to what the US was like in the nineteen sixties. The US is among the most rapid population growth on Earth today as part of capitalist policy to maintain low wages with maximum cash flow to profits.

      Amartya Sen explains with eloquence that only justice can avert human specie extinction. Modern three legs of justice includes nature, the next generation and all who are alive today.

      Come aboard and up to speed. Education even from grammar school leads to a gently declining population. An educated population will have a tendency to see they are living on Earth and everything they have is from a healthy willingly resource giving Earth. Cod and salmon come from the sea. Shoaling is when fish were so thick they slowed a sailing ship.

      Now if the gently declining population becomes aware of excess consumption as harming Earth, plus is aware of alternatives using a pricing system that express degree of harm to Earth as well as normal daily enterprise expenses, then the gently declining population will be gradually declining its purchases of harmful products. Notice this so far is justice with nature and Earth bounty is increasing geometrically as human commercial impact declines. The riddle is looking at small scale capitalism and agriculture can make money with most people being owners rather than desperate job seekers bargaining alone against immortal corporate giants that cannot exist without growing to infinity on a finite planet.

      Look at the socially sick world professionally, the cure is living productive and dignified lives worthy of being called Human. The question is justice during a time of numerical declines while quality increases.

      Read Richard Smith via real world economics, he lists how much it would cost to outright buyout all the polluting corporations, all of them, you should read it https://systemchangenotclimatechange.org/article/ecosocialist-path-limiting-global-temperature-rise-15°c

  4. December 7, 2018 at 9:06 pm

    According to Blair Fix’s paper “Dematerialization Through Services: Evaluating the Evidence”, a shift toward services is unlikely to reduce fossil energy use and carbon emissions per capita:

    “Dematerialization through services is a popular proposal for reducing the
    human impact on the environment. The idea is that by shifting from the production
    of goods to the provision of services, a society can reduce its material
    demands. But do societies with a larger service sector actually dematerialize?
    This paper tests the ‘dematerialization through services’ hypothesis with a focus
    on fossil fuel consumption and carbon emissions — the primary drivers of
    climate change. Using an international panel of data, I find no evidence that
    increasing the relative size of the service sector leads to carbon dematerialization
    (either in relative or absolute terms). Instead, the evidence suggests that
    the opposite is true: a larger service sector is associated with greater use of fossil
    fuels and greater carbon emissions per person.”

    Download paper: https://osf.io/93fpn/

  5. James Beckman
    December 8, 2018 at 8:27 am

    One of the results of the global logistics chain is more emissions, even as we try to introduce electricity for locomotion–often by charging batteries from fossil-fuel generated electricity. Here is one service in the interest of lower production costs & more customer convenience which seems to increase global warming, at least in the short-run.

  6. edward k ross
    December 10, 2018 at 12:46 am

    In response to Dean Baker December7,2018
    Stability without growth, I think this blog and the following posts raise some important aspects of the economic ideology that precludes examination of the role of GDP in economic conversations.

    I also support Jonathan Nitzan’s;
    “I find no evidence that increasing the relative size of the service leads to carbon dematerialization (either in absolute terms). Instead, the evidence suggests that the opposite is true”
    The above raises the question of climate change and how this affects all of the worlds population, My concern here is that academics, mainstream economists and the public have been bludgeoned through the media and education (indoctrination) into believing only certain aspects of global warming.

    Next I go back to Peter Radford December7,2018 and Helen Sakho,s post ‘a little knowledge is a dangerous thing’ which is particularly true in the case of global warming because as is often seen, focussing solely on carbon emissions and the dangers of fossil fuels , ignores important components of global warming such as tectonic plate movement that results in some land rising from the sea, while other lands sinks. Or the false excessive claims that rising sea levels are drowning some coral islands, when the reality is that coral island are built on living coral and if the coral dies then the island sinks. An other aspect of global warming largely ignores is the role of carbon sinks such as tropical rain forests and plants absorb carbon through the process of photosynthesis where the light and rays from the sun activate the green material in leaves to transform carbon into fertilizer for the tree or plant.

    Here i am not denying that global warming is happening what i am arguing is that too much of the conversation has cantered on a little knowledge that generally reflects the vested interests of politicians and elite robber barons. that ultimately does little or nothing to slow down global warming’

    Thus I support Helen Sakho’s comments on a little knowledge is a dangerous thing . Apart from that to some extent I sometimes think of my self as a jack of all things but master of none. However in the case of global warming I have formed my opinion from mature age university study and practical experience in agriculture, road construction, open cut coal mining and observation of tectonic plate movement in Papua New Guinea. Therefore I agree with dear Helen that a little KNOWLEDGE IS A DANGEROUS THING particularly when the subject requires a broad knowledge of the subject such as global warming.

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