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Hickel response on degrowth

from Dean Baker

[This is the last piece in an exchange with Jason Hickel on growth.My last piece is here.]

Baker says “I am at a loss to understand why we would have a war on growth.”  I don’t know why he is at a loss.  I explained the reasons for this in my previous post.  There are two I focus on.

(1) Because growing the GDP means growing energy demand, and this makes the task of switching to renewable energy significantly more difficult (nearly three times more difficult between now and 2050, which virtually rules out success).

(2) Because our preoccupation with growth makes it extremely difficult to get the regulations we need to avert ecological breakdown.  Politicians resist such measures precisely because of the risks they pose to growth

Baker has, unfortunately, not engaged with these arguments.

Next, Baker says that “if we spend enough in other areas, it is possible to offset sharp reductions in the sectors of the economy that are heavy users of fossil fuels.”  This argument is central to the standard vision of the Green New Deal (i.e., massive public investment in clean energy, which will generate millions of well-paid jobs and increase GDP growth).  Again, there are two problems with this.

(1) Even if we do manage to switch the entire energy system over to renewables, that might help us with emissions but it doesn’t help us with resource use.  If we keep growing GDP, resource use will keep going up – even if the economy is powered by clean energy.  And let’s not kid ourselves: to the extent that resource use is driving mass species extinction, this is an existential threat that we have to take seriously. 

(2) Why does the Green New Deal have to be focused on aggregate GDP growth?  Why not just stick with the bits about public investment and jobs and leave it at that?  The last New Deal was growth-oriented, sure.  But that doesn’t mean that this one has to be.  Again – and this is a crucial point – Baker has not made a positive argument for growth.  He just for some reason assumes that we must have it, but he never says why.  This is odd, because as he himself points out, the problem is not that we don’t have enough income; the problem is that it’s all locked up at the top.

So yes, let’s dramatically increase clean stuff and reduce dirty stuff (in terms of their share of total economic activity), and let’s do this with massive public investment.  Here we agree.  But there’s no reason to nonetheless keep increasing aggregate economic activity forever.  We just don’t need it, and it only makes the energy transition much more difficult.

Baker says: “I don’t see how telling people we don’t care about growth is going to advance an environmental agenda.  Growth is an abstraction that is probably meaningless to 99% of the population. People know if they have a secure job and health care, they know if their wages are rising, they don’t have a clue what the growth rate is.”

Now, maybe he’s right that people don’t pay attention to the growth rate.  But that doesn’t change the fact that we still need an economy that doesn’t require perpetual growth.  It doesmake it easier to get there, however (which is great!).  Baker is absolutely correct that what matters most to people is jobs and healthcare and wages.  So let’s build an economy that focuses on those things, rather focusing on growth.  Crucially, these social goods can be delivered without any additional growth at all.

In fact, the political obsession with GDP growth is an obstacle to the progressive agenda that Baker espouses.  Think of all the regressive things that politicians and corporations do in the name of growth: weakening labour standards, slashing environmental protections, liberalizing markets, deregulating banks, cutting social spending.  To the extent that the progressive Left operates within the growth frame, we play into the hands of neoliberals and make it much easier for them to justify these measures.

Baker’s final move is to take us into an as-yet hypothetical future.  Let’s imagine that we have completely clean energy and we cap resource use at a sustainable level – what Herman Daly has called a steady-state economy.  In such a scenario, he says, there’s no reason we can’t keep growing the GDP forever.

Look, maybe he’s right.  I don’t particularly care, as this has nothing to do with our actual, real-world problems, and nothing to do with how the existing economy works.  It is a completely imaginary world.  But let’s follow Baker’s line of thinking for a moment, because it turns out to be quite revealing.

Baker says that in such a scenario, people will produce better products – longer lasting, and higher quality.  The products will be “better” presumably because they embody more labour time, or more skill, or more advanced technology, and therefore they will be worth more money despite the fact that they embody less material.  “That sure sounds like growth to me,” he says.

Sure.  There is no reason that as certain products improve, this shouldn’t come along with an increase in their monetary value.  But that is very different from saying that the entire economy, as a total system, should continue aggregate expansion.  It is the latter point that is at stake when we talk about growth, not the former.

Let’s imagine that we do manage to scale down global material throughput to 50 billion tons per year (the sustainable rate), hold it steady at that level, and then keep growing GDP by 3% per year, forever.  Remember, this is exponential, so in 200 years global GDP is some 1,000 times bigger than it is today.

In such a scenario, capital will be under enormous pressure to find new horizons for surplus accumulation.  To use David Harvey’s terms, capital will need to find a “fix”, or an “outlet”.  If surplus can’t be extracted for free from nature (because of the resource cap), and can’t be extracted for free from humans (because I assume Baker wants fair wages in this ideal future world), then where will it come from?

Maybe it will come from improving products, as Baker hopes.  For this to work, then all products would have to be on average 3% “better” per year, or 1,000 times better by 2200, and all of this betterness would have to be reflected in a correspondingly higher cost.  This would be strange for a few reasons:

(1) If I think about the vast majority of things I need to live a good life, I can’t see how I would benefit much from them becoming 1,000 times better. Indeed, it is absurd.

(2) If products are “better” because they are longer-lasting, this may well be inimical to growth, not conducive to it, as it reduces turnover. (And that’s okay!)

(3) In order for “better” to translate into higher cost, the betterness has to be commodified (or enclosed).  That might be okay in some cases, but in other cases we may want the opposite.  I.e., if we develop better parks or better life-saving medicines, we may not want to charge people more to access them.

But let’s not pretend that capital’s need for constant expansion is going to only make better products.  When capital has bumped up against limits to profit-growth in the past, it has found fixes in things like structural adjustment programs, wars, restrictive patent laws, nefarious debt instruments, privatization, and by enclosing commons like water and seeds.  Harvey has described this as “accumulation by dispossession.”  Why would it be any different this time?

If growth must happen, and if all new value must be immaterial, then capital may well seek to enclose immaterial commons that are presently abundant and free (not just water and seeds but knowledge, songs, green spaces… maybe even parenting, physical touch… perhaps even the air) and then sell it back to us for money.

The point here is that closing off the usual go-to fix (extraction from nature) will generate pressure for other fixes.  That is the violent side of growth.  It’s just silly to pretend that these other fixes will somehow magically not be harmful.  And it begs the question: given these risks, why must we continue to insist on GDP growth, when we know we don’t actually need it?  Why not release our civilization, our planet, indeed our imaginations from this pressure?

  1. James Beckman
    December 14, 2018 at 2:24 pm

    I too am concerned about the future, but the reality of life for perhaps 80% of the world’s people is that TODAY matters–for food, shelter, safety & health. Further, Green is not a great investment opportunity, unlike the internet. It will take time to develop a significant cash flow, just like canals, railroads & electricity did. Tax incentives are crucial, but some governments aren’t interested in that approach to greening. Lots of approving words from some governments, but industrial powers like Germany are stuck on large amounts of black & brown coal. The reasons include public unwillingness to have power transmission lines from places where it is windy/warm to where industries need them regardless of sun or wind. So far batteries are non-economic. This is a long term push & global economies at this moment tend to have other concerns, many have noted.

  2. lobdillj
    December 14, 2018 at 2:50 pm

    I also disagree with Dean Baker. MMT has the answer. Check it out.

  3. December 14, 2018 at 5:23 pm

    I have followed this and read Dean Baker’s response and the comments to his article. I also have disagreed with Dean Baker on the question of growth, for years now. He does not budge from support for continuous growth as the means to boost GNP.

    Children have recently taken center stage in the degrowth vs extinction debate. They know their probability of outliving their parents is declining rapidly. Children around the world are looking in the faces of adults and clearly stating their parents and grandparents do not care what happens to them. Adults believe in growth like believing in personal victory playing the board game of Monopoly.

    Baker’s argument for higher quality replacements is fallacious; Assume replacement products are put on the market that perform an actually necessary function and do not wear out, or are designed with repairable components that are themselves designed to be recycled. Here we see logic automatically introduces a degrowth bias with policy implications for capitalism that are endless. One thing is clear; GNP would decline if people behaved logically.

    Dean Baker also mentions problems with raising gasoline taxes yet he does not discuss removing subsidies, especially for all forms of energy as a first small step to discover what a modern society really looks like. But these are side issues.

    Even if we reorganize to save ourselves from climate collapse, every living cell of every form of life on Earth is polluted with a cocktail of carcinogenic chemicals generated by compound capitalist economic growth. This is the actual existing legacy of capitalist GNP growth Dean Baker supports. All children, husbands and wives and grandparents are already polluted by unregulated economic growth. Adults who argue for economic growth do not care what happens to their children and grandchildren and their children know it.

    Let’s be clear. Representative democracies around the world are imposing austerity on people and reducing protection for Earth. The reason they are doing this is to stimulate capitalist economic growth on a planet made sick by unrestrained capitalist greed that does not care what happens to their children and grandchildren.

  4. December 15, 2018 at 5:22 am

    Culture affords not only structure for our lives by providing guidelines and rules for living, but also provides the explanations for why we should follow the guidelines and rules and how we benefit from doing so. Culture changes, sometimes slowly, sometimes quickly. Often these changes occur at different rates in different parts of a culture. For example, since World War II, technology has changed more quickly than the cultural rules about how to regulate and use that technology. As has been depicted in science fiction novels, movies, and television from the Twilight Zone to Star Trek. One of the more worrying aspects of culture is that we humans, who create it, hold on to certain parts long past the time when they serve valid useful purposes. Like the proper role of women and certain racial groups, or how to use war in international relations. Economic growth (unending increases in GDP) is one of the cultural artifacts we’ve held on to for too long. It no longer serves a valid useful purpose. It was beneficial for a time; it is no longer so.

    Many recognize the end of the need for growth. In its 2009 Report Prosperity Without Growth?: transition to a sustainable economy, the Sustainable Development Commission for the United Kingdom (UK) pointed out the following about economic growth.

    Every society clings to a myth by which it lives. Ours is the myth of economic growth. For the last five decades the pursuit of growth has been the single most important policy goal across the world. The global economy is almost five times the size it was half a century ago. If it continues to grow at the same rate the economy will be 80 times that size by the year 2100.

    The myth of growth has failed us. It has failed the two billion people who still live on less than $2 a day. It has failed the fragile ecological systems on which we depend for survival. It has failed, spectacularly, in its own terms, to provide economic stability and secure people’s livelihoods.

    Today we find ourselves faced with the imminent end of the era of cheap oil, the prospect (beyond the recent bubble) of steadily rising commodity prices, the degradation of forests, lakes and soils, conflicts over land use, water quality, fishing rights and the momentous challenge of stabilising concentrations of carbon in the global atmosphere. And we face these tasks with an economy that is fundamentally broken, in desperate need of renewal. (p. 5)

    But despite its central importance and cultural certainty in most of the world today, economic growth is not essential for capitalism to survive and prosper. John Stuart Mill, one of the founders of modern political economy noted this long ago.

    It must always have been seen, more or less distinctly, by political economists, that the increase in wealth is not boundless; that at the end of what they term the progressive state lies the stationary state, that all progress in wealth is but a postponement of this, and that each step in advance is an approach to it. (John Stuart Mill)

    Even Robert Solow, inventor of the best known and most widely accepted model of economic growth (the Solow-Swan neo-classical growth model) notes the following about growth.
    “There is no reason at all why capitalism could not survive with slow or even no growth. I think it’s perfectly possible that economic growth cannot go on at its current rate forever.”. . . . “It is possible that the United States and Europe will find that, as the decades go by, either continued growth will be too destructive to the environment and they are too dependent on scarce natural resources, or that they would rather use increasing productivity in the form of leisure. . . . There is nothing intrinsic in the system that says it cannot exist happily in a stationary state.” (Robert Solow)

  5. Calgacus
    December 15, 2018 at 9:11 am

    Jason HIckel:I explained the reasons for this in my previous post. There are two I focus on.

    (1) Because growing the GDP means growing energy demand, and this makes the task of switching to renewable energy significantly more difficult

    That’s not an argument or a reason. It is an assertion. It’s a major point in the dispute. Repeating it doesn’t make it true. The arguments I’ve seen presented are bad, mechanistic. You don’t grow GDP – you do stuff and growth may or may not result. You switch to renewables period & stop the infantile whining about how difficult this probably easy task is, before humanity even tries to do it. If there’s “growth”, whatever that is, good. If not, too bad. Switching to renewables MUST inevitably increase meaningful growth, where environmental destruction is properly accounted for.

    A degrowth approach to the environment and thinking about it is like getting a dog to wag its tail by grabbing the tail and swinging it around. It reverses causal chains in an unnatural manner, distracting attention from serious environmental problems to side effects like growth or not.

    (2) Because our preoccupation with growth makes it extremely difficult to get the regulations we need to avert ecological breakdown. Politicians resist such measures precisely because of the risks they pose to growth.

    Who is the “us” with “our preoccupation with growth”? Again,this is a disputed point. Good economists like Baker, the Green New Deal and FDR’s New Deal are not and were not preoccupied with growth. “The last New Deal was growth-oriented, sure.” shows that Hickel knows very little about the New Deal, which was quite Green; much Greener than today’s economic policies.

    The ones who are more preoccupied with growth are the degrowthers – who should be more aware of the need to avoid Malthusian connotations of degrowth that means “let the poor starve”. Sure, there are a some politicians and others, many corrupted by wealth who are pro-growth in the bad way Hickel describes. But harping on “degrowth” plays into their hands. Couldn’t have been designed better to strengthen them.

    Basically, the (Green) New Dealers have and had it right, and people should stop distorting that message with strained, farfetched and irrelevant criticism. The New Deals did and said what Hickel supports and didn’t do and don’t say what Hickel merely asserts without basis that they did and said and do and say – without quoting them.

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