Economic Growth: Addiction and Its Alternatives

16 minute read (3569 words)

For half a millennium, the capitalist experiment has waged war with the earth and its most ardent defenders, catalyzing a climate crisis while marginalizing large swaths of the global populace. As the atrocities of its past and present become increasingly apparent, and its ecological and energetic undergirding exceedingly untenable, recognition that capitalism’s story is nearing its final chapter has steadily navigated its way into popular discourse.

The going of capitalism and the coming of something new is an inevitable transition, but the defining qualities of the transition, much less so. Most critically, the nature of capitalism’s exodus remains to be seen. Will it be by force? Will the proverbial “cogs of the machine” grind until the social divisions they spawn splinter them apart through class, race, or resource warfare? Or will it be by design? Will regenerative, sustainable ways of being strategically, intentionally, and emergently supplant their extractive and oppressive predecessors? Will the transition be abrupt, chaotic, and destructive, or planned, managed, and just?

How far will we go? At what cost will we quit? From what height will we fall? 

Of course, these questions are far more than hypotheticals. They are near-future visions with the most significant of consequences. Given the alternatives, the moral imperative of orchestrating a just transition to a post-capitalist future cannot be understated. In order to better inform our approach to such a tall order, we must first understand the mechanisms that hold the present, dominant economy on such a destructive trajectory. 

The Growth Trap

As expressed in the Money, Debt, & the Growth Imperative article, modern capitalism’s most ecocidal attribute is its beholdence to a growth imperative. This growth imperative has a monolithic presence, yet its origins are quite nuanced. A combination of the following variables gave rise to (and hold) this multifaceted attribute deeply embedded in the fabric of western society:

  • The competitive nature of market economies
  • Expansion of the role of debt in market economies
  • Co-evolution of capitalism with modern institutions
  • Pervasive cognitive biases and associated cultural narratives

While the role of debt and our cognitive biases have been unpacked at length in other articles (here and here, respectively), a few of these forces demand a bit more expounding.

Grow or Die

In a competitive market, the inability for an enterprise to demonstrate growth (or, more accurately, growth potential) will generally preclude it from any semblance of longevity. Without a demonstrated ability to grow, an operation will eventually succumb to insolvency. Although most industries in the present, dominant economy are far from perfectly competitive, they are encouraged to be “free” enough to provide both consumers and investors with leverage in the form of choice. Meaning, if an organization fails to out-shine its rivals, essential revenue and investment capital will go elsewhere, leaving only the most efficient, productive, profit-maximizing entities in the mix.

Corporate growth “heroes” celebrate a competitor-crushing quarter

Peas in a Pod

Capitalism necessitated or co-evolved with nearly all of western society’s modern institutions and structures. From education to healthcare, nearly all dimensions of our modern ways of life have been in some manner shaped by the whims of our guiding ideology. From the privatization of historically nationalized industries, to the productivity-orientation of schooling, housing, criminal justice, and agriculture (to name a few), the 20th and 21st centuries have seen the axioms of neoliberalism creep into every corner of society and every corner of the globe. By co-opting the public and social sectors along with the political economy more broadly, capitalism’s influence on institutional development and direction has gone unmatched and unchecked. As a result, the same growth imperative that governed markets for centuries now holds sway over an entire society. Once GDP became our guiding light, we let it blind us. 

Freed Greed

Perhaps most insidiously, conditioning a populace to value economic growth, and its corollary, profits, as the primary objectives of its existence instills a cultural value set antithetical to that necessary for the creation of a more sustainable world. By pursuing profits over all else, people lose their inborn inclination to value life, and with it their sense of empathy and connectedness. In turn, this makes environmental issues all the more intractable, as the impetus to care has been eroded by and replaced with an incentive to contribute to, or at least remain complicit in, a growth-oriented economy. 

Public financial markets liberate more avaricious tendencies, as they enable individuals to invest in a wide variety of assets to meet their “desired” rate of return. In doing so, the individual is habituated to an expectation of capital growth. When growth is the expectation, nay, entitlement, threats to its existence are fought on all fronts. In many ways, public markets created the greatest army of growth-defenders, as they gave the average personal-wealth-oriented individual a vested interest in seeing glowing returns. What better way to codify the growth imperative than to democratize its perpetuation?

Lingua Franca

Beyond the socio-financial nexus, growth-fixation permeates every aspect of our modern, western, worldview, with language being a prime example. From the private sector adage of “we can’t shrink our way to greatness,” to the myriad of more colloquial “growth-mindset” expressions, English vernacular is rife with almost categorically pleasant or otherwise desirable depictions of growth. In essence, we halo expanding economic activity through the words and phrases we use to define it.

Growth is often (mis)represented by imagery of flowers and gardens

As economics correspondent Richard Partington writes in his piece “Is it time to end our fixation with GDP and growth?”, “Growth as a metaphor for prosperity has become deeply embedded through language. We like to see our children grow or our gardens. Growth as a fundamentally human movement is life and progress. But there is another end of the metaphor: that growth can be cancerous.” 

A less frequently called upon representation of growth in modern language and schema – that of the malignant, detrimental variety

By challenging the ways in which we think and speak about prosperity and well being, we can more easily recognize unfettered economic growth as an affliction, and our pursuit of it an addiction. There is much power in this exercise – acknowledging that we are institutionally, financially, geo-politically, and culturally addicted to growth allows us to take the first step towards sobriety – admitting we have a problem.  

A Wolf in Sheep’s Clothing

Any discussion about economic growth would be incomplete if it did not confront the elephant in the room – that of “green”, “inclusive”, or “sustainable” growth. Pushed by a variety of high-profile (and, in some cases, well-meaning) politicians, economists, and pundits, this is the “progressive” perspective du jour. But make no mistake – the idea of absolving all of the ecological and social atrocities associated with the pursuit of eternal economic growth by rebranding it with nice-sounding adjectives is a deeply misguided undertaking. Promoting the “green” expansion of the global economy as a means to resolve the problems that it created is greenwashing at the most gargantuan of scales with the most egregious of implications. Confronting widespread social injustice and the climate crisis means confronting capitalism head-on. Not putting a green tie on it and sending it back to the bank.

A panel of international economists and policy makers discuss pet oxymorons, “green growth” and “sustainable development” at the OECD headquarters in Paris

Promoting the “green” expansion of the global economy as a means to resolve the problems that it created is greenwashing at the most gargantuan of scales with the most egregious of implications. Confronting widespread social injustice and the climate crisis means confronting capitalism head-on. Not putting a green tie on it and sending it back to the bank.

The argument for “green” growth hinges on the idea of The Great Decoupling – that, through a combination of decarbonization, dematerialization, and productive efficiency gains, economic growth can continue apace while energy demand and, by extension, greenhouse gas emissions flatline and fall. Although several nations have shown promising signs of such a decoupling, the general trend has been a strong, positive correlation between GDP and greenhouse gas emissions.

The reason for this is that, in an economic model where the time, labor, and capital savings from such advancements have generally been directed towards the development, sale, and consumption of additional greenhouse gas-tethered products and services, the realization rate of the potential absolute reductions in greenhouse gas emissions falls short of the threshold necessary for rapid and absolute decoupling. Were the savings from these advancements redirected toward meaningful, low-carbon, social and environmental programs and pursuits, the promise of absolute decoupling would have more substance. However, even if such an approach to the allocation of resource savings were the norm, the realities of planetary boundaries are not so malleable. In other words, advancements in technology and a shifting economic landscape (increasingly digital, financialized, and service-based), have the theoretical ability to decouple the curves of greenhouse gas emissions and economic output, but only to the extent the laws of thermodynamics and finite input stocks permit (see “Peak Everything” article). Eventually, natural limits will always bridle the growth of a system inextricably linked to the natural world.

In some ways, efforts to decarbonize and dematerialize are positive things; they have the potential to reduce greenhouse gas emissions and waste streams while providing a window into ways of doing more with less – both of which can meaningfully inform the realm of possibilities in a lower-throughput society. It is only when these efforts are used as talking points to justify pro-growth paradigms do they present themselves as particularly dangerous; masking the inherent conflict between growing the economy and conserving the living world only heightens the point of descent. As economist Kate Raworth diplomatically writes, “while we need to embrace every opportunity to decouple that we can, the desire for green growth to be the new paradigm runs ahead of the evidence”.

Alternative Growth Paradigms

Beyond the dominant, pro-growth paradigm and the related green growth worldviews, several emerging theories exist that provide an antidote to, or at least a departure from, such exploitation. Below we will provide a brief overview of these promising framings.

Steady State Economics

In response to the glaring flaws that characterize the present, dominant economic system, many scholars have proposed the idea of pursuing a steady state economy – one that does not exist for the sake of growth, but for the sake of performing the duties any truly healthy economy should. The Center for the Advancement of the Steady State Economy (CASSE) operates as a thought leader on steady-state economies and provides a wealth of knowledge on the topic’s history, technical nuances, and promises – all of which can be explored further on their website. As an introduction to the concept, CASSE provides the following summary – 

A steady state economy is an economy of stable or mildly fluctuating size. The term typically refers to a national economy, but it can also be applied to a local, regional, or global economy. An economy can reach a steady state after a period of growth or after a period of downsizing or degrowth. To be sustainable, a steady state economy may not exceed ecological limits.”

Steady state economics is closely related to the broader field of ecological economics, and is generally espoused as the field’s response to the economic growth fixation of neoclassical economic thought. On the policy front, many advocates of steady state economics see inroads in the same monetary (ex. interest rates) and fiscal (ex. taxation) mechanisms used to satisfy pro-growth agendas. One core feature of steady state economics is its long-term orientation – much of the discourse revolves around posterity and inter-generational equity. In the words of ecological economist and steady state thought leader, Herman Daly, “boundary-oriented stability tends to minimize future regrets rather than maximize present satisfaction.”

It is important to note that steady state economics still values GDP as a metric insofar as it serves as a “solid indicator of economic activity” and provides a view into how well a region is tracking against aspirations of stability. Additionally, steady state economics generally presents degrowth as a provincial means for an economy in overshoot to navigate to a level at which it can stabilize, rather than as a desirable long-term end of itself. 

A core diagram of ecological economists and steady state theorists, the embedded model accurately depicts “The Economic System” as a subset of the Earth’s Biosphere

Degrowth

Often referred to as both a theory and a movement, degrowth is a primarily European notion most closely associated with the Swiss think tank, Club of Rome, and Romanian mathematician, Nicholas Georgescu-Roegen. As an introduction to the concept, the German-based organization, Degrowth, provides the following summary – 

Degrowth is an idea that critiques the global capitalist system which pursues growth at all costs, causing human exploitation and environmental destruction. The degrowth movement of activists and researchers advocates for societies that prioritize social and ecological well-being instead of corporate profits, over-production and excess consumption. This requires radical redistribution, reduction in the material size of the global economy, and a shift in common values towards care, solidarity and autonomy. Degrowth means transforming societies to ensure environmental justice and a good life for all within planetary boundaries.”

Degrowth shares many commonalities with steady state models, and, as outlined above, is often presented as a stepping stone to a steady state structure. At the same time, degrowth departs from steady state economics in that most “degrowthers” reject the use of GDP as a relevant metric in favor of a more holistic, representative assessment of well being. Additionally, some degrowth advocates disavow the idea that a steady state economy can achieve the level of equitable wealth distribution necessary for a just society. Furthermore, in the eyes of some economists, a number of less substantial, technical and semantic differences exist between the steady state and degrowth paradigms.

Lastly, and perhaps most centrally, a key element of the degrowth model is its designed nature. Not to be conflated with an economic recession, degrowth is a markedly planned or otherwise voluntary economic contraction. 

Professor of climate strategy Jorgen Randers speaks to an Oslo crowd on the promise of degrowth

Growth Agnosticism

Although not formalized in theory nor movement to the extent of steady state or degrowth, the concept of being “growth agnostic” is also relevant to the discussion around emerging growth paradigms. The principles of growth agnosticism are perhaps best explored in Raworth’s book, Doughnut Economics: 7 Ways to Think Like a 21st Century Economist. One of these 7 ways is the directive to “Be Agnostic About Growth”. In this dissection, Raworth poses questions around a world independent of a growth orientation – “what would it take to design an economy that can handle GDP growth without hankering after it, deal with it without depending upon it, embrace it without exacting it?” (229).  In Raworth’s words, the essence of growth agnosticism is that, “today we have economies that need to grow, whether or not they make us thrive. What we need are economies that make us thrive, whether or not they grow.” Ideas of growth agnosticism are oftentimes rooted in a recognition of the varied material conditions across the globe – that the value of economic growth depends on the context. In the growth-agnostic framing, economic growth is not categorically detrimental; rather, at the appropriate scale and with the appropriate characteristics, limited economic growth may serve as a net benefit to individuals lacking access to essential services. 

Indian economist and Nobel Laureate, Amartya Sen, acknowledges the inequitable distribution of economic forces, models, and accompanying metrics by expressing his belief that “progress is more plausibly judged by the reduction of deprivation than the further enrichment of the opulent.”

Theory to Action

These paradigms can be useful reference points in the ongoing discussion of alternative ways of living and interacting, but they should not be considered mutually exclusive nor comprehensive. In some ways, framing such conversations at the generally theoretical level of “to grow or not to grow”, may lock the discourse a layer of specificity away from meaningful, action-oriented dialogue. The most fruitful conversations, rather, may begin with the question – how do we reimagine our ways of being and interacting? From our perspective, this question opens the door to a number of micro-transitions that should (and, to a varied extent, already are) happen(ing) in conjunction. The following are meant to serve as examples of such shifts.

Shifts of the Conscience

  • Shift mindsets away from consumer culture and towards material sufficiency
  • Substitute justice for growth in the language we use to discuss societal aspirations
  • Expand and integrate alternative wellbeing metrics into internal and small group discourse

Shifts of the Institution

Shifts of the Economic Model

Navigating to a Post-Capitalist Future

All of these (and more) priorities must be pursued, and are certainly part of the solution. Yet major questions remain. Although the above notions are far from fringe concepts, the capitalist hegemony and accompanying plutocracy do not take challenges to their status lightly, and will use every tool in their arsenal to ensure post-capitalist narratives are smeared, misdirected, or co-opted. Front and center in this battle, both ideological and practiced, sits one of capitalism’s greatest battleships – the “red destroyer”. A vestige of the McCarthy era, the conditioned loathing and fear of anything that resembles communism persists today. To those who still hold that fear, “post-capitalist” or “anti-capitalist” is translated to mean a dangerous devolution towards a homogenous, conformist assemblage of impoverished laborers toiling away under the watchful eye of authoritarian command centers. Yet “post-capitalist” can mean a wide-ranging number of things, and most certainly need not resemble Maoist China nor present-day North Korea. Navigating this discourse (both rhetorically and materially), however, presents itself a challenge in certain communities.

An anti-capitalist protester is arrested in Seattle, WA in 2015. Photo credit, Adam Cohn

Additionally, calls to localize and cultivate community-oriented resilience can be perceived as an exclusive and elitist endeavor. Localization of supply chains can be suicidal if ones’ geography precludes them from accessing water and arable land, or is prone to severe droughts. For the millions of Indian and Chinese middle-class workers that emerged after the relative liberalization of their economies, a post-capitalist future may conjure up images of a more oppressive era. In some places, short- to mid-term poverty eradication has proved a daunting proposition in the absence of markets for goods and services. These are all essential considerations in the post-capitalist dialogue, and should be held at the forefront of the transition, rather than as cultural and geopolitical afterthoughts. Although we may not have all the answers to these queries, we can be certain that, with respect to solving the problems it created, capitalism is not one of them. 

Lastly, and perhaps most critically, the micro-transitions outlined above place an immense faith in human nature. A modern experiment in peaceful, reciprocal ways of living has not been attempted at a global scale; particularly not with recovering growth-addicts as subjects. Did capitalism scar our hearts and minds so deeply that we can no longer manifest such a vision? Or are we still capable of learning from the alternative, just economies that have governed human societies on this planet far longer than the present, dominant one? Answers to these questions may very well depend on how much time we allow ourselves to practice, and who we turn to for guidance. Regaining our ability to live in harmony with each other and the land will take effort, patience, and respect. To successfully navigate (and ideally, shape) a transition to a post-capitalist future, we must look to those well-practiced in this art with humility and gratitude, recognizing that our real imperative is not to grow, but justly evolve.