Exploring growth, degrowth and wellbeing economy

By Sustainable TranslatorBook reviews

What is economic growth? Definitions vary, but this one from Our World in Data is a good place to start:

Economic growth is an increase in the quantity and quality of the economic goods and services that a society produces.

The most commonly used measure of economic growth is gross domestic product (GDP), which “measures the monetary value of final goods and services—that is, those that are bought by the final user—produced in a country in a given period of time”, according to the IMF’s definition. And there lies the problem: by using the GDP figures and country rankings to judge how well (or badly) countries are doing in terms of economy, we are only looking at things that have a monetary value. Cutting down a jungle, selling the logs and raising cattle on the cleared land to sell meat contribute towards a country’s GDP, whereas leaving the jungle untouched doesn’t. Looking after your baby or elderly father has no monetary value, whereas nuclear missiles do. Various alternative indices have been developed over the years to provide a more rounded picture, such as Gross National Happiness Index and the OECD Better Life Index, but as the world faces a climate emergency and biodiversity collapse, people are starting to rethink the whole premise of economic growth.

Degrowth has become a buzzword of recent years. As we face the prospect of climate catastrophe and breaching of planetary boundaries, many people see the centrality of economic growth in our societies as the root cause of these problems, as well as the main impediment to solving them. If the pursuit of economic growth is pushing us to the precipice, is rejecting growth the answer? Or can we successfully recalibrate the growth paradigm instead? There are many books on the subject, but I chose three to use as my guides.

 

Degrowth and ecosocialism – Capital in the Anthropocene

Japanese Marxist academic Kohei Saito’s Capital in Anthropocene (Hitoshinsei no Shihonron), a surprise bestseller in Japan, argues passionately and persuasively for degrowth. He dismisses the idea of a “green new deal”, which seeks to decouple GDP growth from greenhouse gas emissions to generate “green growth”, which he labels “climate Keynesianism”. He argues that the envisaged decoupling cannot achieve the level of deep decarbonisation that is needed to meet the Paris Agreement goals, and that the problem is the capitalist system of production itself, which he sees as fundamentally exploitative, both of people and natural resources.

He posits four possible futures for the Anthropocene world: climate Fascism (disaster capitalism exacerbating inequality); brutish state (Thomas Hobbes’s “war of all against all”); climate Maoism (top-down decarbonisation); and “degrowth communism” – his Marxist take on ecosocialism. Karl Marx is not generally considered a proponent of ecosocialism – Das Kapital certainly has no trace of it – but Saito points to Marx’s later, unpublished writings, particularly his letters to Vera Zasulich, and explains that Marx departed in later years from his earlier Eurocentric and linear view of historical progress, seeing traditional agrarian communes as a model for an ecologically sustainable post-capitalist economy.

Saito sets out five pillars of degrowth communism:

  • Shift the focus of the economy from commercial values to use-values
  • Reduce working hours to raise the quality of life
  • Eliminate rigid division of labour to stimulate creativity
  • Democratise production processes and slow down the economy
  • Focus on the use-value, not productivity, of care and other essential work

His vision of degrowth communism, thus, is rooted in workers’ coops, grassroot movements seeking climate justice, and participatory democracy, through which equitable sharing of commons generates abundance without growth.

 

Green growth for innovation – Growth for Good

The first part of European Commission economist Alessio Terzi’s Growth for Good is devoted to degrowth and ecosocialism discourses, and why he rejects these ideas. While ecosocialism may be idyllic in ecovillages, where people with a shared vision of degrowth choose to live, he argues that it cannot scale to the entire economy. He points out that there are ecovillages but no eco-cities because the sheer size of the population would make consensus decision-making impossible, and that ecovillage residents living in self-imposed frugality still rely on the capitalist world outside to provide many of the essentials.

A chapter of the book tells a cautionary tale of the author’s home country of Italy (and, to reinforce the argument, Japan), a G7 country with abundant wealth and an enviable cultural heritage but with low productivity and stagnant growth, where people live long but are dissatisfied with their life according to the OECD Better Life Index. Far from being a steady-state utopia, the country suffers from short-termist policymaking and a tendency towards anti-establishment populism, and its climate impact reduction is no faster than other EU countries.

Terzi argues that the concept of growth is tightly intertwined with wellbeing, liberal democracy, science and innovation. To him, the fundamental flaw of the degrowth and ecosocialism concepts is that the technological innovation needed to achieve rapid decarbonisation to get the humanity out of climate crisis before too late cannot happen without growth. He argues that the answer to the problem of climate crisis is not to slow down but to harness growth to bring about a green industrial revolution. Terzi’s blueprint sets out six defining principles of green capitalism for climate mitigation:

  • Growth is imperative
  • The price mechanism shapes supply and demand
  • Government action accelerates change
  • Social cohesion must be maintained
  • Early adopters pave the way
  • International cooperation can achieve loose coordination

This vision, where capitalism is directed towards accelerated decarbonisation through measures such as regulation, carbon pricing, green industrial policy and incentives for green innovation, encapsulates the green growth concept underpinning the US Inflation Reduction Act and the European Green Deal.

 

Beyond growth – Doughnut Economics

In 2011, Kate Raworth was tasked by anti-poverty charity Oxfam to write a policy paper to help them decide whether to advocate for degrowth or green growth. In her book Doughnut Economics, she explains how difficult she found this question to answer, and that what she needed was to stop trying to answer that question head-on. Self-styled “renegade economist”, Raworth is sometimes described as a degrowth proponent, but such framing misses the point of her argument. Degrowth is fundamentally the rejection of capitalist economy; Doughnut Economics is more about changing its assumptions and parameters.

At the centre of the book is a simple graphic made up of two concentric circles: the inner ring marking a social foundation of wellbeing that no one should fall below; and the outer ring indicating the ecological ceiling of planetary pressure that we should not go beyond. The picture echoes the image of the nine planetary boundaries arranged around a circle with a “safe operating space” at the centre, but with an inner ring added to show that the space in which we operate must also be socially just.  Raworth argues that, in order to live in the safe zone between these two rings – ‘the Doughnut’ – we need to think about the economy in different ways.

Planetary boundaries and The Doughnut (Kate Raworth) 

She proposes seven principles that guide this paradigm shift:

  1. Change the goal: from TGDP to the Doughnut
  2. See the big picture: from self-contained market to embedded economy
  3. Nurture human nature: from rational economic man to social adaptable humans
  4. Get savvy with systems: from mechanical equilibrium to dynamic complexity
  5. Design to distribute: from ‘growth will even it up again’ to distributive by design
  6. Create to regenerate: from ‘growth will clean it up again’ to regenerative by design
  7. Be agnostic about growth: from growth addicted to growth agnostic

Essentially, the Doughnut is a framework that enables us to focus on the wellbeing of people and the planet. The economy should serve to achieve the goal of getting the humanity into the Doughnut, and whether it grows or not is unimportant. As Raworth puts it, “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”. This approach is an example of the “beyond growth” or “post-growth” school of thought, which argues that the problem is not so much the concept of economic growth per se but our economy’s addiction to growth, and that growth should be seen not as an end in itself but a means to achieve social and environmental goals. Since its publication in 2017, the book has attracted worldwide attention, and the Doughnut Economics framework is now used in policymaking by cities and regions around the world, including Amsterdam, Brussels, Glasgow and Mexico City.

 

Wellbeing economy

In 2023, the European Parliament hosted the Beyond Growth 2023 Conference “to challenge conventional policy-making in the European Union and to redefine societal goals across the board, in order to move away from the harmful focus on the sole economic growth – that is, the growth of GDP – as the basis of our development model”. Speakers of the three-day event ranged widely in their views on the growth question, and one of the focus panel sessions specifically delved into the green growth/post-growth/degrowth debate, with panellists representing these different perspectives.

One of the supporting partners of the conference was the Wellbeing Economy Alliance (WEAll). WEAll defines “wellbeing economy” as:

“an economy designed to serve people and the planet, not the other way around. Rather than treating economic growth as an end in and of itself and pursuing it at all costs, a Wellbeing Economy puts our human and planetary needs at the centre of its activities, ensuring that these needs are all equally met, by default.”

The government of my country, Scotland*3, is a founding member of the Wellbeing Economy Governments (WEGo), a partnership formed in 2018 with the support of WEAll, which also includes New Zealand, Iceland, Wales, Finland and Canada. The wellbeing economy concept does not directly map on the growth debate. Some say it is another name for degrowth and a steady-state economy. say it centres around “economic growth for a purpose”, be it green growth or inclusive growth. There is clearly a considerable overlap and affinity with the growth-agnostic Doughnut Economics framework (and indeed Kate Raworth is one of the WEAll Ambassadors).

As I understand it, wellbeing economy is about focusing on the goal of wellbeing – happiness and health, of the planet as well as people – and redesigning the economy towards that goal. It may or may not require, or result in, growth or degrowth, depending on the path each economy needs to take to get there. Every country is different when it comes to its geography, climate, history and culture, which makes the economy of each country distinct, so I suppose it’s only natural, then, that every country will have to follow its own distinct pathway to get to the same goal.

Perhaps this is where the growth-degrowth debate settles?

 

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*1   Kohei Saito’s English book Marx in the Anthropocene: Towards the Idea of Degrowth Communism, published by Cambridge University Press, is based and builds on 『人新世の「資本論」』, not a translation of the book.

*2   Japanese translation: ケイト・ラワース『ドーナツ経済学が世界を救う：人類と地球のためのパラダイムシフト』
https://www.kawade.co.jp/np/isbn/9784309248486/

*3   The Scottish Government is a sub-national, devolved government within the United Kingdom. Policy areas devolved to the Scottish Government include environment, planning, and economic development, as well as some aspects of social security, taxation and energy network licensing. The UK government reserves powers over, among others, economic policy, energy and trade and industry. Many of these devolved and reserved powers overlap in policy areas that generally come under the scope of green transition.

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