Degrowth: why we need a new political economy | Rethinking Poverty

Degrowth: why we need a new political economy

Posted on 17 Dec 2020   Categories: Blog, Climate crisis, New economic models, The state we want Related Tags:  

by Caroline Hartnell

Degrowth, or he end of growth is not the end of the world, says Parrique. ‘It can be the beginning of many worlds.’ … Basically, degrowth means a decline of resource use to lessen environmental impacts; it means producing and consuming less. But we can’t pursue degrowth in a system designed for growth.

Q: can you have green growth? 

A: no. It’s like talking about a flat earth, a contradiction in terms. We must accept the ecological limits to growth.

Q: can you have a degrowth economy within capitalism?

A: no. Capitalism is a system geared to accumulation of capital. All our institutions are designed for this.

If we take these two questions and answers together, and if we accept that climate change is happening and caused largely by human activity, we must conclude that we need to look at how to transform our economy and create a world where we can all thrive. Which is what economist and degrowth researcher Timothée Parrique was addressing in a fascinating talk on 27 November, hosted by Extinction Rebellion and Money Rebellion, as part of a week’s events launching Money Rebellion.

‘Our economy has created extraordinary capacity to destroy the environment,’ says Parrique. ‘We have turned purchasing power into pulverising power; we have turned the economy into a weapon of mass destruction, a death star. The economy is at the heart of the social and ecological crisis we face today.’ The pandemic has for the first time in history slowed the economy right down and allowed us a time of reflection from the outside. ‘As we recover, it’s a historic opportunity to change the rules of the game.’ 

Money Rebellion's talk on degrowth

Can we change it?

The economic system we have today tends to be presented as the product of the autonomous operation of market forces, the outcome of an ongoing ‘process of betterment, a natural selection of the best economic systems, a mechanical process of evolution’. It’s not, he says. ‘It’s the outcome of political decisions, power relations, social choices. What can be constructed can be deconstructed.’ Significantly, Parrique describes himself as a political economist, not an economist. 

Why the focus on growth?

The limits of growth: enter degrowth
The limits of growth: enter degrowth

For him growth is a good starting point. No one talks of capitalism, let alone neoliberalism, as the thing we are all aiming for, he points out. Economic growth, on the other hand, is ‘everywhere on everyone’s agenda’. Economists have become all-powerful, and the economic has become overwhelmingly the focus of society. This is the growth economy, he says, based on specific institutions geared towards growth, eg profit-seeking companies. People are terrified of not having growth – we call it ‘stagnation’. GDP was once a means, but it has become the end. We talk a lot about the pandemic harming GDP. 

Looking at ‘growthism’ (he makes due apologies for the ugly term!) as a defining feature of our economic system today enables us to link up the other features, and think about alternatives. ‘Striving for endless accumulation is what has made growth a death star,’ he says. There are biological limits to growth, and also social limits: when the realm of the for-profit market economy gets bigger, it encroaches on non-economic aspects of society. 

Neoliberal orthodoxy posits that it’s the economy that produces morality, that morality emerges from market interactions. But this is wrong, insists Parrique. To inform changes, we need values (this is the difference between economics and political economy, he says). The economy has been dissociated from social and moral frameworks. But morality must frame the economy. 

In any case, economic growth is futile: it’s not contributing to wellbeing. Instead, inequality and poverty are increasing. ‘A system based on constant expansion of the economic sphere is bankrupt.’

Enter degrowth

The end of growth is not the end of the world, says Parrique. ‘It can be the beginning of many worlds.’ Growth is an abnormality, he says. Economic growth started only in the industrial revolution – the discovery of fossil fuels and the beginning of growth came together. Economic growth is now slowing down, and the window of being able to use fossil fuels to achieve growth is closing. ‘We need to get together and make a different set of choices about all our institutions.’

Basically, degrowth means a decline of resource use to lessen environmental impacts; it means producing and consuming less. But we can’t pursue degrowth in a system designed for growth. A for-profit company will go bankrupt without growth. We need to be able to finance the public budget without relying on taxation from unsustainable, polluting activities. Degrowth means slowing down the metabolism of ‘fast and furious modern economies’ to be sustainable, guarantee prosperous lives for everyone, bring back balance with the natural world and reduce inequality. Think Kate Raworth’s doughnut economy and the safe space where everyone’s needs are met without breaking the planet’s ecological boundaries.

Why use the term ‘degrowth’?

How can we make people warm to the idea of degrowth, one audience member asked. It sounds so negative. Isn’t there a more positive name? Any number, agrees Parrique: sufficiency economy, steady state economy, post-growth economy, wellbeing economy, economy for the common good. And yes, we do need a destination, something to desire. ‘Degrowth is not a sexy concept but it creates controversy. Who would oppose the idea of a wellbeing economy? We need to start discussing alternatives. Once we have accepted the idea of economic limits, the term degrowth won’t be needed. It’s a divestment method.’

We need to move beyond the hegemony of the capitalist growth-based economy – money-based economics – to a diversity of ways of organising the economy, bringing together different economic concepts, both new ideas and ideas that were around before the industrial revolution. 

Can we have growth in sectors we want to see expand?

This could include explicitly ‘green’ jobs related to transport, domestic heating, renewable energy, etc, as well as areas like health, education and social care. Here the answer is a ‘yes’. These are ‘use value sectors’, says Parrique, satisfying needs not extracting value. We don’t need endless food or endless medical care. When our needs are satisfied, there is no more need to expand the sector. So expanding these sectors is compatible with a steady state, sufficiency economy. A need-level economy will be a steady state economy. Health, education and social care are in any case low-carbon sectors, labour-intensive but not resource-intensive, as are services generally and areas like sport, entertainment and culture.

How can we change institutions that are locking the growth economy in place? 

We don’t have to change them all at once, says Parrique. We need to look for the low-hanging fruit. A job guarantee, for example, would be easy to introduce – guaranteeing that people can continue to participate in the economy in a way that’s just. Or work time reduction – valuable both in itself and to enable us to develop economic alternatives. Alternative currencies, eg time banks, consumer cooperatives and local currencies, can re-embed the economy within environmental and social limits. But they take time to develop. If we can reduce the time spent working and producing consumption goods, we can free time for developing these alternatives. We can’t do this if everyone works 60 hours a week. 

You can also start reducing inequality, without which everything else will fail. Parrique cites the gilets jaunes/Yellow Vests, where economic and environmental aims were pitted against each other. In his view, it’s best to focus first on eradicating extreme wealth and redistributing – empirical evidence shows that the wealthy are the most polluting, and destroying the planet. A maximum wage policy, eg no one can earn more than seven times the minimum wage in any enterprise, as in the social and solidarity economy in France – not-for-profit, grassroots initiatives –  is a good place to start. Or you could be less radical and reduce the ratio year by year, even starting from the status quo. 

Gilets Jaunes protests in 2019

Some things, eg changing the way we finance the public budget, and negotiating new international trade regimes and carbon budgets, are more complex. But even the low-hanging fruit is neglected in mainstream economics. Developing new approaches starts to open the Overton Window – the window of discourse. 

A designed transition towards degrowth

Although we don’t have to change everything all at once, the transition must be designed, otherwise it is likely to be unfair, even ineffective. Parrique insists on this. We have a plurality of demands and ideas for actions, but we need to map interactions, to move from a wish list of demands to a pathway for change. We need a map specific to each country, company and community, and a toolbox of policy instruments (laws, practices, groups of people identifying problems and coming up with solutions). 

The transition towards degrowth must be designed

We need what he calls ‘a symphony of top-down and bottom-up changes’. In France in 2014 local currencies were considered illegal; there are now 30 in France, made possible by a change in the law. In Parrique’s view, the vision of an alternative system can exist only at the level of community – the state won’t be able to see beyond the status quo – but the state can facilitate the blossoming of institutions from the ground. 

Changing the way economics is taught

The current focus on neoclassical economics (rather than Marxist, feminist, ecological, etc), seeing capitalism as the end of history, presents economics as ‘complex wizardry, hidden behind jargon and maths’, which takes years of study so is beyond the understanding of most people. This limits our ability to imagine anything else, says Parrique. ‘We must teach a plurality of approaches to produce economic imagination and the ability to think outside capitalism.’ He had to study economics for four years and unstudy it for a further four years before starting to work on alternatives, he says. ‘If only economics programmes asked students to use their imagination and redesign the economy.’ 

We also need more journals and other outlets for post-capitalist ideas. He recommends the Exploring economics website, which describes itself as ‘an open access, e-learning platform on pluralist economics. Here you can discover and study a variety of economic theories, methods and topics.’ 

This article only skims the surface of Timothée Parrique’s rich and fascinating presentation. For those who want to find out more, you can watch the whole thing here.  

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Posted on 17 Dec 2020   Categories: Blog, Climate crisis, New economic models, The state we want Related Tags:  

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