Who is still actively defending green growth? There is the boastful – yet scientifically frail – More from less (2019) by Andrew McAfee (rebuttal here); Per Espen Stoknes (Tomorrow’s economy, 2022) and his attempt to make growth “healthy green.” There is Sam Fankhauser engaging in mouth-to-mouth combat with Jason Hickel, the eco-modernists from the Breakthrough Institute, a small gang of promethean socialists like Leigh Phillips (Austerity ecology & the collapse-porn addicts, 2015) or Aaron Bastani (Fully automated luxury communism, 2020), and a horde of corporate moguls and bureaucrats who, without ever referring to any science on the question, still believe that growth can be green. And there is also Alessio Terzi. Economist at the European Commission, he is the author of Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe (2022). In this article, I want to respond to a number of arguments developed in a chapter titled “Post-Growth Dystopia.”
Degrowth misses an allocation mechanism
“Under a capitalist system, prices provide incentives and signals so that these continuous allocation problems are solved in a decentralized way […] Under ecosocialism, everything instead becomes a centralized problem of allocation and must be solved through common decision-making, or a rulebook for all possible situation” (p. 68). This is a false dilemma with only two options: free markets that are efficient and democratic (capitalism) versus Soviet-style centralised planning that is the precise opposite. If degrowth criticises capitalism, Terzi suggests, then it must endorse the other.
This critique misses the point. First, allocation is a secondary issue for degrowth, which is first and foremost concerned with issues of scale. Let’s remember Herman Daly’s three goals: an economy should have a sustainable scale, a just distribution, and an efficient allocation (see Chapter 5 in Herman Daly’s Economics for a Full World). Even if one were to argue that free markets are the best allocative mechanism (I will have more to say about this soon), it still remains that an economy who operates over its biophysical carrying capacity is doom to collapse sooner or later. Debates over allocation should not distract from the fact that advanced capitalist economies currently suffer from a scale problem, namely the unsustainability of their ecological footprint.
The scale debate has two positions. Either you can show that high-income nations can keep increasing their levels of production and consumption while falling back within planetary boundaries (that’s the green growth position), or you must accept that a certain downscaling of economic activities will be necessary (that’s the degrowth position). I have spent considerable efforts since the publication of Decoupling debunked (2019) researching that dilemma and the scientific literature seems to be converging towards a growth-critical consensus, as exemplified by the results of the latest IPCC report. As someone whose job it is to find a way to make economies more sustainable, I would be the first to celebrate evidence of economic growth ceasing to be an ecological issue. But that’s simply not happening, as evidenced by a growing number of empirical studies showing something that is hardly surprising: producing more makes it harder to pollute less.
Back to allocation. If the jury is still out on the role of markets for degrowth (for my take on it, see pp. 289-301 in The political economy of degrowth), I cannot think of any growth-critical scholar defending their total abolition. What degrowth opposes is the constant expansion of the commodity domain. The access to certain goods and services (healthcare, education, housing, etc.) should be organised differently than through commercial competition. This can take the form of external regulations like minimum and maximum wages, the banning of fossil fuels ads as recently introduced in Amsterdam, or the pricing of carbon via a Tradable Energy Quotas. Or it can also happen by changing certain rules within markets. For example, Jennifer Hinton defends a vision of post-growth where allocation is organised via markets but only with “not-for-profit businesses” (markets without profits); Sophie Swaton proposes an “Ecological Transition Income” given via a system of local for-employment cooperatives (markets without unbalanced wage-labour relations); and a diversity of alternative monies are already in place trying to make market dynamics fairer and more sustainable (markets without general-purpose money). Since there is nothing in the degrowth literature indicating that markets as modes of allocation should completely cease to exist, criticising degrowth on that ground is deceitful.
What Terzi criticises here is not degrowth but socialism. But even that critique falls flat. Depicting planning as bureaucratic and uneconomic is as much a strawman as depicting markets as decentralised and efficient. Both allocating mechanisms, with their respective strengths and weaknesses, can experience a whole spectrum of performance. The real question is whether an allocative arrangement is appropriate. Most countries forbid the buying and selling of organs and most countries allow people to buy and sell socks. Markets are not fitting instruments to allocate organs and there is no pressing reason to carefully plan the sock economy. Reading Terzi, one feels that economies should choose between total marketisation and total planning. But this is not a football game. In practice, economies host a diversity of allocation mechanisms and I find little value in these heads-or-tails debates about ideal-typical economic systems that exist nowhere but in economic textbooks.
It is impossible to redistribute wealth without growing
“In a world in which total resources are fixed, or even shrinking, one person’s gain is inevitably another’s loss, bringing taxation dangerously close to a zero-sum game. Personal success comes to be associated with squeezing resources out of someone else rather than, perhaps, innovating and creating new value for society” (p. 70).
First remark: ecosystems being finite, their sharing is unavoidably a zero-sum game. Take the splitting of the global carbon budget. In order to have a 50% chance of limiting global warming to 1.5°C, we – as humans – must not emit more than 380 GtCO2. If a country emits more than their fair share, it means another country won’t be able to use theirs (same dilemma for water, rare metals, minerals, etc.). We’re back at the scale problem. Rich economies are consuming resources at a pace that jeopardises the functioning of Earth systems. While some of them have managed to reduce a few selected environmental indicators, none has succeeded to bring their total ecological footprint under safe planetary boundaries – hence the need to hit the emergency brake.
There is another problem with that criticism. It assumes that people are only motivated by getting richer and so that an economy that doesn’t reward individuals with money would be socially stagnant. Again, this is not a criticism of degrowth but of socialism. Personally, I don’t buy it. If this money-makes-the-world-go-round mentality was unavoidably true, Doctors Without Borders, Extinction Rebellion, or any other not-for-profit initiatives would have never existed. The reality is that people have various definitions of success, many of them going beyond making money. Scientists want to discover new things they’re curious about, traders want to sell to make a profit, environmental activists want to block coal mines to save the planet, etc.
The problem today is that financial incentives (and monetary wealth) are given too much importance compared to cultural/moral incentives (and social and ecological wealth). This moneymaking craze is the result of a specific system where everything can be bought and sold and where power derives from how much money you have. A society where most means of livelihoods are commoditised makes people dependant on their individual purchasing power, which pre-determines what they can and cannot do. This is why we have so many business schools and so little poetry schools. In an alternative economic system where all people have a secure access to essential goods and services (yes, this means price controls), where jobs are guaranteed, and where inequalities are kept in check, the balance of incentives would change, and so would behaviour.[1]
Degrowth is incompatible with personal freedom
This point is developed in 8 lines, which gives you a fair assessment of its depth (all of Terzi’s critiques span a few paragraphs at best), but let us play with it nonetheless. “Ecosocialism is incompatible with personal freedom […] and a strong, intrusive, paternalistic, and possibility illiberal government would be required to make it operational” (p. 70). It is “a model of simple living imposed top down” (p. 21).
I would be curious to hear Terzi’s definition of freedom (to read mine, see The political economy of degrowth, pp. 252-259). It doesn’t take a sociologist to realise that power – and therefore freedom – is relational. As Max Weber writes, “the probability that one actor within a social relationship will be in a position to carry out his own will despite resistance.” I have power over someone if I can get them to act or think something they would not otherwise do. If I have a lot of money and you don’t, I can get you to do something you would not otherwise do, like clean my house or cut down a forest. If I have a lot of wealth, I lead businesses (and sometime governments) in doing something they would not otherwise do, like take the risk of burning 18,000 cows alive or cut taxes for the wealthiest.
The problem is that freedom today is too strongly dependent on wealth and income. Certain freedoms are auctioned through purchasing power, giving a minority of the population disproportionate access rights to scarce resources. For example, the 10% richest individuals on Earth (only 780 million people) have access to 48% of the world carbon budget. If anything, it should be the opposite: whatever we have left of burnable fossil energy should be made available in priority to these whose needs remain unmet, namely the poorest half of humanity (3.9 billion people) who currently only access 12% of global emissions. The personal freedom to travel the world on a private jet, emitting more than a thousand tons of CO2eq per year is achieved at the expense of someone else not being able to access their fair share of the global carbon budget. In the zero-sum game of ecological economics, the freedom for someone to emit more is the unfreedom for someone else to do so.
Let us not here fall into false dilemmas again. Freedom is always socially framed. Even the most deregulated forms of capitalism would not tolerate heroin, murder, and child pornography. Regardless of my desires, I am denied certain freedoms who are politically considered harmful to others. Ecosocialists defend the right for species and ecosystems not to be degraded, protecting them from ecocide (a crime that might soon become condemnable under EU law), not only for their intrinsic sake, but also protecting other humans whose livelihood depends on them (as in the case of ensuring an equitable split of the remaining carbon budget). This doesn’t mean an absolute loss of freedom but simply a redefinition of access rights. High-emitters will lose certain consumption rights while low-emitters will gain new ones; our overall freedom to use natural resources may go down, but our overall freedom to live in an unpolluted environment will go up.
You cannot keep the good and throw the bad
“The level of well-being achieved by today’s society rests on the complexity organized by capitalism in a decentralized way […]the idea that we could take the parts we like – advanced healthcare, high-level education, technological innovation – because ‘they have been achieved,’ and simply ditch the rest, is misplaced” (p. 73). We’re back here at the biophysical zero-sum game. One thing is sure: we cannot have it all. And so, yes, we’ll necessarily have to choose between larger homes, larger cars, larger planes, larger steaks, etc. A biophysical budget is like a bank account: you can only spend what you have. If you realise you’ve been over-spending, then comes the time of scaling down.
Terzi’s argument is that there is no baby-safe lowering of the bathwater. This is an argument I often hear about advertising. We cannot get rid of advertising without getting rid of the media who depend on ad revenues to survive. Except yes, we can. We just need to find another way to finance these media. This is not rocket science and it happens more often than we think. Look at all these cities who transition to free public transportation (376 cities in France). One would think that such an extreme form of price control is impossible because, well, who is going to pay for the infrastructure if not the users? In reality, free public transportation can be financed in many different ways, including ones where the service is actually free of charge for final users.
The three only things you need to run an economy is labour time, energy, and materials. Money is not a factor of production; it is only a means of accessing all the things you need to produce. I find it strange to argue that we need to produce more SUVs, ads, and steaks (which waste a tremendous amount of labour time, energy, and materials) in order to have competent dentists, adequate health services, and properly functioning schools (which also require labour time, energy, and materials). From the zero-sum game perspective of ecological economics, this is actually the opposite. If you want better health and education, you need to mobilise labour, energy, and materials, and in an economy in ecological overshoot, you won’t be able to access these resources if they are already monopolised to produce colour-changing cars, pet cameras, and touchscreen toasters. In order to have the good, you have to get rid of some of the bad.
I find Terzi’s critique surprisingly reactionary. As if economies were like Jenga towers risking to collapse if anyone tried to change anything. In practice, people who owns companies and people who run them, as well as governments change the economy every day. The question is not whether or not to design economies (everything about an economy – except the natural resources it uses – is socially constructed) but rather how should economies be designed, by whom, and to achieve what goals.
The international dimension
“[C]ommitment to degrowth leads, in an act of self-preservation and contrary to the idyllic narrative, to an insular worldview and closure from the outside world […] we can expect less exposure to outside cultures and possibly more xenophobia” (p. 75). Again, not much effort was put behind this two-paragraph long critique, which only stands on a fleeting reference to Benjamin Friedman’s The moral consequences of economic growth (2005) peppered with three mug quotes from Frédéric Bastiat, Joseph Priestley, and Montesquieu.[2]
The concept of “décroissance conviviale” (convivial degrowth) emerged in 2002 as a strategy for global justice. The promotion of degrowth in a country like France was not a self-interested struggle for survival, but rather an attempt to free the global South from the “imperial mode of living” of rich, overconsuming nations. This is even truer today. The degrowth discourse interacts within a complex “pluriverse” of visions of prosperity and stands behind a strong anti-colonial politics. If anything, it is much more epistemologically agile than the Western-vision of money-measured progress that is at the core of most “sustainable development” approaches.
Regardless of your opinion about globalisation, it doesn’t enable you to escape the laws of physics and biology. From the perspective of ecological economics, the scale of an economy is set by the carrying capacities of its supporting ecosystems. This applies to all cultures and all economic systems alike. After that, there is no prescription as to what should be made with these resources, except perhaps a direct focus on well-being. Nothing forbids communities to dedicate their fair share of world resources to travels and organise cultural events in a spirit of “open localism.” In theory, this even applies to flying. Today, less than 10% of the world population take planes, only 2-4% fly internationally, and 1% of the world population causes 50% of the emissions from aviation. If what you care about is cosmopolitanism, the best way of doing that would be to redistribute access to flying to the larger number (a socialist argument). In order to do that, we need to fly less in the global North in order for other people to be able to fly at all (a degrowth argument).
Will degrowth cause mass exodus from “all of those who are not interested in such a project” (p. 76)? This is the good old Atlas Shrugged scare, a classic move in neoliberal kung-fu. If you try to tax the rich in order to invest into public services, they will just leave. If you try to introduce stricter environmental standards, businesses will fly away like a murder of crows. The reality is less novel-worthy. New Zealand introduced the “well-being budgets” as an alternative to GDP in 2019 without causing much of a stir. The EU has banned the sales of fossil vehicle in 2035, which didn’t make Renault, Mercedes, and Ferrari move to the UK. Besides, the question is not whether we should or shouldn’t downscale production and consumption in rich countries (we’ve seen that this is an unavoidable condition for sustainability). The real question we economists should be asking is how to organise an effective ecological transition while minimising its drawbacks (capital flight, undesirable unemployment, poverty risks, public finances, etc.).
“The whole idea is based on a misreading of the global economy as a zero-sum game. Pursuing a degrowth agenda in the developed world would bring about a collapse of global trade, closing the door to any hope of fast growth in poor countries, turning economic miracles into mirages, and forcing millions to remain in extreme poverty” (p. 185). This is just another boogeyman. First, as if economic growth in the developed world was lifting the poor out of poverty. This is the “trickle-down” argument, another neoliberal fable without much scientific currency. Between 2010 and 2020, only 1% of the increase in world spending was attributed to extremely poor households. This is also true at the national level: in Australia, the top 10% income earners reaped 93% of the benefits of economic growth between 2009 and 2019. Already-rich nations, and especially their upper classes, appropriate the lion share of the financial benefits while shifting the ecological costs to the most vulnerable countries – it’s called ecologically unequal exchange (for more, see The Divide). If anything, consuming less in the global North will actually lessen the social-ecological beating inflicted by a minority of affluent individuals into the rest of the world.
Degrowth will slow down innovation
Final argument from Terzi: “With shrinking resources available to societies and governments, and without an efficient allocation mechanism to govern complexity, ecosocialism would be incapable of sustaining such knowledge machinery” (p. 78). For Terzi, “the only credible way of avoiding a climate catastrophe is to accelerate the development and widespread adoption of ‘green’ innovation. […] abandoning capitalism would take us further away from our climate goals, by throwing sand in the gears of an innovation machinery that is unmatched in human history […] innovation and economic growth are, in fact, inextricable” (p. 22).
Innovation is our ability to solve problems. But the very definition of a problem is socially constructed. In an economic system where moneymaking drives innovation, the problems on top of the priority list reflects the needs of the wealthiest. I see no other reasons why we are wasting our best mathematicians in the design of trading algorithm and our most creative communicators to find ways to trick people into buying unnecessarily large cars. “The strength of the capitalist system on the innovation front is not that it creates more geniuses, but rather that it is an efficient organizing principle, providing strong incentives for people to develop ideas” (p. 147). Capitalism doesn’t provide incentives for people to develop ideas, it provides incentives for people to develop ideas that they can sell for money. There is a crucial difference. I’m all for making the best out of human creativity, I simply think that the capitalist framing of innovation is too narrow, leaving out an array of social and ecological innovations that should be considered crucial but aren’t currently since they are not lucrative.
This is not a matter of being for or against innovation. The real question is: On what kind of problems should we be spending our limited capacities for innovation? From an ecosocialist perspective, liberating science and innovation from the necessity to be lucrative would free some of our problem-solving capacities for some projects that have been neglected by for-profit research and development. And we’re here again facing a zero-sum game issue. In order to innovate, we need to mobilise resources: labour time, materials embedded in machines and infrastructure, as well as the energy to run them. Today, a large part of these very resources are being used elsewhere, hence the need to slow down certain activities in order to free up resources. As long as innovation requires humans and machines, there cannot be “infinite innovation on a finite planet” (p. 156). That’s the degrowth take on technological progress: we cannot have it all and so therefore we must choose (for a more detailed treatment of this question, see The political economy of degrowth, pp. 338-350).
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Quick and dirty, here is the best way to summarise Terzi’s critique of degrowth. His chapter only references seven texts on the topic, a rather shallow understanding of a literature that spans almost 700 articles. Terzi doesn’t make a difference between degrowth and post-growth and conflates all growth-critical stances with ecosocialism, two approaches that have actually been opposing each other for two decades. The overall result is sloppy – a sneer more than an actual critique. To add arrogance to incompetence, his light-weight arguments are thrown around with the superior attitude of a know-it-all economist (the first two pages of the chapter addresses the “pub economics of degrowth,” shaming degrowth as being “economically illiterate,” p. 17). This argument of authority might intimidate a few activists but it won’t fly very far with a growing community of economists like myself whose daily job it is to research these precise questions.
[1] Difficult here not to quote a sentence from John Maynard Keynes Economic possibilities for our grandchildren (1930): “the love of money as a possession – as distinguished from the love of money as a means to the enjoyments and realities of life – will be recognised for what it is, a somewhat disgusting morbidity, one of those semi criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease.”
[2] This is a point that I’ve already rebutted elsewhere (pp. 448-454 in The political economy of degrowth).