A response to Branko Milanović: The magic of degrowth

Last week, I was only an economist. But now, I am also a magician. On February 20^th, Branko Milanović published a post on his personal blog accusing degrowth of “magical thinking.” As a specialist of the topic, I have no choice but to come clean about my supernatural abilities. This is not the first time. Milanović already criticised degrowth back in 2017 over a back-of-the-envelope GDP calculation. Even though he still uses this demonstration, I won’t be addressing here because Jason Hickel already did in 2017 as well as more recently. Instead, I’ll comment on three other points made in the text. Degrowth, Milanović argues, is (1) a wicked objective that is (2) wishfully utopian and (3) poorly thought out. Let’s see why he’s wrong.    

The joys of minimalism 

Calling degrowth “an asceticism reminiscent of the early Christendom” was a cheap shot. Degrowth is not belt tightening sacrifice, the literature is quite clear on this. The oldest degrowth periodical – the French journal La décroissance – bears as subtitle “le journal de la joie de vivre” (the journal of the joy of life). Already in 2002, Serge Latouche was presenting the purpose of degrowth as a “the flourishing of sentiments and the production of a festive, even Dionysian life.” Priding himself in being an “amoureux du bien-vivre” (a lover of the good life), French degrowth advocate Paul Ariès champions an attitude of bon vivant who enjoys life, takes pleasure in tasty food, exuberant revelry, and extravagant love relationships. This is the less-is-more spirit of “voluntary simplicity,” what Kate Soper calls “alternative hedonism”: minimalism applied to material stuff in order to find a life of greater purpose, fulfilment, and satisfaction. And this is far from a grim “immiseration of the West.” 

You don’t need to be a hardcore anti-capitalist to realise that more is not always better. Psychologist Barry Schwartz calls this the “paradox of choice”: having too many options can be overwhelming (anyone that has ever tried to watch a film on Netflix knows this). Plus, the more options we have, the more options we must give up whenever we make a choice. And then we wonder: What if the other product was actually better than the one I picked? I call this the opportunity cost syndrome, the fear of missing out applied to consumption. For those who already have enough to satisfy their needs (and these are the people primarily concerned with degrowth), simplifying one’s lifestyle can be a source of serenity. 

In a capitalist economy, you need money to buy stuff, and to get money, you need to give up time that could have be spent otherwise. This is the “high price of materialism”: locked into a work-and-spend cycle, we lack the time and energy to engage in activities that are crucial for well-being: spending time with loved ones, enjoying nature, learning new things, discussing ideas, and making stuff. Again, it is a matter of threshold. Driving a car means working to earn the money to buy it, fix it, insure it, park it, clean it, and worry about it. Put all these costs together and you may realise like Ivan Illich that the car is slowing you down, and that, after all, you would have been better off cycling or taking the bus.  

Consumerism becomes even more pernicious when commodities are used for status competition. The pleasure you derive from a positional good depends on how much others have. If everyone was awarded the Nobel Prize, there would be little value in receiving it. Such competition is a societal zero-sum game because everyone strives to gain advantage, but since all are trying to do so, all remain in the same relative position. As Fred Hirsch writes in the now classic Social Limits to Growth (1976), “if everyone stands on tiptoe, no one sees better.” The more positional an economy is, the less effective will income growth be at raising well-being. 

These reasons explain why, past a certain threshold, income ceases to correlate with well-being. Therefore, we should forget income and focus on the welfare purchasing power of income. In France, we call it pouvoir de vivre (living power), recognising that the ultimate objective of economic organisation should be the satisfaction of concrete needs. To live well with less money, let’s start by hunting the rent-seeking practices that make goods and services unnecessarily expensive. I paid my new tooth 7 times its cost-production price only because the dentist I came to visit was still exempted from public price controls. We applied price controls to medical supplies during the pandemic, why not doing so for other essential goods like housing, food, energy, information, transportation, among other Universal Basic Services everyone should have access to. 

Degrowth involves a defence and extension of the sphere of gratuity: goods, services, and amenities that are offered unconditionally of purchasing power. Milanović gives a perfect example: “Governments could then buy them [secondary homes], create a kind of Paradores (Spanish state-owned hotel chain that uses vacated monasteries), and people in (say) England, rather than jetting off on vacation to Thailand, would spend their annual holidays nearby in some of the formerly privately-owned mansions.” Why could this logic of decommodification not apply to other sectors, not necessarily run by the state, but also via commons? One could buy less processed food if we had access to a garden to grow veggies; mortgage repayment wouldn’t be as painful if interest rates were capped like it is in community banks; education and training would become affordable because of time banks. The essential point to grasp here is that investing in public goods could enable a slower-paced, less acquisitive, and yet happier way of living. 

And let’s not forget why this is necessary: we must urgently reduce environmental pressures. The impact we have on nature remains strongly coupled to economic growth, and green growth is nowhere near the scale where it would allow the global North to keep going. As Giorgos Kallis explained, the call for degrowth concerns affluent regions of the world – the one who are today responsible for the lion’s share of environmental degradation. What I hope to show is that we can make life just and enjoyable while slimming down the biophysical metabolism of rich, nature-intensive economies. Jason Hickel has termed this “the beautiful coincidence of degrowth,” the fact that what we need to do to survive is the same as what we need to do to have better lives. 

Policies for degrowth 

“Degrowthers live in a world of magic,” Branko Milanović believes. A world where “merely by listing the names of desirable ends they are supposed to somehow happen.” This is unfair to the field of degrowth studies considering the amount of ink that has been spilled on the question of the how. 

This question has been in the agenda for long, with numerous papers aiming to solve concrete transition issues: discussing the shapes of a green new deal without growth, the role of the state, eco-welfare policies, or more specific proposals like income and wealth caps, complementary currencies, or work time reduction. The last degrowth conference (“Strategies for social-ecological transformation,” Spring 2020 in Vienna) was dedicated to this precise topic, and so were a number of recent book publications like Degrowth in Movement(s): Exploring Pathways for Transformation or The Case for Degrowth. I am all too aware of this because I spent 200 pages of my doctoral dissertation wrestling with this very question. If Branko Milanović had been doing his homework, he would know that the question of the how occupies a large portion of the degrowth scholarship. 

Let me show you by discussing rationing and the taxing of flights, the two policies selected by Branko Milanović. Carbon rationing is a classic of the degrowth literature. Take the the Tradable Energy Quotas (TEQs) proposal for example. Every year, an independent public organisation sets up a yearly carbon budget and splits it in permits. A portion of these permits is credited to citizens in the form of a carbon allowance held on individual smart-cards, while the rest is auctioned to institutionalised energy users like firms, associations, and the state. Every time you purchase fuel or electricity in euros, permits are automatically deduced from your allowance, with the amount varying depending on the carbon-intensity of the product. Those using less than their personal entitlement can sell them at the national price to a permit dealer. And in reverse, those who wish to consume more than their share can purchase the permits available for sale.

Flying is a good example of an unequally distributed and ecologically intensive good. Only 1% of the world’s population cause 50% of commercial aviation emissions, while 90% of the world population never flies. In Degrowth of aviation, the organisation Stay Grounded explains how to reduce air travel in a just way: put an end to tax exemptions; tax fuel (e.g. a 0.33€/litre kerosene tax); impose a Frequent Flyer Levy (you get one levy-free first flight every three or four years, but the second flight bears a levy of 150€, with that amount doubling for each additional flight); set limits on the number of flights per day; introduce moratoria on new infrastructures; scale down existing airports; and develop alternatives to plane travel. 

Milanović worries about the economic effects of such sectoral shrinks, and he’s not the only one. This is why we need to think in terms of policy bundles – not one silver-bullet intervention but a toolbox of instruments to operate a complex social-ecological transformation. For instance, we can deal with unemployment in the aviation sector by reducing working time and sharing available jobs as well as introducing a green job guarantee to help workers transition to new jobs. This is not magical thinking; this is careful policy design.

These are two policies but many others exist. In fact, in my PhD dissertation The Political Economy of Degrowth (2019), I have reviewed the entirety of the degrowth literature scanning for concrete proposals. Results: 140 policy instruments have been discussed until now. There is now an online database where you can find all these proposals, and several of them have already been explored in modelling exercises, for example for Canada and France. Extraordinary objectives demand extraordinary instruments, degrowth advocates know that, and this is why a number of us work hard to figure out how to make degrowth happen.   

Milanović makes a vague reference to two well-known policies and calls that “non-magical thinking in dealing with climate change.” Compare this to the hundreds of policy proposals, modelling exercises, and transition scenarios envisioned by degrowth scholars in the last decade, and you quickly realise who’s the trickster. 

The need for utopian thinking 

Defenders of business-as-usual often paint revolutionaries as hopeless romantics building castles in the air. But we need utopian thinking. Under the disguise of a discourse of politics of the possible where we are summoned to be “realistic,” bold ideas are being withered to mere tweaks to the existing order. Instead of squabbling about which variant of capitalism to adopt, we must broaden our horizon of possibilities beyond the pursuit of economic growth, capitalism and, perhaps, even beyond economic rationality itself.

Some would stop me right here quoting Marx who “do[es] not write recipes for the cook-shops of the future.” Put back into context, this statement was an attack against the utopian socialists of the mid-19^th century (Fourier, Owen, Saint-Simon) who produced elaborate blueprints of ideal societies. Laudable ideals, Marx thought, but wishful for that they included no convincing plans on how to make them happen. What Marx underestimated is the power of utopias to educate desire, to fuel the social imaginary. He dismissed utopias without realising that these outlandish plans were the visible tip of a more diffuse revolutionary momentum. 

Of course, too-precise blueprints become dangerous when they are turned into immutable dogmas; but not all utopias are written in stone. Apparent oxymorons like real utopia, concrete utopia, or nowtopia emphasise that utopias are performative fictions that are rooted in the present and as such constantly evolving. The production of utopias is nothing less but the process by which societies dream, and without them, there would be no progress. Degrowth may be an impossible goal in today’s society but it is an impossible goal worth having because it expands the very notion of the possible.  

In a blog post responding to Jason Hickel, Milanović considers the degrowth program “just so enormous, outside of anything that we normally can expect to implement, that it verges, I am afraid, on absurdity.” From their deluded worldview, economists call many things absurd: altruism, market disequilibrium, shutting down coal mines, giving nature value, etc. The list is long and makes for witty chuckles during academic dinners, at the expense of economists’ lack of knowledge of the real world. So Milanović calling anything absurd should not be too shocking. If anything, it just shows the desert that is the imagination of mainstream economists. If everyone was so sold on fast-and-furious money-making, we would not have seen the rise of Extinction Rebellion and FridaysForFuture, among many other movements pointing to how inadequate our economic system is. Milanović discards the degrowth agenda believing that no one would ever voluntarily vote for such a course of action. Again, these are the words of an economist with eyes stuck on the GDPmeter, without realising that from a different perspective, these changes constitute progress.  

Looking at reality without national accounting blinkers provides a different picture. The post-growth economy described in the degrowth literature already exists in part. There are almost a thousand Collective Interest Cooperatives (Scic) in France who organise their business according to not-for-profit principles. You can find thousands of complementary currencies and more than 10,000 ecovillages around the world. People share their possessions in object-sharing networks, swap skills in time banks and repair cafés, help each other through childcare circles and community banks, organise giveaway shops and supper clubs, allocate dwellings through housing cooperatives, grow their food in communal gardens, and manage to enjoy life without constantly shopping. To the average economist, this is a freak show – absurd indeed. But these practices exist in the real world, and studying them carefully might inspire us to invent the just and sustainable economy we so dearly need today. 

Are these post-capitalist practices doomed to remain glitches in the matrix? In his 2017 essay, Milanović played the cynical card, affirming that we “have fully accepted […] the objectives that make capitalism thrive,” and that therefore, these changes cannot become widespread without being imposed unto an unwilling population. First, we must realise that the growth-obsessed culture is not the result of “several centuries of exposure to market ideology and way of life.” Let us not forget that the concept of economic growth did not exist before the birth of national accounting and macroeconomics in the 1930s. As documented by historian Matthias Schmelzer, the pursuit of GDP growth was still actively resisted by politicians throughout the 1960s. The common sense that more-money-is-better applied to all spheres of life is recent, and as such, still malleable. 

And after all, as Giorgos Kallis wrote in response: “If Branko Milanović is right about the social/political impossibility of degrowth, then I want to hear what is his alternative.” Just throwing a couple of vaguely described policies is not going to cut it. And dismissing degrowth over a quick-and-dirty calculation without paying attention to the literature appears irresponsibly cavalier in these dire times where novel ideas are so desperately needed. 

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Degrowth is magical, not in the sense of resembling magic, but rather in the second sense of the term: “beautiful or delightful in a way that seems removed from everyday life.” By being removed from everyday life, degrowth enables us to question the prevailing commonsense of more-money-is-better and educate our desire for something better. And the idea of a post-growth economy is indeed beautiful; an economic system where we can satisfy our needs without falling into slavery to economic growth, with all the social and ecological wreckage it creates. This economy won’t be pulled out of a hat. To organise a just transition, we need to develop complex policy proposals and transition scenarios, and study them to figure out what options we have. This is not magic, this is science and politics – he said before vanishing in a puff of smoke.