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Help! Six types of degrowth

Jeroen van den Bergh

ICREA, Barcelona&

Universitat Autònoma de Barcelona&

VU University Amsterdam

Interpretations of degrowth

1. GDP degrowth

2. Consumption degrowth

3. Work-time degrowth

4. Radical degrowth

5. Physical degrowth

6. GDP fetishism degrowth (“GDP agrowth”)

1. GDP degrowth

• Most logical, immediate interpretation to outsiders. Useful because consistent with use of term “(economic) growth” by media, economists & politicans

• But blunt instrument of environmental policy

• Dirty degrowth? Smaller not necessarily more beautiful

• Emphasis on size, neglect of composition: shift from dirty to clean inputs & outputs

• Moreover reversal of causality: effective environmental regulation will change composition, and will affect GDP growth – possibly degrowth.

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2. Consumption degrowth

• In quantity not value terms

• Hoped to cause sustainable resource use & pollution

• Ineffective and inefficient way to reach environmental sustainability: underrates shift from dirty to clean consumption (again composition neglected)

• Two approaches to realize consumption degrowth: – (voluntary) frugality – likely to reach the masses?– equal individual quota – politically feasible?

3. Work-time degrowth

• Increased labor productivity has been mainly used to consume more rather than to work less

• Working less means less production & lower wages, so less consumption, but also less work stress and more happiness due to more leisure and time for family and friends, certainly beyond a threshold income (finding of happiness research)

• “Less work-time” is concrete, one-dimensional aimunlike “less consumption” (multidimensional)

• Less working/income limits consumption rebound

4. Degrowth as radical change of the economy

• Ethics, values, finance, markets, work/jobs, money, or even profit-making & ownership– “Escaping from the [capitalist] economy” (Fournier 2008)

• Grand ideas without thorough supporting analysis– No systemic solutions/instrumentation, unclear how to

upscale from niche to society– Humanistic left-wing ideology attractive: equality,

solidarity, citizenship, locality, “good life”

• Convergence to new system much time & unsure to meet environmental aim (“no ecological imperative”)

• Notably climate change demands urgent, simplerstrategy: hard environmental constraints to whicheconomy will adapt

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5. Physical degrowth

• Isn’t this trivial? Don’t we all want this?

• But be careful: – Environmentally/resource relevant physical dimensions– Entropy argument (G-R) often simplistically used

• Old wine in new bottles: sustainable development, environmental regulation, H. Daly’s “minimal throughput”.

• Does labelling these old ideas as degrowth deliverany new insights about environmental policy?

• Some assume physical degrowth = GDP degrowthBut past (weak env. regulation) doesn’t reflect future

Intermediate conclusion

• Degrowth types 1, 2 and 4 not very convincing, while 5 isn’t new. Type 3 makes most sense

• Better worry about effective environmental policies and getting democratic-political support for these

• Whether such policies will then give rise to GDP growth or degrowth should be irrelevant, as GDP (per capita) is not a good proxy of social welfare

• I agree though with Hueting: effectiveenvironmental regulation is likely to result in GDP degrowth. But don’t reverse the causality (as in degrowth type 1)

6. Degrowth as opposing growth fetishism

• GDP fundamental problem, not growth– GDP growth good in some periods / countries– but growth not generally necessary or sufficient for

progress– degrowth not necessary or sufficient for sustainability– also “dirty degrowth” possible

• Goal of unconditional GDP growth is a constraint on our search for progress – frustrates good policies(climate, labour, health, public utilities). – “neoliberal ideology/tyranny of growth” (Fournier 2008), “GDP fetishism”

(Stiglitz 2009)

• But don’t fall in the trap of replacing this by GDP degrowth fetishism (i.e. degrowth type 1)

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The GDP paradox

• Not useful to spend more time on criticizing growth or GDP: has proven to be an ineffective strategy (Galbraith, Mishan, Hueting, Nordhaus/Tobin, Hirsch, Scitovsky, Daly, etc.)

• Better try to understand the reasons for persistent support of the GDP indicator:

Despite all theoretical and empirical criticism of GDP (per capita) as a social welfare and progress indicator, its role in economics, public policy, politics and society remains influential

Explanation of the paradox

• Many academic economists accept the criticism of the GDP indicator but im/explicitly deny its relevance

• This denial comes in two forms. 1. a belief that the impact of GDP information on economic

reality is modest2. a belief that despite its shortcomings, GDP still provides

useful information

My proposal

• Without GDP no measurement of growth =>GDP growth irrelevant - not against & not in favour but indifferent or neutral

• “Degrowth” (esp. type 1) gives too much credit to GDP. “Agrowth” as in “atheism” more precise (Latouche 2010)

• Combine degrowth of types 5 & 6: reduce physical throughput (Daly) & ignore GDP information => ”Relax about (de)growth”

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More info

• J.C.J.M. van den Bergh (2009). The GDP Paradox. Journal of Economic Psychology 30(2): 117–135.

• J.C.J.M. van den Bergh (2010). Relax about GDP Growth: Implications for climate and crisis policies. Journal of Cleaner Production, 18(6): 540-543.

• J.C.J.M. van den Bergh (2010). Six types of “degrowth” and a plea for “agrowth”. Mimeo.