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european journal for alternative thinking and political dialogue

transform!

Eng

lish

The Left Between

Growth andDe-GrowthDiscussion Papers

Edited and introduced

by Teppo Eskelinen


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The journal

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The Left Between

Growth andDe-GrowthDiscussion Papers

Edited and introduced

by Teppo Eskelinen


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Imprint:transform! european journal for alternative thinking and political dialogueEdited by transform! Europe, BrusselsEditor: Walter Baier (V.i.S.d.P.)

transform! 11 Rue Michel-Ange, 1000 Brussels, Belgium

Layout: typothese.atPrinting: Resch KEG, 1150 Vienna, Austria


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List of contents

Preface: Growth an Indicator of the Past 6

Teppo Eskelinen political philosopher, Left Forum (Finland)

A Note on Economic Growth

Seen Through the Prism of the Crisis 14Elena Papadopoulou economist, Nicos Poulantzas Institute (Greece)

Lets Talk About Money, Value and Wealth 21

Jean-Marie Harribey, economist, former co-president Attac (France)

In Search of a (New) Compass

How to Measure Social Progress, Wealth and Sustainability? 31

Josef Baum economist and geographer, transform.at (Austria)

Economic Indicators are Really About Power. Political

Dimensions of Object and Method in Debates on Growth 44

Lutz Brangsch economist, Rosa Luxemburg Foundation (Germany)

The Link Between Growth and Jobs: Myth or Reality? 58

Chantal Delmas Espaces Marx (France)


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Critical discussion on economic growth has gained standing in recent times,mainly because o environmental concerns. But the recent inancial crisisas a general crisis o the contemporary growth model has deinitely broughtmore uel to the ire. As the inancial sector in the US and Europe has reducedits lending to the productive sector, growth has been slowed down, whichcauses politicians o every orientation desperately to seek strategies or return-ing the growth track. Yet simultaneously, there is growing acknowledgementthat the prevailing inance-led growth strategy is unstable and prone to crises,

along with being highly unjust in terms o distribution o money and assets. Itwas recently estimated that regulatory and taxation measures, which wouldcurb speculation and stop overt risk-taking by banks, would slow down growthby 1 per cent annually. While this was intended to be an argument against thesemeasures, many people will eel that this slowdown o growth is in itsel desir-able. In addition, the general orecast o jobless growth or most countries inEurope spurs the realisation that, in inancial capitalism, even employment isnot necessarily very closely correlated with growth. Simultaneously, the envi-ronmental concerns are ever more pressing, and the argument that everlastinggrowth is simply absurd has become impossible to dismiss.

he inconsistency o growth as a normative goal has several acets. First, eco-nomic output is no indicator o well-being or any other utopian goal o humanand political lie. Second, economic output as such says nothing about its dis-tribution, let alone relative power positions within a society. hird, economicgrowth is potentially dangerous. Examples o this include production o dan-gerous goods such as weapons, excessive commodiication o culture, destruc-tion o orms o subsistence in the global South, privatisation o public services,which counts as growth, and so orth. O course, the increased production ogenuinely desired goods also registers as growth. But what is essential here is

that growth is a broad etishisation category, and as a broad category it wouldbe absurd to evaluate it categorically, whether negatively or positively. Rather,the popularity o both viewpoints, especially the position o regarding growthas categorically positive, ought to attract our interest: how can this viewpoint be

Preface: Growth

an Indicator of the PastTeppo Eskelinen


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so popular? Why do societies seek growth, not as merely one thing among oth-ers but as a priority? Are there any reasons or this beyond a prisoners dilemma

situation: things would be even worse without it?

A challenge for the left

Looking at the centrality o growth in political discourse, growth can beseen as one o the cores o the development model which has prevailed in theWest. hus the debate on how to think about growth may well necessitate abroader discussion o the very model o development and what is understoodas progress. he belie has been that the growth o production will result in

enhanced general well-being, with a trickle-down mechanism liting the poorup rom poverty. aking these shaky presumptions or granted has led to anexcessive appreciation, a etishisation, o production and its increase, which haslead to a very energy-intensive orm o society.

Yet the environmental crisis and the inherent inequalities and unsustainabilityo the system provide ever more empirical evidence to counter this paradigmaticidea. his has lead to a number o very dierent kinds o responses. he politi-cal mainstream, while tacitly agreeing that everlasting growth is a rather unlikelyprospect, sticks to growth as it eels that alternatives do not exist. Granted, growth

has not created employment or all, and quite likely never will, but withoutgrowth societies would ace even more catastrophic scenarios, they argue. Inother words, the political mainstream admits that it bases the bulk o its politicson a oundation it knows to be absurd, since it eels that alternatives do not exist.On the radical agenda, on the other hand, the de-growth movement has quite

vocally called or a reorientation regarding growth. According to the ideologueso this movement, environmental imperatives ought to be taken as a serious sign,whose only logical consequence is to aim at steadily decreasing GDP.

Neither o these responses can be satisactory or the political let. First, letpolitics cannot merely take or granted such imposed necessities, such as the needto promote growth in the absence o alternatives. Admittedly, parts o the trade-union movement have been sympathetic to the argument or everlasting growthprecisely because at present there seem to be ew alternatives to it in creating

jobs. Yet this cannot be taken as a general let position, even though some Greensare eager to see it that way. Second, the problem with the de-growth movementis that is operates with the vocabulary o growth, taking a normative u-turn butleaving the discourse untouched. A more analytical position is needed. Growth asa concept is more ambiguous than the de-growth discourse would allow.

Naturally, the importance and urgency o the concerns o the de-growth

movement, namely the ecological predicament, cannot be overstated. Econom-ic activity is closely linked to the levels o consumption o material resourcesand emissions o greenhouse gases. It is arguable, and indeed oten argued,that environmental externalities be decoupled rom the value o economic


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output, but at least so ar all orms o capitalist economy known to us havecreated environmental destruction quite correlated to the level o economic

output. Humanity now inds itsel in a completely novel situation, as it is acinga clear, ecologically dictated deadline in the orm o climate change. Emissionsneed to be cut, immediately and considerably, and there is no excuse or notdoing so. As or the decoupling problem, this can be said: most likely the newmainstream technology and market solutions can, i correctly designed, play arole in tackling climate change, but such measures will be insuicient. Indeed,in the long term societal models not based on accumulation will be needed, andthus it will also be necessary to think in non-growth terms.

So the matter is not, whether or not to grow, but how to cease thinking in

terms o growth, whatever normative value it is given. hinking, o course,must also mean political practice. he current model o capitalist growth haslead to a dead end in terms o ecology, social justice and even economic stabil-ity. It simply is no longer credible that human well-being, basic needs, environ-mental sustainability and the like could be addressed with the paradigm o theresource-intensive, accumulation-based economic model. Even less justiied istying the ate o all these to the success o the speculative inancial markets. Weare not merely in a social or ecological crisis, but in a crisis o civilisation andpolitical imagination, and the only way out o the crisis is to seek novel ways toanswer the perennial political problem o achieving lasting human well-being.

Granted, it is never easy to undertake these kinds o intellectual enterprises.Especially when it comes to economic thinking, there are ew alternatives to thegrowth paradigm or the very reason that all economics, despite its dieringschools o thought, consists o attempts to answer the question o how to grow.Especially the let has ound it diicult to deine its relation to Keynesianism.Keynesianism seems to promise reasonable economic equality and inancialstability, along with reasonable possibilities o politically controlling the pro-ductive economy and especially the inancial markets. However, Keynesianismoers little i any criticism o the general presuppositions o economics, which

constitute the very core o thought behind our civilisational crisis. It seems as ieconomics is incompatible with the ways o thought and political organisationwhich would be necessary or paving the way to the uture.

Yet the problem is that no societal order can be based only on external con-straints o social lie, or example the imperatives o climate change. Focusingsolely on these ecological constraints means risking eco-ascism. Alliancesbetween social and ecological demands are necessary, and Keynesian measurescould provide tools in this pursuit. At least, the let needs to show how thingscan be done better. It should not be orgotten that historically most o the lets

demands have been based on increasing consumption or the working class,which is a call or a Keynesian growth model par excellence.


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Consequences of growth

It is worth repeating the undamental let viewpoint on growth: criticism ogrowth cannot be only a material question, but has also to be understood as asocial question. he consequences o taking growth as the priority social goalrequire analyses o the relations between human beings. And, naturally, theseconsequences depend on the social organisation o contemporary societies andalso on ecological extra-societal actors. Let us divide these consequences intothe categories o global outcomes, intergenerational outcomes, the eect on thesocial abric and the undervaluation o externalities.

By global outcomes I mean that as natural resources become scarce, the e-

ects o the growth economy o high-consumption countries are ever moresevere, especially in regions o lower consumption. his phenomenon takesseveral orms: the ever more violent quest or natural resources, the eects oglobal warming, among others. Simultaneously, local attempts o low-incomecountries to promote high growth with a strong export basis and linkage to theglobal economy increasingly take orms opposed to the interests o the poorestresidents o these countries: energy megaprojects causing the displacement opeople in the thousands, land grabs o poor peasants land, urban developmentwhich orces slum dwellers to ever more dangerous locations, and so orth. Inshort, the global outcomes o high-consumption economy go in two dierentorms: irst the unpaid ecological debt displaced onto poorer peoples; second,the growth model and the dictated terms o the global economy, which are verymuch Western-oriented and or which the West thus bears some cultural re-sponsibility, even though the decisions are made in the particular countries. Allin all, taking the necessary step o stressing distributional issues on a nationallevel and also stressing them on a global level leads to a criticism o variousacets o growth orientation.

By intergenerational distribution we o course mean the human toll o theenvironmental crisis. Environmental protection is not, i you ask anyone but

some deep-ecologists, important because o the intrinsic value o nature butbecause o the severe eects on human well-being o ecological changes, interms o scarcity o water, ood, increased diseases, the consequences o un-predictable weather phenomena, and so on. Overconsumption and emissionstoday are a orm o indebting uture generations to the current generation, eventhough this debt will not, and cannot, ever be paid. Intergenerational distribu-tion has sometimes been seen as the most striking argument against capital-ism, as the very oundations o a capitalist economy are based on overusingresources and thus harming uture generations o human beings. An economy

based on even some orm o intergenerational solidarity would have to startrom a completely dierent basis rom that o contemporary capitalism.

Outcomes o the social abric are typical examples o the social consequenceso economic growth. In short, as a sociological notion, economic growth can be


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seen as a process o the constantly occurring isolation and reuniication o in-dividuals in society. In order to become market subjects, people need to adjust

to an atomistic sel-image, yet the promise o the market is always a promise oorming new linkages between human beings. he new communication tech-nologies might be connecting people, but this would be totally unnecessaryi they have not been irst disconnected rom their pre-existing mode o socialcommunication. his does not mean that new orms o social lie would benecessarily worse than previous ones, or even that using such evaluative criteriawould be meaningul at all. What is noteworthy is that growth is always also aname or a social change, and this social change seldom takes places withoutcreating a need or itsel. he emblematic igure o the growth society could be

the computer security expert who releases a virus in order to get employed.Another category o the consequence o growth is the general category o howthe growth society treats externalities. Externalities are a category o sociallyrelevant things external to but necessary or the money economy. For example,the natural commons is necessary to the money economy, but quite oten pol-lution and overuse o the natural commons accompany growth. he processseems positive rom an economic point o view, as the things external to themoney economy have no value which the money economy could take intoaccount. Social commons such as welare services are threatened by growth

aspirations. For example, privatisation o public healthcare leads to generalimpoverishment as user ees are needed to pay or private healthcare, but inthe process the economy grows, since more value is created in the servicesmarket.

O course, commons, even though they provide instructive examples, are arrom being the only relevant externalities. Social externalities have been longnoticed especially by eminist theorists who argue that reproductive and car-ing work typically associated with women usually goes unpaid, even thoughcapitalism could not survive without it. Symptomatically, capitalism could notsurvive i it compensated or the externalities it uses, and or this reason it canbe said to be a parasitic orm o economy. O course, theoretically, the economycould unction without negative outcomes involving externalities, but this canhardly even theoretically be the case in an economy with growth as the priori-tised political objective.

What can be said or a certainty, though, is that economic indicators, such asgrowth, say nothing about several things quite important or good human lieand society. Pollution and reproduction were already mentioned, but there arealso important economic indicators which do not register in growth (distribu-tion, necessities o consumption). Growth also ails to register even classic

measures o well-being (lie expectancy, literacy, saety, etc). Growth meansmerely the increasing value o economic production. Increase in this value canimprove other means o well-being, weaken them or leave them intact. hat isthe point.


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What instead?

So growth is not the answer, but neither is it necessarily the problem in itsel.Rather, it is a somewhat inaccurate statistical tool. he problems arise not romgrowth as such, but rom prioritising growth as a social objective. What doesthis imply or the let? Should it be thinking in terms other than those o eco-nomic growth? What would the alternative vocabulary look like? I not growth/de-growth, then what? In what terms should social progress be measured, igrowth is not to be the yardstick?

ypical, even clichd letist slogans which serve as a starting point or reply-ing to the above question are: (re)localisation o power and the economy, de-

mocratisation o inance and general economic democracy, sel-rule o peoples,centrality o human needs and redistribution beore growth. Generally, thereply to the growth economy ought to be based on a ew undamentals: First,the necessities o lie should be secured or all. Second, the economy ought to beevaluated in terms o qualitative decision-making criteria (democracy, justice)rather than mere quantitative criteria (growth).

When it comes to basic human needs, the market has proven its inabilityto see that even the most basic needs are met or all. here is nothing in themarket system which prioritises basic needs. On the contrary, people can, orexample, preer owning a car or a mobile phone to eating adequately or veryreal reasons, since such goods can become necessities in a society. Naturally,which needs count as basic or are in some way more important than others isopen to deinition, along with the question o whether needs are seen as objec-tive or as changing in within a social process.

Perhaps most important aspect o the redeinition o progress ater the growthparadigm is the idea o economic democracy. his has indeed been a qualitativeaspiration o the let since the 1970s, when Eurocommunists called or speciicmeasures to promote it. Practically, the link between economics and democracyhas several levels. One level is general relocalisation, bringing economic issues

closer to people and their existing mechanisms o local-level decision-making.For instance, local currencies have always been seen as both stabilising anddemocracy-enhancing mechanisms, i not ones boosting the ormal economy.Another level is the state level, in which the state can attempt to take morecontrol o production, along with improving the possibilities citizens have toinluence the unctions o the productive sector via state mechanisms. hestate level includes questions o general democratisation o decision-making ineconomic issues, o which participatory budgeting and social monitoring aregood examples. Last but not least, on the level o inance, economic democracy

has meant calls or nationalisation o banks, taxation on inancial transactions,and so orth.

In these measures, the shortcomings o the Keynesian approach are evident,as the approach ocuses only on the money question, the what, and omits


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the democracy question, the how. And even more generally, the democraticapproach introduces a great qualitative turn, as peoples rule is not really meas-

urable. Naturally, this also implies the impossibility o decisively measuringprogress as deined here. his approach can be seen as a logical continuation oMarxs ideas and demands concerning development, as he deined societal de-

velopment as the expansion o the possibilities people have to rule themselves.It should be realised that any quest or another idea o progress requires a

major shit o the economic agenda and necessarily involves a broad range opolicy questions. When we say another idea o progress, we are calling or aredeinition in the ield o culture, in the uture o capitalism, intergenerational

justice, use o natural resources, ways o meeting human needs, redistribution

o wealth, and so on. Growth as an indicator might seem quite narrow just away o measuring output but politically it is no less than a holistic philosophyo societal progress. he call or another progress has two practical ields o ap-plication. First, as a shit in politics at home, or altering the sel-image o theWest as the locus o progress. Second, as an ideology o liberation or the colo-nised people, meaning more space to think outside the box regarding economicgrowth and the relations o political dominance. As a way o transorming thenotion o progress into a sustainable and equitable one it might be necessary togive totally dierent traditions considerably more voice.

his volume presents several articles by European authors, tackling these is-sues, problems and dilemmas. he main question is: i not growth, then whatinstead?

Elena Papadopolou in her paper points out the urgency o seriously re-evaluating the nature o growth and how and or whom it is pursued. Sheconsequently asks i this means that we should abandon growth, which in thecontext o increasing unemployment, decreasing production and investmentand insecurity generated in the developed world, hunger, incurable diseasesand absolute poverty in the developing world, sounds absurd. Instead, she sug-gests abandoning the prevailing type o growth is exactly what might be at stakein the conjuncture o the current crisis.

Jean-Marie Harribey ocuses similarly on social relations. His main argumentis that the inancial crisis has its roots in the social crisis and in capitalist rela-tions o production. According to Harribey, we need to be aware that only workcreates value, rather than capital or natural resources as such. He demonstratesthe absolute necessity o a thorough-going transormation o the systems opower supply, transport, town planning and housing. his transormation willprobably be spread over several decades, during which considerable invest-ments and reconversions will be needed.

Jose Baum highlights the ecological deadlines aced by the growth society.According to Baums argument, the present ecological crisis is o such sever-ity that the search or political alternatives has to be carried on at every level.hus he reports on the oicial European-level developments in the quest or


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better indicators or societal progress. He shows that the problem o growthhas to some extent reached even top political levels, although results are still

to be seen.Lutz Brangsch is even more critical o the proposed new growth discourses.According to Brangsch, the issue is one o progress: which kind o societalchange ought to count as progress in the irst place? Also, Brangsch argues, weought to look at the social relations behind the growth paradigm, and aim atrethinking these.

Chantal Delmas discusses the link between jobs and growth. In askingwhether this link is a myth or reality, Delmas shows that although there aresome proposals and strategies or ecological improvement, which would allow

or increased employment levels, these cannot come without active politicalintervention. Delmas also analyses some general problems o the GDP as anindicator o societal change, as well as the dierence between the economic andsocial value o certain proessions.

June 2011


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In the context o the ierce economic crisis that has been unolding around theworld since 2008- in dierent orms and with uneven acrimony- the richnesso the debate on issues regarding its causes and consequences (in its multipledimensions) is striking. he critique o the economic orthodoxy o neoliberal-ism that has been dominant since the 1970s both in economic theory and ineconomic policy saw a vigorous resurgence. he ailure o ree-market capi-talism was so obvious that even prominent mainstream economic journalswent so ar as to say that the past 30 years o macroeconomics training at

American and British universities were a costly waste o time (he Economist,July 18th-24th 2009, p.68) and describe leading macroeconomists and inancialeconomists as rational ools (he Economist, July 18th-24th 2009, p.11-anexpression Amartya Sen used to mock the assumption o the rational econom-ic agent in his Critique o the Behavioral Foundations o Economic heory).he crisis has spread rom the inancial to the real economy, to employmentand now to public inances and it has touched every aspect o economic, socialand political lie. In act, as many economists are arguing, it was exactly the(unconditional) bailout policy o many inancial institutions that transormedthe inancial crisis into a severe sovereign debt crisis in Europe, a link which hasoten been observed in economic literature (see or example C. Reinhart, K.Rogo, 2010). hus, ater a short period o return to Keynesianism, withheavy state intervention and demand-side economics temporarily broughtback into the discussion, the same waste-o-time macroeconomics are oncemore in place. It seems, in other words, that the popular question o the pastthree years Where did we go wrong? both in terms o short and medium-term economic policy and regarding the conceptualisation and re-evaluation obasic notions o economic, political, and social organisation disregards thesystemic reasons behind the wrong turn o economic theory and practice.

It is not in the scope o this short essay to review or criticise the policies pursuedduring the dierent phases o the crisis. However, the aim o this brie introduc-tion is to point out the act that a undamental shock to the dominant economicand social paradigm like this brings back to the public (and not merely the aca-

A Note on Economic Growth Seen

Through the Prism of the CrisisNew reality, old paradigm

Elena Papadopoulou


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demic public) a discussion o even basic issues that were long considered re-solved. It is in this sense that the notion o economic growth is approached here:

as a core element o this paradigm that was both endogenously responsible or thereasons lying behind the crisis and endogenously conscripted or its solution.he World Bank deines economic growth as a quantitative change or ex-

pansion in a countrys economy which is conventionally measured asthe percentage increase in gross domestic product (GDP) or gross nationalproduct (GNP) during one year. In other human, or natural capital) or themore intensive use o the same amount o resources more eiciently (produc-tively). [his sentence is incomplete clearly something is missing. What isthe author trying to say?]

It is obvious which issues are implied by this deinition, which reveals themultiplicity and complexity o the questions generated by the contradictions othe dominant perception o growth. he intensive and extensive use o naturalresources, or example, raises the issue o natural limits associated withenvironmental and biodiversity destruction, global warming, the exhaustion onatural resources and so on as current concerns imprinted in the claims o thepeoples climate movement or the de-growth movement. Unortunately,this discussion cannot be taken up in the ramework a short paper like this, as itis related to other controversial discussions like green growth or the so-called

environmental Kuznets curve1

.For the purpose o this paper, it is enough to point out that the urgency o se-riously re-evaluating the nature o growth and how and or whom it is pursuedis strikingly obvious. In order to avoid a ar too ambitious and too general discussion on how growth is perceived and pursued in the context o the WorldBank deinition given above, I will look at a more concrete link (that betweengrowth, inequality and poverty) in order to argue that the reason why growthdoes not serve at least not on its own- to eradicate them is closely related tothe basis o their creation.

hen I will briely review some relevant literature within the dominantneoclassical theory to show that when a causal relation (such as the above-mentioned) is poorly grounded, the goal o tackling eects through an un-convincingly argued cause is not meaningul. hus, inerring that what makeseconomic policies appropriate is whether they promote growth or not, ismisleading. In conclusion I will try to give some explanations as to why growth(as it is currently deined and measured) ails to serve as a means to eradicateinequality and poverty.

1 Tis theory hypothesises that the relationship between economic growth and environmental quality whether inverse or direct is not xed throughout the entire developmental path o a countrys andthat it may change as a country reaches a level o income at which people can demand and aord amore ecient inrastructure and a cleaner environment.


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Growth and the link with inequality and poverty: obfuscatinginductions

In a period o global downturn, the restoration o growth seems to be a goalo major importance. he economic contraction due to the crisis aects alleconomic variables and triggers social and political developments all aroundthe world, which have not yet ully unolded.

hus, it is argued, re-establishing positive growth rates at any cost should bea common-interest eort, a prerequisite or the amelioration o the peoplesstandard o living. his argument or returning to business as usual is typi-cal in most European countries, where the phrase at any cost indicates the

contraction o social protection systems, incomes, pensions and basic workingand social rights as part o a necessary evil in consolidating the economy.What must be asked in this conjuncture is: what is it exactly that we are tryingto restore? In other words, why is the particular content o growth the type oproduction and social relations it creates and is created by not in the com-mon interest?

he emergency o putting the economy back on track once again disre-gards certain important things: 1) that growth (or in this case the restorationo growth) is not an end in itsel; 2) that, contrary to the common wisdom in

the public and the academic debate, growth is neither a suicient condition ortackling urgent and in many cases long-lasting challenges (such as unemploy-ment, inequality, poverty etc.), nor, or that matter, can it substitute or the roleo social policy in these areas.

I will begin by using the analytical tools o neoclassical economic theory inorder to show that, even within this ramework, the relevant literature doesnot conclude that a rising tide lits all boats, or in other words that growth isnot the unique condition which leads to the eradication o poverty or towardsincome equality, even though it oten constitutes the theoretical background oeconomic policy to these ends.

The discussion inside the box

he establishment o a causal link between growth, on the one hand, and in-equality and poverty, on the other, has oten been used to support a basic argu-ment in mainstream economic literature: that the economic beneits o growth(measured as the increase in GDP and irrespective o where it is created) willeventually spread to the whole economy, beneiting all people in all incomegroups. On these grounds, redistribution and social protection mechanismsare discouraged as it is argued that they can play only a short-term equalisationrole, while distorting long-term eiciency. What is more, government inter-

ventions (like social transers and social beneits, unemployment beneits, etc.),


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are seen as creating dependencies and reduce the motivation or participationin the labour market, resulting in ineiciencies and exclusion.

Regarding the relation between growth and inequality, the conventionalwisdom o the 1960s and 70s (ollowing Simon Kuznets theoretical analysis re-garding the so called inverted-U hypothesis between growth and inequality2)was that in the process o economic growth income inequalities will tend todiminish as: 1) the returns to capital all due to the increase o capital accumu-lation, and 2) the pressure or institutional regulations such as the increase otaxation on higher incomes, the decrease o inlation, etc. augment as politicalpower eventually shits rom capital to labour. Later studies develop more argu-ments to support the view that growth is suicient to reduce income inequal-

ity. Some o them mention the all o the interest rate due to the abundance ocredit or the convergence o workers marginal productivities. (As the economyexpands and new technology is used, the small proportion o workers who ini-tially use it have higher marginal productivity and thus higher wages. However,once more workers are acquainted with the new technology and productivitiesconverge, income inequality is reduced as a consequence).

he empirical evidence during the 1980s and aterwards, however, did notconirm the prediction that growth automatically, and in the absence o anyother redistribution mechanism, leads to a decrease o inequality, as they

showed an increase o inequality despite continuing growth. he theoreticalexplanations are varied: on the one hand, it is held that the ree movement ocapital due to globalisation results in the concentration o industrial capital ineconomic areas with a cheap labour orce. As a consequence, de-industrialisa-tion in home countries, and the expansion o their services sector where wagesare lower and income inequalities within the sector are higher, increase totalincome inequality. Another reason is that the increase o a cheap labour orcein developed countries due to economic immigration reduces the negotiatingpower o native workers, decreases salaries and increases inequality.

In a recent study by the Greek Poverty Observatory and the University oAthens3 which used statistical data or the countries o the EU-15, it was oundthat what matters more or the decrease o inequality is the structure o thesocial protection system in the distribution o the product generated in theprocess o economic growth and not growth per se. Moreover, social transersare a quantitatively more important contribution to this goal.

he analysis o the link between growth and relative poverty yields moreor less the same results: the increase o growth is very weak in explaining thedecrease in poverty. What is more, the dominant view in the analysis o inter-

2 Te inverted U-type relationship between growth and inequality means that while in the rst stageso growth, inequality tends to increase, aer a certain turning point this relation is reversed andinequality alls.

3 Papatheodorou C., Daermos Y. (2010), Macroeconomic environment, inequality and poverty, INE-GSEE Studies


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national institutions that poverty should and will be eradicated through theincrease o participation in the labour market is reuted. Even in cases where

employment increases, this does not seem to beneit the poor, as low salariesand the worsening o working conditions (temporary, lexible, precarious em-ployment, etc.) leaves them even more vulnerable. As in the case o inequality,the econometric analyses o the neoclassical model show that growth can onlyexplain a small percentage o changes in the levels o poverty. What betterexplains it, and thus is a more eective policy recommendation within thisramework, are social transers and substantive income redistribution.

wo questions then arise: 1) Is growth simply not enough to conront in-equality and poverty? (or, or that matter, unemployment, social exclusion and

so on)?; 2) Is social policy then enough? In other words, is a critique o whatgrowth (deined in terms o the quantitative change or expansion in a coun-trys economy) doesnt do, helpul in identiying and conronting the core othe problem? he ollowing discussion is intended as at least a partial reply tothis question.

Beyond neoclassical theory and neoliberal policy

Despite the variety o views regarding the causes o the current crisis, not

only among, but within, economic theoretical traditions, all heterodox analy-ses point to a systemic crisis rooted in the inherent tendency o capitalism todepend on its own growth, a type o growth which -- during the period 1970-2008 increased income inequalities and widened the gap between individualconsumption and real wages, which caused the increase o household indebted-ness both in Europe and the US ater the 1970s.

aking this into account, a comprehensive analysis o the our decades thatpreceded the current economic crisis and the reasons behind it would demon-strate that the question asked in the previous section (Is growth not enoughto conront inequality and poverty?) is the wrong one. In a recent book onthe global crisis, S. ombazos points out: he most typical characteristic oextreme capitalism is that the price o economic growth is the stagnation owages vis--vis proits. hus, unemployment and poverty which contributeto the ormation o power relations that keep wages stagnant do not consti-tute a problem or capital, but rather a necessary condition or its regularunctioning.4

hus we come to approach the notion o growth rom a dierent point oview, or, according to the Marxian tradition o the Critique of Political Econo-my growth is actually the extended reproduction o the capitalist relations o

4 .(2010), , 2007, 2008, 2009, p. 87-88, PAPAZI-SIS publications


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exploitation and subordination.5 As David Harvey mentions In The Enigmaof Capital and the Crises of Capitalism even though the aggregate output

as well as the standard o living measured in material goods and services oran expanding number o privileged people has risen signiicantly the situa-tion today may be ar closer than ever beore to that which Marx describedbecause social and class inequalities have deepened.6

Does this imply that we should abandon growth? In the context o increas-ing unemployment, decreasing production and investment and the insecuritygenerated in the developed world, hunger, incurable diseases and absolutepoverty in the developing world, such a suggestion could sound absurd. On thecontrary though, abandoning this type o growth is exactly what can be at issue

in the conjuncture o the current crisis. For this growth cannot especially inthe current conjuncture serve as a goal. hat is to say, what is needed in orderto restore the extended reproduction o capital at this point directly contra-dicts what is needed to reduce unemployment, poverty, inequality, insecurity,increase eective demand and initiate a new virtuous cycle, so that the ormercannot be meaningully used to produce the later.

In the context o our criticism though, the irst thing we need to keep inmind is why the restoration o capitalist growth seems such a reasonable goal:Growth is straightorward, easily understood and perectly aligned with the

philosophy o capitalism. he problems o what should be produced and deter-mining its value are easily solved through the market. When this is assumed,measurement becomes another straightorward and simpliied process in thecontext o which GDP has proved to be an appropriate indicator or manydecades. However, growth is not synonymous with development, nor or thatmatter with progress or well-being. Neither was it meant to be. However, thisassumption is exactly the reason why so many ultimate goals (reducing pov-erty, etc.) are not achieved through it.

However, evaluating human needs and determining what constitutes progressis not a simple task and requires a lot o discussion. he idea o creating aneconomy o needs, where progress and development will be judged on thegrounds o those needs satisaction, has always appealed to the let and rightlyso. However, substituting the market mechanism with the evaluation o privateneeds (public goods are an easier issue) can be very diicult, and while processeslike participatory budgeting are eective at the local level, things are verydierent at the national or the international level. his is not to argue againstthe normative value o the task, but rather to point out the importance o dealingwith the core issue o what goods and services people eel should be produced(be they material things, or, say, research) and how they should be produced

and distributed, as well as the value o the process o evaluation itsel.

5 J. Milios (2005), About the ideology o growth, Theseis, vlo.93, Ocotber-December 20056 D. Harvey, The Enigma of Capital and the Crises of Capitalism, PROFILE BOOKS, 2010, p.46


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he multiple acets o the crisis make the analysis, and especially the strategyand role o the let in society, complicated. he let has to realise that revealing

the vulnerability and sel-destructive dynamics o the system does not automat-ically lead people to engage in collective action or espousing let values; they aremore likely to resort to individualism and traditional conservative values suchas nationalism or religion. In the context o our discussion o growth, the dan-ger o engaging in new types o antagonistic national growth strategies based onthe same long-term promise o enjoying the beneits o new growth generatedater a period o inescapable sacriices points to the need to work towards adierent paradigm on the basis o equality and solidarity o the working peoplearound Europe and around the world, the irst step o which is the demand or

essential redistribution.


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Lets Talk about Money, Value and

Wealth.Jean-Marie Harribey7

here are hardly any socially or ecologically oriented movements or theoreti-cians who do not recognise the global nature o the crisis the world is expe-riencing today. Nevertheless, proposals or getting out o the crisis dierwidely. While unanimously rejecting the headlong rush into more productiv-ism, some support the idea o sustainable development, others reject this ideain its prevailing orm but opt or a radically redeined orm o qualitative devel-opment, and yet others have chosen to support the idea o negative growth.

I have been critical enough elsewhere o the ideas that underlie the notion o

sustainable development as concocted by international bodies and all the estab-lishment authorities. I can, thereore, concentrate here on what I think needsto be speciied: the real contradictions, misunderstandings aside, between theredeinition o qualitative development and the idea o negative growth.

Let us start with an analysis o the crisis, o its issues in terms o social, politi-cal and civilisational contradictions, and try to examine some o the obstaclesto overcoming the blocks that persist at the very heart o these anti-productivistand anti-capitalist trends. his involves the issue o transition to a thrity soci-ety o solidarity and that o conceptions o currency, wealth and value.

In what way is the crisis global?

o put it succinctly, the global character o the crisis is due to three serieso actors, which mutually reinorce one another.8 he crisis is global becauseit involves all the countries o the world and all the main sectors o economicactivity. o this extent it is deeper than the Great Depression o the 1930s, be-cause then only the major centres o capitalist development North Americaand Western Europe were involved. oday, not only the rich countries, butalso the so-called emerging countries, as well as the poor countries, are to vary-

7 http://harribey.u-bordeaux4.r ; http://alternatives-economiques.r/blogs/harribey.8 See Attac (dir. J.M. Harribey et D. Plihon), Sortir de la crise globale, Vers un monde solidaire et

cologique, Paris, La Dcouverte, 2009. (Getting out o the Global Crisis: owards an EcologicalWorld o Solidarity).


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ing degrees involved in this planetary maelstrom. Starting rom the very hearto capitalism, the United States, the crisis very rapidly spread to the riad and

then to the periphery o the system.he crisis is global also because o its systemic character, on many levels. hesystem o inancial accumulation is not sustainable either in terms o wealthsharing or in the prolieration o speculative techniques. he crisis has spreadrom the inancial to the economic, social and ecological levels. Indeed, thesystems logic makes it go beyond the limits o social and ecological bearability.he crisis is also geopolitical, because the balance o power in the world hasevolved and no longer resembles that o the immediate post-war years. Imperi-alism has not changed its nature, but the orms and protagonists have changed.

his crisis is also an intellectual crisis, because neoliberal ideology has lost itslegitimacy: the market, competition, ree trade, laissez-aire and the lure oproit have been shown not to lead to general well-being.

Finally, the crisis is global because it undermines relations between societyand science. Science has been, or several centuries, one o the main pillars oprogress and one o the principal sources o political legitimacy. However, atthe beginning o the 21st century, science has become increasingly subordinatedto the requirements o capitalist economy and, in turn, society has become lessin tune with the deinition and objectives o research.

his multidimensional character becomes more evident i we drop the cur-rent presentation o the crisis as originating in a dysunction o the inancialsystem. In reality, the deepest origin o the crisis is the social crisis. By this Imean the considerable degradation o social relations. he diminution o la-bours share o produced wealth and the dilapidation o public services and osocial protection have nourished inancial incomes. his has encouraged thedevelopment o a rootless inancial machine that has ended up exploding. Inother terms, globalised capitalism is going through a serious structural crisisbecause the intensiication o its logic o proit or unending accumulation hasled it to sacriice the two pillars on which it rests, and which it cannot do with-out: human beings and nature. Andr Gorz already described the structural cri-sis o capitalism in the late 1960s and early 70s in these terms: We are dealingwith a classical crisis o accumulation, complicated by a crisis o reproductiondue, in the last analysis, to the increasing scarcity o natural resources9.

Is this a moral crisis? he generalised deregulation o a system calls intoquestion the values that it thought it could impose on the world as a whole andon every culture, in particular the inancial value it had set up as the sum-mit o all values. Nevertheless, the insistence with which the supporters andprincipal ideologists o the system are determined to moralise capitalism, and

even to radically reorm it, must be questioned. It is, basically, a diversionarystrategy organised by the dominant classes. Looking or a scapegoat when there

9 A. Gorz, Ecologie et politique, Paris, Seuil, 1978, p. 29-35.


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is a threat o social revolt is a classical ploy and there is no lack o candidates:Kervel, Mador and other rogue bosses.

he thesis o voracious inance as opposed to allegedly virtuous industrialcapitalism cannot withstand an even cursory examination. his is because itwas the deterioration in social relations inside the productive economy whiched inancialisation during the last thirty years: less wages and less social pro-tection has meant more proits or the shareholders. In addition, the inancialsphere is a necessary actor in the circulation o capital, which sets workers incompetition with one another, and, inversely, the increase o inancial valuecannot be realised without the productive sphere. he inancialisation o capi-talism has only exacerbated the contradiction between the necessary circuit M-

P-M (money-capital to the process o production to money at a higher level),and the permanent but illusory temptation to avoid this by cutting directly tothe goal (M-M). In the end, any diversionary strategy is an attempt to avoidrevealing the class nature o such a crisis.

Even i there is some basis in describing the crisis as an anthropological one,which inds its origin in human excessiveness,10 in hubris11, this is dangerous. In-deed, i social structures, social relations, their organisation and political choicesare powerless against this universal invariant, every attempt at transorming themwould be in vain. In other words, in place o the linear technical progress leading

to social progress, or o a certain Marxist Messianism requently expounded inthe 20th century, there would be an inalterable curve, an inevitability similar toindividual death. History thus would be impossible. Instead, everything wouldrest with the individual; social transormation could only be shited onto theindividual and collective action would lose all legitimacy.

It would be just as dangerous to locate the origin o all problems at the levelo ideas. Indeed, this is subject o debate in the very heart o the negative growthtrend. In making negative growth a belie, Serge Latouche, reerring to Castori-adis, writes: A programme o national negative growth seems paradoxical. hereis little chance that realistic and reasonable proposals would be carried out, letalone succeed without total subversion. his presupposes changes in belie thatonly the achievement o a ruitul utopia in an autonomous and convivial societycould generate.12 his is as good as saying that the transormation o society isimpossible since it presupposes that the problem has already been resolved. PaulAris is obliged to qualiy the remark: Negative growth is an explosive bomb o

10 Tis is the thesis o J.P. Besset, Comment ne plus tre progressiste sans tre ractionnaire [How toStop Being Progressive Without Being Reactionary], Paris, Fayard, 2005. Voir J.M. Harribey, outecritique radicale est-elle recyclable dans la dcroissance ? (Can all radical criticism be recycled asnegative growth?), Contretemps, n 18, February 2007, p. 142-149, http://harribey.u-bordeaux4.r/

travaux/soutenabilite/cr-aries-besset.pd.11 S. Latouche, Petit trait de la dcroissance sereine (A little treatise on clear negative growth), Paris,

Mille et une nuits, 2007, p.39.12 S. Latouche, Petit trait de la dcroissance sereine,(A little treatise on clear negative growth) op. cit., p.

117.


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a word, aimed at smashing the dominant ideology. Nevertheless, it is not destinedto remain a simple way o decolonising the imagination but must become a real

political project.13 his is, indeed, the problem that society must seize boldly.

Thinking about transition

Where are the points on which the theories o negative growth and those thatcall or a qualitative development dier? It would not be the critique o produc-tivism, even i these theories do not have the same view o the balance betweenthe responsibility incumbent on capitalist accumulation and on human excess,leading them to dierent social and ideological concerns. Nor is one point

the determination to reduce the ecological impact or the rejection o the nowoicially adopted slogans o sustainable development. Similarly, the act thatperpetual negative growth is impossible is now a point shared by all ecologists,whether or not they are supporters o negative growth. We must welcome theact that recent publications have broken with the ambiguities surroundingdemocracy, humanism and human rights,14 values that, today, are ully recog-nised by many ecologists ew still advocate their absolute relativism.

o better characterise the division, it should be stressed that one o the athers onegative growth, Nicholas Georgescu-Roegen, said the exact opposite o what those

who claim to be his ollowers say today, since he distinguished between growthand development: A great conusion permeates the controversies about nega-tive growth simply because this term is used in many senses. A conusion againstwhich Joseph Schumpeter constantly warned the economists, that is o conusinggrowth and development. () At the purely logical level, there is no necessary linkbetween development and growth; development can be conceived without growth.It is through their ailure systematically to make the above distinctions that it hasbeen possible to accuse the deenders o the environment o being enemies o devel-opment. In act the real deence o the environment must be centred on the globalrate o exhaustion o natural resources (and the resulting rate o pollution).15

13 P. Aris, La dcroissance, Un nouveau projet politique, (Negative growth a new political project)Paris, Golias, p. 11.

14 In particular P. Aris, La dcroissance (Negative growth) op. cit., et V. Cheynet, Le choc de la dcr-oissance, Paris, Seuil, 2008. Et S. Latouche, long hesitant about this issue, writes, today : La voie dela dcroissance nest ni moderne, ni anti-moderne. Nous inscrivons pleinement notre projet dans laliation des Lumires, pour le meilleur sinon pour le pire, celui dune mancipation de lhumanitet de la ralisation dune socit autonome. , (Te negative growth way is neither modern nor anti-modern. We see our project to be, or better or worse, a continuation o the Enlightenment, or theemancipation o humanity and the achievement i an autonomous society), in Brves notes pourun ethos de la dcroissance (Short notes or an ethos o negative growth), Entropia, Crise thique,

thique de crise ? (An ethical crisis or an ethic o crisis), n 6, spring 2009, p. 176. We should onlyremark that to locate his ideas as a continuation o the Enlightenment is precisely modern and notneither/nor).

15 N. Georgescu-Roegen, La dcroissance, Entropie, cologie, conomie, Paris, Sang de la terre, 1995, p.104-106.


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However, at this stage in the debate it seems to me more important to stressthe strategic problem acing all the social movements (by which I mean the

movements acting within society, including those speciically ecological) thatare acting in a perspective o transorming society: thinking about the transi-tion or transitions rom an unequal, wasteul, and predatory society to a thrityand protective society o solidarity.

his transition raises, irst o all a problem in relation with time. Indeed, thealternative modes o production and consumption presuppose a deep-seatedtransormation o systems o power supply, transport, town planning andhousing. his transormation will probably be spread over several decades,during which considerable investments and reconversions will be needed. In-

deed, Latouche agrees: ime will be needed to relocate production, exchangesand ways o lie.16 o ensure this transition, I ormerly proposed the ormulao decelerating growth or the richest countries as a irst stage towards theshrinking o predatory production, associated with a air sharing o wealth andgains in productivity,17 that is as a irst stage in dissociating well-being andeconomic growth. his idea was greeted with hostility by those o the negativegrowth tendency,18 but today things seem to be seen dierently, since yester-days sceptics are theorising about the idea o slowing down,19 which, strictlyspeaking, is a synonym o deceleration. he proposal o selective negative

growth20

was more o less identical.One may be surprised by such a harsh opposition and lack o understanding.However, we can hypothesise that, implicitly, the debate on the nature o theorms o wealth to promote and those to reduce had not yet taken place. Fortu-nately, we are no longer discussing whether all production should be reduced,and or every one at that. It is now accepted that this is not the case, but thereis not yet a consensus on the areas o production that should be reduced. hebest example o this is in the area o non-commercial production, essentiallyeducation and health services. Certainly, the ecological impact o education,public health and mass transport, etc. is not negligible. But any reduction ininequality involves, to a great extent, access to all these services. I reductionin their production and consumption, or even putting a ceiling on them, is

16 S. Latouche, Petit trait de la dcroissance sereine, op. cit., (A little treatise on clear negative growth)p. 119.

17 Attac, Le dveloppement a-t-il un avenir ?, op. cit., (Does negative growth have a uture?) p. 156 et205, 217, 218, 219, 220.

18 P. Aris, La dcroissance, op. cit., p. 172 et 285 ; S. Latouche, Le pari de la dcroissance, (Te gambleo negative growth) Paris, Fayard, 2006, p. 34.

19 P. Aris, La dcroissance, p. 310 et 321 ; S. Latouche, Petit trait de la dcroissance sereine, op. cit.,(A little treatise on clear negative growth) p. 57, note 1 et p. 88 et 137 ; V. Cheynet, Le choc de la

dcroissance, (Te impact o negative growth) Paris, Seuil, 2008, p. 101-104.20 J.M. Harribey, Vers une socit conome et solidaire, Dveloppement ne rime pas orcment avec

croissance ,(owards a society o solidarity and thri, Development does not necessarily go togetherwith growth) Le Monde diplomatique, juillet 2004, http://harribey.u-bordeaux4.r/travaux/soutena-bilite/developpement-croissance.pd.


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applied, even in the short term, it would put an end to any hope o invertingthe dominant logic, and would condemn the poor to become even poorer. he

improvement in the quality o non-commercial services implies increasing themeans at their disposal, not reducing them, in view o the dilapidated state inwhich capitalism has let them.

It is not surprising that the discussions o what kinds o production are to beavoured over others lead to the question o work which is another contro-

versial issue within ecological politics. At least three actors need to be clariiedon this subject. he irst relates to the nature o labour in modern societiesand its evolution. I think that work has an anthropological character becausehuman beings must produce the material conditions o their existence and the

social and historic context that shapes it because o this necessity. his leads toan ambivalent situation: work is both a actor o social integration and a actoro alienation. Denying either o these two aspects seems to me to be reductiveand leads to illusions o theory (the end o work) and policy (abandoning ullemployment o higher quality21).

he second point ollows rom the previous one: replacing subsistence in-come by redistribution o work is based on an optical illusion. he guarantee oa decent income or every individual can be justiied politically and philosophi-cally, but it cannot be based on the idea that work is not the origin o all mon-

etary revenue distributed in society. his would mean to reintroduce the mytho the ertility (in terms o economic value) o machines, capital and inance.he third point ollows rom the two preceding ones. A spectre is haunting

capitalism: the spectre o ree availability, said Pierre-Noel Giraud,22 in a goodand heartelt ormula. he renzy in which the hadopi law23 was passed illus-trates it well. Here too, however, the origin o that ree availability must be iden-tiied. One kind o ree availability is a git o nature, which places us under theobligation o protecting public property rom being taken over or irreparablydestroyed. One orm o ree availability is produced because, in certain areas,labour productivity becomes very high and reduces the cost o production toalmost nothing, which obliges us to share the ruit o this productivity with allhuman beings. here is also ree availability that is socially and voluntarily builtby socialising the payment o certain non-commercial services, enabling accessto them by everyone. In these three kinds o ree availability we can see theprincipal aspects o the diicult issue o value, o wealth and their expression,whether in money or not.

21 Voir J.M. Harribey, Lconomie conome,(Te thriy economy) op. cit., and my comments on M.Postones book, emps, travail et domination sociale, (ime, labour and social domination) Paris,Mille et une nuits, 2009 : Ambivalence et dialectique du travail , (Dialectical ambivalence o la-

bour) Contretemps, Nouvelle srie, n 4, 4e trimestre 2009, p. 137-149, http://harribey.u-bordeaux4.r/travaux/valeur/travail-postone.pd. Let me point out that I mean ull employment in overall sense,including paid and unpaid orms o work.

22 P.N. Giraud, Le Monde, 6 mai 2004.23 A law making the downloading o music and lms a criminal oence.


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Thinking about money, value and wealth.

Beyond this discussion on strategy, lies a theoretical point which is interestingto dissect, because it raises the problem o the status o money and the concepto value and wealth. Moreover, this problem is the subject o dissent among thesupporters o negative growth and those o qualitative development.

he conusion between monetary and commercial and between non-mon-etary and non-commercial is recurrent in the critiques o the GDP.24 It canbe ound as much among partisans o economic growth as among those whodespise it. hus the last report o the Economic, Social and EnvironmentalCouncil (CESE) says: Every time an activity passes rom the non-commercial

to the commercial, the GNP increases,25

whereas the monetary aspect o thenon-commercial is included in the GNP. Moreover, the CESE has an ambigu-ous position on leisure, regretting that the GNP takes no account o leisure,that is o moneyless activities.26 Yet, although nothing would be changed bythis addition in terms o well-being (or use values), the Stiglitz-Sen-FitoussiCommission27 has adopted the same stand.

hese mistakes are not harmless, since they demonstrate ignorance aboutmoney. Money is certainly an instrument o the exploitation o labour powerand o private accumulation when used as capital, but also a public tool throughwhich socialised payment or non-commercial services can be organised. Noone pays the medical sta in kind when they are treated in hospital: the healthservice is paid collectively in communal money.28 In other words, both with re-gard to social sustainability and ecological sustainability, the rejection o com-

24 Even A. Gorz, in Ecologica, Paris, Galile, 2008, p. 125, makes this mistake: Le PIB ne connat etne mesure les richesses que si elles ont la orme de marchandises. (Te GNP only recognises andmeasures wealth i it takes the orm o commodities)

25 CESE, Les indicateurs du dveloppement durable et lempreinte cologique , (Te indicators osustainable development and the ecological impact). Dra advice presented by P. Le Clzio, 11 May2009, p. 9, http://www.conseil-economique-et-social.r/rapport/pravi/PA090127.pd.

26 CESE, Les indicateurs du dveloppement durable et lempreinte cologique , op. cit., p. 9 et 62. Fora critique o the integration o leisure in national accounts, see J.M. Harribey, Le temps libre et lanature nont pas de prix (Free time and nature are priceless), in Raconte-moi la crise, (ell me talesabout the crisis) d. Le Bord de leau, 2009.

27 J. Stiglitz., A. Sen, J.P. Fitoussi [2009], Perormances conomiques et progrs social, Richesse desnations et bien-tre des individus, (Economic perormance and social progress, the wealth o nationsand individual wellbeing) volume I, Paris, O. Jacob ; Perormances conomiques et progrs social,Vers de nouveaux systmes de mesure, (Economic perormance and social progress, owards newsystems o measurement) volume II, Paris, O. Jacob ; or a critique see, J.M. Harribey, Richesse :de la mesure la dmesure, examen critique du rapport Stiglitz (Wealth: rom measure to excess,a critical examination o the Stiglitz report) review o Mauss, La gratuit, loge de linestimable, (Gratuitness, In praise o what is priceless) n 35, 1er semestre 2010, p. 63-82, http://harribey.u-

bordeaux4.r/travaux/valeur/stiglitz.pd.28 Tere is no commercial money and non-commercial money despite the idea supported by D.

Baba, Vive la Scu (1), (2) et (3) , La Dcroissance, n 58, 59 et 60, avril, mai et juin 2009. Seehttp://alternatives-economiques.r/blogs/harribey/2009/06/23/la-monnaie-permet-le-non-march-and-paradoxe/#more-26.


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modiication does not necessarily mean the rejection o monetisation. Moneyis a social institution that acts as a social operator or homogenising exchanges

o every kind. Everything is connected: an understanding o the present glo-bal crisis, the nature and status o money, the theory o value and wealth, theconcept o sustainability as an alternative to capitalist accumulation and thedeterioration o planetary ecology.29

Indeed, there is a lack o understanding o the value/wealth dualism withincertain trends o political ecology. In the name o a certain anti-economism, thecategories o the critique o political economy are rejected wrongly, since thetheory o value is not an economic theory but a theory o social relations. In-stead, there appears a neo-physiocratic interpretation that places the source o

value in nature. hus certain works,30

transmitted in France by Yves Cocher,31

have claimed to reute neoclassical theory by proposing a Cobb-Douglas pro-duction actor that includes energy alongside labour and capital. Yet the prin-ciple o introducing this had been raised by the pioneers o models o growthrom the 1950s to the 1970s, in particular by Solow32 and Stiglitz33, with theexplicit aim o introducing the environment in the model o general balance.

Far rom initiating a critique o the dominant economic theory, this intro-duction o the environment in the model o balance perected it as well as il-lustrating its complete dead end: the acceptance o the hypothesis that actors o

production can be mutually substituted; the identiication o the output sharedbetween the owners o alleged actors o production with the productivecontribution o each; the conusion between the context needed or the produc-tion o economic value and the value so created.34 It thus ollows that crediting

29 Another issue that I am not dealing with here concerns what would become o the change in GNP ina non-productivist society. I polluting and predatory production is replaced by a clean and thriyorms o production, this would probably need more labour, both direct and indirect, than theormer. Its value would thus be greater and we cannot know in advance whether the multiplicationo quantities by price would lead to a greater or lesser GNP.. See J.M. Harribey, La richesse toutprix , (Wealth at any price) http://alternatives-economiques.r/blogs/harribey/2009/06/17/la-rich-

esse-a-tout-prix/#more-25.30 R.U. Ayres, wo paragims o production and growth , Fontainebleau, Center or the Managemento Environmental Resources, INSEAD, 2000 ; R.U. Ayres, Te minimum complexity o endegenousgrowth model : the role o physical resource fows , Energy-Te International J., 2001, 26, p. 817-838 ; D. Lindenberger, R. Kmmel, Energy-Dependent Production Functions and the OptimizationModel PRISE o Price-Induced Sectoral Evolution ,Int. J. Applied Termodynamics, Vol 5 (n 3),sept. 2002, p. 101-107, http://theorie.physik.uni-wuerzburg.de/P1/kuemmel/IJA.pd.

31 Y. Cochet, Economie et thermodynamique (Economics and thermodynamics), Cosmopolitiques,n 9, juin 2005, p. 15-30.

32 R. Solow, A contribution to the theory o economic growth , Quarterly Journal o Economics, vol.70, 1956, p. 65-94.

33 J. Stiglitz, Growth with exhaustible natural resources: ecient and optimal growth paths , Review

o Economic Studies, Symposium on the Economics o Exhaustible Resources, Edinburgh, LongmanGroup Limited, vol. 41, 1974, p. 123-137.

34 developed this rather technical arguemnet in J.M. Harribey, La misre de lcologie ,(Te povertyo ecology) Cosmopolitiques, n 10, septembre 2005, p.151-158, http://harribey.u-bordeaux4.r/travaux/soutenabilite/misere-ecologie.pd.


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substitutable actors (the only ones that can supply a mathematical breakdowno the ad hoc rate o variation in order to justiy the distribution o revenues

under capitalism) with the unction o being productive obliges one to abandona crucial aspect o the critique o productivist capitalism. I the complementarycharacter o the inputs is considered, the notion o a limiting actor becomesimperative: nothing is produced i there is no energy, but this does not allow theconclusion that energy produces 100% o the value, or or example, that oil cre-ates more surplus value than labour this is nonsense. It shows the conusionbetween the opportunity or producing surplus value (when oil or any othercommodity is produced) and the actor, that is to say the creator o the valueo this product. It is a matter o logic that does not carry any a priori prescrip-

tive judgement and leaves the door open to the social decision: either to chooseto go still urther orward in productivism or call a stop.Using the notion productivity o resources35 means to accept the neoclassi-

cal concept o the alleged productivity o capital. Only the opposite notions othe intensity o the production o natural resources or o capital have any sense.In other words, the ecologists are right when they stress the positive correla-tion between the increase o GNP and the use o energy and natural resourcesin general, despite dematerialisation relative to the economy and decreasingresource-intensity in production. However, they are wrong when they think

that this correlation can be identiied with the economic value created.As against this, it must be repeated that the nature o use-value is incom-mensurable with economic value: in their natural state, natural resources area orm o wealth, but have no intrinsic monetary value. his thesis underpinsour propositions:1) Natural resources are a orm o wealth.2) hey can only acquire economic value by the operation o human labour

(oil lying at the bottom o oceans has no economic value i it is inacces-sible or i it is not searched or; the eventual monopoly income, i there isappropriation o a resource, is a raction o the social surplus generated byproductive labour).

3) hey do not themselves create value although they are indispensible to theproduction o wealth and new values through labour.

4) I, in the context o human activity or outside use, the choice is made topreserve the balance o ecosystems, it is on behal o values that are not oeconomic but o political or ethical origin.

In conclusion, since the concepts o wealth and value, imposed by capital-ism, are at the very heart o the global crisis it is going through, the ends olabour, the sharing o wealth and the appropriation o nature should be called

to question. It is to this necessary triple revolution that the proposals o reduc-ing inequality, reducing working hours and de-commercialising society reer,

35 CESE, Les indicateurs du dveloppement durable et lempreinte cologique , op. cit., p. 15 et 25.


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expressed in very close and complementary terms by Marx and Polanyi36.hese I consider to be alternatives at the present time to the general slogan o

negative economic growth.Finally is could well prove impossible to emerge rom the crisis withoutemerging rom the capitalist system which, or the irst time in history, hasplaced societies close to limits, the overstepping o which could be atal. huswe should not just repeat the old plan, which moreover ailed, o emergingrom capitalism while satisying ourselves with changing the owners o prop-erty. hat is where the real diiculty lies: the capital/labour relations continueto structure the world, but all the orms o domination are not reduced to these.All in all, reasons to think o articulating anthropological, social and natural

matters.

36 K. Polanyi, La grande transormation, Aux origines politiques et conomiques de notre temps, (Tegreat transormation: on the political and economic origins o our times), 1944, Paris, Gallimard,1983.


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hose attempting to guide the economy and our societies are like pilotssteering a course without a reliable compass. he decisions they (and weas individual citizens) make depend on what we measure, how good our mea-surements are and how well our measures are understood.37

Every day, every hour, we hear the mantra o growth solving almost all prob-lems. On the other hand, we see the destructive implications o the presentgrowth model, such as oil spill catastrophes. What then is the solution: growth,degrowth or something else?

here have been conerences on de-growth in some countries (or example,a large one in France 2008, in January 2010 in London and Vienna, February2010 in Italy and March 2010 in Barcelona). At these conerences there weresome very interesting ideas, worthy o discussion. Yet a general eature o al-most all contributions is the absence o analysis o ownership structure, capitalaccumulation and o the proit incentive generally.

What should grow?

he history o discussing growth rom a socio-ecological point o view goesback at least 30 years. Walter Hollitscher, an Austrian materialist philosophermaintained, in discussions occurring in the late 1970s, that the only thingwhich should deinitely grow is the satisaction o needs. Basically, rom asocio-ecological point o view the question o growth or de-growth is simple:there cannot be a yes or no answer. Some lows, stock, and activities shouldgrow; others should not grow but decrease, or example, the production oweapons.

It does not seem useul to use de-growth without indicating what should

decrease, because the general use o the notion de-growth easily can easily37 Commission on the Measurement o Economic Perormance and Social Progress: Report by the

Commission on the Measurement o Economic Perormance and Social Progress. http://www.stiglitz-sen-toussi.r/en/index.htm September 14th 2009, p.9

In Search for a (New) Compass

How to Measure Social Progress,Wealth and Sustainability?

Josef Baum


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also be understood as an undierentiated attack on the standard o living andlivelihood o many groups o people, especially broad low-income sectors o

society. But i we go into details beyond yes and no then the matter quicklybecomes diicult because o the measurement problem. More in depth, themeasurement concepts are deined by the power o ruling orces and relect theactual driving orces o our societies.

Growth, de-growth or what else?

Measurement and action are strongly connected. But when measurementsare lawed, decisions may be too: We oten draw inerences about what are

good policies by looking at what policies have promoted economic growth; buti our metrics o perormance are lawed, so too may be the inerences that wedraw.38

It is a act that despite the clear expounding, or decades now, o the aultsand shortcomings o the GDP as a measurement, the latter remains almostunchallenged outside some small circles o academics; evidently because it isserving the interests o capital accumulation with the proit incentive, whichshapes the overall monetarisation (and commodiication things become com-modities, are bought and sold, within capital accumulation). But to a certain

degree regulation can inluence this basic structure.here are two main conceptual areas lacking in mainstream concepts oGDP: the area o social issues and that o ecological issues). here has beensome experience with supplementing these ields. But primarily it is not a mat-ter o technical measurement, at least not primarily. It is the question o thelack o a basis in the analysis or long-term development. It has long been clearthat GDP is an inadequate metric to gauge well-being over time particularly inits economic, environmental, and social dimensions, some aspects o which areoten reerred to as sustainability.39

he problems o growth are not only ecological questions; the (socio)-ecological dimension is also central not only because o the quality o lie butbecause o the uture o mankind. What is here called measurement problemrelects the necessity to deine the agenda: what should grow/develop? Howcan we measure and analyse this?

For the positive alternative the use o sustainability seems, despite its am-biguity, to be adequate although up to now this keyword has been usable inthe broad political sphere, since no better alternatives are in sight, and roma political viewpoint the uzziness o the notion can be a useul umbrella or

various movements.

38 Commission on the Measurement o Economic Perormance and Social Progress: Report by theCommission on the Measurement o Economic Perormance and Social Progress. http://www.stiglitz-sen-toussi.r/en/index.htm September 14th 2009, p.7

39 Commission on the Measurement , p.8


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Basic factors profit as the driving force

he most important driving orce is the process o capital accumulationwith the proit incentive, which shapes the overall evaluation by monetarisa-tion (and commodiication). he GDP relects transactions on markets.40 hedominant driving orce o transactions on industrial markets is proit on capitaland reproduction or accumulation o capital. An average proit rate is usuallytaken or the discount rate or the evaluation o uture values and uture loss.Giving more weight to uture values would imply lower proit rates. So someshareholders are not interested in the relativisation o markets.

he central point is the tackling o capital accumulation. here are many argu-

ments that capital accumulation as we know it is not compatible with sustainability,and that green capitalism will not be easible. But we should be careul: capitalismas a long-existing system has been very lexible. Yet the answer can only be a proba-bilistic one. And to a certain degree regulation can inluence this basic structure.

he link o jobs and growth is practically the most important. Generally, itdepends on the balance o power and the concrete orm o transition. In gener-al, a sustainable approach is less resource intensive and more labour intensive.One illustration: i the transport system is shited rom cars to more environ-mentally riendly trains and buses then this is more labour intensive becausemuch o the private driving time is replaced by public jobs. But the quality andwage rate o these jobs are not pre-determined but are a result o struggle.

o the question o liestyle: It should be stressed that needs are shaped anddeveloped to a large degree by marketing and advertisement. he huge expens-es o big companies are oten underestimated in their relevance, not only orthe shaping o needs but also or the domination over small and medium enter-prises, or example by branding. As an implication or policy, high taxation oadvertisement or non-local marketing should be stressed as a irst step.

So rom a let point o view short-term proposals should be made or the transi-tion and also or measurement concepts, which are to be connected to incentives

or individuals, companies and public institutions. hese transitional proposalsshould be in the direction o long-term alternatives with probably completelynew systems o driving orces, measurement o wealth and incentives.

So at least 3 tasks are on the agenda: o evaluate the current paradigm o growth o oer short-term proposals o ormulate long-term alternatives (here there are good intentions, but

very little substance)

40 As statisticians and economists know very well, GDP mainly measures market production ex-pressed in money units. Commission on the Measurement o Economic Perormance and SocialProgress: Report by the Commission on the Measurement o Economic Perormance and SocialProgress. http://www.stiglitz-sen-toussi.r/en/index.htm September 14th 2009, p.12


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New fundamentals for the left

he situation is aggravated by the necessity or rational and rapid action to aceclimate change challenges and to have a compass or this huge endeavour.he new, special and undamental story which the let oten has not ully

grasped until now though or some years it has been completely evident isthat climate change imposes deadlines. In short, the overwhelming scientiicconsensus is that that a global increase o more than 2 % Celsius is threateningthe oundations o civilisation, and that to avoid this development it is necessaryto reduce the use o ossil energy by 80 % by 2050 globally. Because o the historicuse o resources by industrial countries and the level o development achieved by

this use, a air global solution and only a air solution will be a easible solu-tion implies a reduction o the use o ossil energy by 80 95 % by 2050. I onecalculates this in annual rates this entails a tremendous challenge unlike anythingso ar seen in history and it is very doubtul that the capitalist system can meetthis challenge. he problem is worsening because every day not used to eect thechange urther increases the problem. Evidently, with Copenhagen and the latestdevelopments in the USA, with the sharp reinorcement o the positions o theclimate sceptics, windows o opportunity are being closed or years to come,and they can only be opened again through strong social movements.

o be still more precise: o achieve the 2 % Celsius target and not exceedthresholds there is only a deinite and limited quantity o greenhouse gases thatcan still be emitted; and these greenhouse gases that may still be created areadmissible i resulting rom the process o developing, rebuilding and renew-ing all inrastructure, energy production, construction, and transportation in alow-carbon-technology mode. his task is thereore not a task o years but odecades. he task o reaching the 2 % Celsius target will be successul i we donot waste this remaining amount but use it or a socio-ecological transition.

But lets also see it positively: he chances are great that it will become evidentor broad masses that only by (global) airness and justice the bases o civilisa-

tion can be preserved. he myths o capitalism will probably be destroyed byincreasing consciousness o the climate mess. (Already in the heart o inancialcapitalism even Sir Stern declared in the amous Stern Report: Climate changeis the greatest market ailure the world has ever seen.) And the principle o(global) solidarity as a prerequisite o necessary global solutions will be put onthe agenda (and this has been, is and will be the agenda o the let).

New developments in mainstream policy and institutions

Recently in Europe some important milestones were reached ater yearso discussion: On November 20, 2007 there was a seminal broad conerence41

41 http://www.beyond-gdp.eu/


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which established a new scale or the discourse on measuring wealth and sus-tainability. he conerence Beyond GDP Measuring Progress, rue Wealth,

and the Well-Being o Nations was directly supported by the EU, the Europe-an Parliament and OECD. Prepared with papers rom a lot o organisations andinstitutions, high-ranking stakeholders, up the to President o the Commissiono the EU, were active participants.

he Communication rom the European Commission on GDP and Beyondwas published on August 20, 2009.42 Analysing the document, there is some (albeitlimited) concrete progress especially in the creation o a new comprehensive envi-ronmental index (but only published annually). Many shortcomings o GDP arenoticed. But the strict domination o the GDP remains in EU policy. At any rate,

the statistical work is a precondition or better measurement o (un)sustainability.his will be improved, and other gradual steps require urther discussion.

Five actions to better measure progress in a changing world43 are proposed: Complementing GDP with environmental and social indicators; Near real-time inormation or decision-making; More accurate reporting on distribution and inequalities; Developing a European Sustainable Development Scoreboard; Extending National Accounts to relect environmental and social issues.

Although at the above-mentioned conerence there were also discussions oideas on Replacing GDP, the decision is now clear. For many years to come,GDP will have a very important unction. he reason given or complement-ing GDP: Gross Domestic Product (GDP) is a powerul and widely acceptedindicator or monitoring short to medium term luctuations in economic ac-tivity, notably in the current recession. For all o its shortcomings, it is still thebest single measure o how the market economy is perorming. But GDP is notmeant to be an accurate gauge o longer term economic and social progress,nor [o] the ability o a society to tackle issues such as climate change, resourceeiciency or social inclusion.44

he most important measure proposed under Complementing GDPseems to be the development and implementation o a comprehensive en-

vironmental index or helping to oster a more balanced public debate onsocietal objectives and progress. Alternative candidates or such a purpose, like

42 Commission o the European Communities: Communication From the Commission to the Counciland the European Parliament GDP and beyond Measuring progress in a changing world. Brus-sels, COM(2009) 433 nal 20.8.2009

43 Commission o the European Communities: Communication From the Commission to the Council

and the European Parliament GDP and beyond Measuring progress in a changing world. Brus-sels, COM(2009) 433 nal 20.8.2009

44 Commission o the European Communities: Communication From the Commission to the Counciland the European Parliament GDP and beyond Measuring progress in a changing world. Brus-sels, COM(2009) 433 nal 20.8.2009

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