The growth-driven economic model we have adopted is killing our planet.
Politicians rise and fall on their ability to grow the GDP. It doesn’t matter what it takes, whether it’s ripping up environmental protections, gutting labour laws, or fracking for cheap oil: If you achieve growth, you win.
This is only the beginning. As we bump up against the limits of growth – market saturation, resource depletion, climate change – politicians will become increasingly aggressive in their pursuit of it. People like Trump will proliferate because everyone knows that we need growth: if the economy doesn’t keep expanding by at least two percent or three percent a year in developed countries, it collapses into crisis. Debts can’t be repaid, firms go bust, people lose their jobs.
The global economy has been designed in such a way that it needs to grow just to stay afloat. We are all hostages to growth, and hostages to those who promise it.
This is a massive problem because growth is tightly linked to environmental degradation. Growth of three percent may not sound like much, but it means doubling the size of the economy every 20 years – doubling the number of cars, smartphones, air miles… i.e. doubling the waste. Scientists tell us that we have already exceeded key planetary boundaries, and we can see the consequences all around us: deforestation, biodiversity collapse, resource wars and climate change.
The good news is that it doesn’t have to be this way. We can choose to create an economy that doesn’t require endless growth and thus take the wind out of the sails of politicians like Trump. In fact, it’s already happening: scholars and activists around the world are building the foundations for post-growth economics.
The first step is to challenge the myth that growth is required by society. Economists and politicians tell us that we need growth in order to boost people out of poverty. But of all the new income generated by growth, only five percent goes to the poorest 60 percent of humanity. Growth is an extremely inefficient and ecologically insane way of improving people’s lives. We can end poverty much more quickly, without any growth at all, simply by distributing existing income more fairly.
This is the core principle of a post-growth economy: Equity is the antidote to growth. There are lots of ideas about how to get there. We could introduce a global minimum wage and strengthen international labour laws. We could put a maximum cap on income and wealth. We could encourage and even subsidise worker-owned cooperatives so wealth and power are distributed more equally.
But we also need to do something about our structural dependence on growth.
For example, capitalism has a built-in incentive to increase labour productivity – to squeeze more value out of workers’ time. But as productivity improves, workers get laid off and unemployment rises. To solve this crisis, governments have to find ways to generate more growth to create more jobs.
There are proven ways to escape this vicious cycle. We could introduce a shorter working week as Sweden has just done, sharing necessary labour so that everyone can have access to employment without the need for perpetual growth. Or we could ease off on the labour requirement altogether by rolling out a universal basic income,funded by progressive taxes on carbon, resource-extraction, and financial transactions.
I think that the best starting place is your other article pointing out fractional reserve lending as the driver of economic growth and the need to eliminate it. As a plus I notice that many on the right (zerohedge types especially) loathe fractional reserve lending. Focusing effort on eliminating FRL could actually unite people in a common effort. The right-leaning people wouldn’t be for doing away with the current banking system for saving the planet, but rather for saving our posterity from the debt, and that’s fine!