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The Urgent Case for Shrinking the Economy

Endless growth is destroying the planet. We know how to stop it.

In July 1979, shortly after installing a set of solar panels over the West Wing, Jimmy Carter did something peculiar for a peacetime president. He asked Americans to sacrifice: to consume less, take public transit more, value community over material things, and buy bonds to fund domestic energy development, including solar. From our vantage, this may sound very farsighted and bold. But any prescient, planet-saving leadership seen shimmering through hindsight is a mirage. The speech and the panels advanced a program with the narrow goal of energy independence, not decarbonization. Carter wanted to expand and secure the nation’s economic wheel beyond OPEC’s reach, not question it, shrink it, slow it, or “green” it. “We have more oil in our shale alone than several Saudi Arabias [and] more coal than any nation on earth,” he boasted in the speech. “We have the national will to win this war.”

Less Is More: How Degrowth Will Save the World
by Jason Hickel
Penguin, 336 pp., $28.95

It’s a different event, buried in the Carter record, that offers a flash of the ecological vision often falsely ascribed to the ’79 energy plan. On the afternoon of March 22, 1977, between meetings with the prime minister of Japan and the National Security Council, Carter sat down in the Oval Office with a British-German economist named E.F. Schumacher. Four years earlier, Schumacher had achieved international fame as the author of Small Is Beautiful, a trenchant critique of the spiritual poverty and delusional frameworks of mainstream economics. His White House visit made him the most radical guest of a sitting president since Warren G. Harding requested an audience with Eugene V. Debs.

Next to Schumacher’s “Buddhist economics,” Debsian socialism was reformist tinkering. Schumacher didn’t see liberation as a matter of reshuffling the ownership and management structures of the smokestack-powered growth economy. He believed a deeper transformation was needed to maintain a livable planet. This would require new socioecological blueprints “designed for permanence.” As the left and the right battled for control over growth’s levers and spoils, Schumacher pointed out how both had become blind to the rise of growth as its own self-justifying, pan-ideological religion; its patterns of production and consumption, he observed, required “a degree of violence” that did not “fit into the laws of the universe.” Schumacher was not alone in his concern. Starting in 1970, a group of system dynamics scientists at M.I.T. began feeding data into a supercomputer to examine where humanity was headed if it continued to consume energy and materials, and to create waste, unabated. They determined that infinite growth was, in fact, impossible on a finite planet. Barring a major course correction, the team projected, growthism would result in an ecological systems breakdown sometime in the middle of the twenty-first century.

This warning, detailed in the 1972 bestseller The Limits to Growth, has aged better than the scorn heaped on it by two generations of pro-growth economists and pundits. We are now witnessing what appears to be the beginnings of the collapse predicted nearly 50 years ago. Yet critics of growth have achieved only a tenuous foothold in an increasingly dire debate over how to maintain the conditions for civilization in an age of climate emergency. In his new book, Less Is More, Jason Hickel, an anthropologist and journalist, attempts to bring a comprehensive critique of growth closer to the center of the conversation, arguing through a sweeping history of capitalism that it’s uncontrolled growth, not its controlled arrest and reversal, that is the preposterous concept.

The idea of limitless growth is a relatively recent one. In Less Is More, Hickel traces its origins to the enclosure of the European commons in the sixteenth century. Between roughly 1350 and 1550, the free peasants of Europe had organized subsistence agrarian societies that shared and managed resources—such as fuel, food, and building materials—taken from the common land. This did not sit well with the nobles, who grumbled that “servants are now masters and masters servants.” When elites began to enclose the common land, it triggered peasant rebellions that were violently suppressed, followed by what Hickel describes as a “humanitarian catastrophe”: Starving refugees were scattered and forced into a new economy defined by neo-feudal servitude and wage labor. Landowners, meanwhile, began amassing great stores of surplus wealth.

This economic and political revolution was reinforced by a complementary scientific one that displaced the lingering animist cosmology of pre-capitalist Europe. The dualism of Francis Bacon and Descartes held reason to be distinct from and superior to matter. As the sole possessor of mind, humanity was elevated above and cast in opposition to everything else on the planet. The pagan-agrarian understanding of the natural world as a nurturing mother gave way to Bacon’s view of nature as “a common harlot.” This way of thinking, Hickel argues, also encouraged European colonists to treat the non-Christian inhabitants of the New World not as human beings, but as resources to be exploited, whose enslavement in silver and gold mines fueled a second wave of capital accumulation. Descartes’s mechanical philosophy and theory of matter “was an explicit attempt to disenchant the world,” writes Hickel:

Once nature was an object ... whatever ethical constraints remained against possession and extraction had been removed…. Land became property. Living beings became things. Ecosystems became resources.

By the mid-1800s, a new “science” had arisen from these assumptions. Neoclassical economics fully abstracted the economy from the natural world. The economy was geared not toward the creation of a happy and prosperous society, but toward the perpetual growth of wealth as its own end, achieved in an inherently virtuous cycle of converting labor and resources into capital, to be accumulated and reinvested in faster and more productive conversions of labor and resources. This ideology subsumed and profaned notions about progress and morality held by the classical economists, until eventually the field even lacked words for noneconomic considerations, let alone ends. From being a sign of God’s approval, Growth became God, a new deity for the new species called Homo economicus.

This process unfolded despite repeated warnings along the way. Classical economists like John Stuart Mill and, to a lesser extent, Adam Smith not only acknowledged the existence of natural limits to growth, but saw economic development as a phase; at some point, they believed, nations would create enough wealth to pursue other definitions of progress. Not even John Maynard Keynes, the quintessential modern growth economist, believed in infinite economic expansion for its own sake.

Hickel punctuates his history of growth with the caveats issued by Simon Kuznets, father of the concept adopted in the twentieth century as growth’s universal and signature metric: gross domestic product. Kuznets, Hickel points out, “warned that we should never use GDP as a normal measure of economic progress,” because GDP does not distinguish between productive and destructive behavior. A measure of an economy’s total consumer and government spending, investments, exports, and imports, it institutionalized the celebration of a soulless and dangerously incomplete ledger. “If you cut down a forest for timber, GDP goes up,” Hickel writes. “If you extend the working day and push back retirement age, GDP goes up. If pollution causes hospital visits to rise, GDP goes up. But GDP includes no cost accounting. It says nothing about the loss of the forest as a habitat for wildlife, or as a sink for emissions.” GDP also ignores the existence of unpaid labor—like child-rearing or caring for a sick relative—a fact that explains why feminist economists were some of the earliest and most astute critics of the metric.

Most people encounter the growth debate, if they encounter it at all, through the idea of “green growth.” This is a vision for our collective future based on the belief that technological advance will drastically reduce the amount of raw materials needed to sustain growth—a process known as dematerialization—and “decouple” growing GDP from its ecological impacts. As proof that this is not only possible but already happening, boosters of the idea point to the transition by rich countries from manufacturing to service-based economies, as well as efficiency gains in energy and in the use of materials. The process that replaced letters with email, and compact discs with digital files, will continue until we live in a spectral economy where little at all is manufactured or transported, save those things that can be pulled from thin air by, one presumes, solar-powered 3-D printers.

The belief that green growth will save us, also known as “ecomodernism” or “ecopragmatism,” has become a trendy article of faith among elites who acknowledge climate change and the dangers of breaching ecological boundaries. In 2017, Barack Obama threw his support behind the idea in an article for Science magazine, maintaining that signs of decoupling in major economies “should put to rest the argument that combatting climate change requires accepting lower growth or a lower standard of living.”

The argument that capitalism can grow itself out of the present crisis may be soothing to those who like the world as it is. It also relies on the kind of accounting tricks and rejection of reality more closely associated with Obama’s successor. As Hickel points out, the argument for decoupling requires counting only those emissions released within national borders, and not those further upstream in the global production chains. By only counting the emissions created within a country that imports most of its cars, washing machines, and computers, you end up pushing the emissions related to their production off the books. When you factor them back in, the picture is much less green. A number of recent studies show no evidence of meaningful decoupling—in energy or materials—even as the world increases its use of renewable energy and finds ways to use some materials more efficiently.

The problem, Hickel argues, is explained by the “paradox” first observed by the nineteenth-century economist William Stanley Jevons: In a growth system, gains in efficiency do not translate to higher wages, greater equality, more leisure, or lower emissions; they are plowed right back into the growth cycle. A classic example of this dynamic is the advent of the chain saw. A person with a chain saw can cut 10 times as many trees in the same time as a person using older methods. Logging companies did not use this invention, however, to shorten the workweek by 90 percent. They used it to cut 10 times more trees than they otherwise would have. “Lashed by the growth imperative, technology is used not to do the same amount of stuff in less time, but rather to do more stuff in the same amount of time,” Hickel writes. “In a system where technological innovation is leveraged to expand extraction and production, it makes little sense to hope that yet more technological innovation will somehow magically do the opposite.”

The dynamic helps explain what is happening in the energy sector. Increasing outputs of wind, solar, and other renewables are not leading to a drop in the use of fossil fuels. Instead, renewables and fossil fuels are used to satisfy rising global energy demand. “New fuels aren’t replacing the older ones,” Hickel writes. “They are being added on top of them.”

Green growth, Hickel concludes, is an ecologically incoherent “fairy tale.” If this seems harsh, consider what the ecomodernist position asks us to believe. The current system requires annual growth of roughly 3 percent to avoid the shock of recession. This means doubling the size of the economy every 23 years. The economy of 2000 must be 20 times larger in the year 2100, and 370 times larger in the year 2200. The green growth position rests on the assumption that this can go on, basically forever, because innovation will “dematerialize” the economy. Yet 2000 was the first year that, according to experts, humanity used more energy and materials than the safe limit. And the growth economy, far from dematerializing, remains geared toward expanding future markets for extremely materials-heavy products like Tesla cybertrucks and Apple iPhones. Comparing this to a fairy tale is, if anything, too generous, since children’s stories usually involve some kind of moral lesson applicable to the real world.

The economy that Hickel envisions would cease to pursue growth, green or otherwise. Materials and energy will still be consumed, and waste generated, but at much lower levels. All impacts on the natural world will be tethered to the question, “Growth for whom, and to what ends?” In place of an individualistic consumer economy, Hickel’s post-growth economy would direct itself toward the creation of public goods that allow the many to live well—mass transit, health care—rather than to keep a few in luxury. In a word that never appears in the book: ecosocialism. Hickel is less interested in the macroeconomic details of this future than are growth critics based in economics departments, like Tim Jackson and Kate Raworth, and more focused on the leisure, security, and general human flourishing that he believes will follow from unshackling the economy from the growth imperative. That this will happen, Hickel has no doubts, and he makes an alluring case that degrowth does not require anything like the “command-and-control fiasco of the Soviet Union, or some back-to-the-caves, hair-shirted disaster of voluntary impoverishment.”

Ecomodernists huff loudly at claims that any kind of economic downshift—planned or unplanned—can result in anything but a drastic deterioration in human welfare. The evidence may suggest they are wrong. A growing body of research reveals an inverse relationship between “happiness” and growth beyond a certain point. In the rich countries, general contentment peaked in 1950, when GDP and real per capita incomes were fractions of their present size (and inequality near modern historic lows); degrowthers posit that similar happiness levels will be reclaimed on the way back down the economic mountain. Hickel describes a post-growth economy defined by stability and equality, and the freedom and leisure possible when the economy is no longer subservient to the god of growth. He estimates that the U.S. economy could be scaled down by as much as 65 percent while still improving the lives of its citizens. This includes the metric most often tied to celebrations of endless growth: life expectancy.

Attaining the benefits of the post-growth economy would, however, require what the present consumer society considers “sacrifices.” Even as polls show majorities around the world growing skeptical of capitalism, it’s not clear how many of them are ready to give up its superficial pleasures enabled by consumer debt. When Hickel turns to the details of this trade-off, he can sound hesitant. His list of economic sectors that are incompatible with growth focuses on “fossil fuels, private jets, arms and SUVs.” Letting go of these things would not necessarily prove a great imposition on the day-to-day lives of most people. At other points in the book, he comes closer to the truth: that degrowth will entail a steep reduction across a much wider range of high-energy consumer goods. Keeping a global economy within safe ecological limits is a zero-sum game. When limited resources are directed toward clean energy infrastructure, public health care, and regenerative agriculture, it will still be possible to build and power modern 24-hour hospitals in every city, but not to have Xbox consoles, two-car garages, and giant appliances in every home. The post-growth economy could not succeed solely by redistributing wealth; it would have to redefine it, too.

Among nations, there’s also the question of fairness: Wouldn’t it be unjust to impose degrowth across the world, when it’s disproportionately the countries of the global north that have spent centuries burning through the planet’s resources? Hickel, whose first book examined the deepening inequality between north and south, has thought about this. He argues that short-term growth would have to continue in those countries that have still not achieved the basic levels of sanitation, infrastructure, and education needed for a decent standard of living, to close the gap. Their larger goal, meanwhile, would be to break free from their historical role as a source of natural resources and cheap labor for the north. As they built sustainable economies on their own terms, they would bring about the end of a 500-year cycle of dependence based on the same extractive industries that provide raw materials for the growth economy that is destroying the planet.

For degrowth to be just, global, and effective, the sharpest reduction in consumption will have to come from the north, where the greatest damage to the planet is currently being done. One person in a low-income country has a materials footprint of roughly two tons per year, a measure of total raw materials consumed, including those embodied in imports. In lower-middle–income countries, that number is four tons; in upper-middle–income countries, 12 tons. In the high-income nations of North America, Europe, and Asia, the number leaps to 28. Ecological economists generally agree that the safe outer limit is eight tons.

The gap between nations only gets more extreme when you move from materials to emissions. The wealthiest 20 percent of the human population is responsible for 90 percent of “overshoot” carbon in the atmosphere (that is, a level of carbon that exceeds the limit needed to keep global temperature rise below 2 degrees Celsius). The planet’s richest one percent has a carbon footprint twice the size of the poorest half of the world’s population combined. This output tracks to the one percent’s share of global wealth—a number equal to the GDP of the bottom 169 countries. For the global north, degrowth not only starts at home, it starts with the biggest houses.

Even if you accept the argument that inequality would be best addressed by more centuries of trickle-down growth, you keep running up against the simple fact of its impossibility. Even just one more century of growth—which so far has shown no sign of taking a less destructive form—will require multiple earths. This is the neatest explanation for why Eric Schmidt, Elon Musk, and Jeff Bezos have invested in interplanetary colonization and asteroid mining. They know we can obey laws of the universe or the laws of growth, but not both.

Defenders of growth often take cheap shots at degrowthers by painting them as anti-science, anti-progress, and all around a bit woo-woo. But the targets of these attacks are straw men, and emerge from a dangerously outdated view of the world. For starters, there was never any basis for the materialist view of nature as an all-you-can-eat buffet of inert “resources.” A number of discoveries across the life and physical sciences have revealed the astounding complexity and cooperation of the systems that support life, from the trillions of microbes that process food in our guts, to planet-scale systems that regulate chemical balances in the atmosphere and oceans. In every field—except, notably, economics—the worldview that allows trees to be seen as timber, and timber as a contributor to GDP, has been overtaken by a second scientific revolution. The picture of the world to emerge from this revolution is both more fragile and more interrelated than the equations found in modern economics textbooks can describe.

Less Is More doesn’t end in a poetic appreciation for nature’s majesty, but by teasing out its implications for the political project of preserving a habitable planet. Hickel devotes much of the book to explaining that degrowth must be central to this project, promising not just survival, but real democracy, social abundance, and liberation. In a welcome departure from much of the literature on degrowth, Hickel is serious about bringing the system critiques of E.F. Schumacher and others out of their traditional cloisters and into the streets, and has sought allies in this effort. The preface to his book is written by Kofi Klu and Rupert Read, two campaign organizers with Extinction Rebellion, a group that through direct action and agitation opposes climate change and the loss of ecosystems and species. They emphasize what Hickel calls the “beautiful coincidence” of degrowth: that “what we need to do to survive is the same as what we need to do to have better lives.”

This beautiful coincidence overlaps with policy programs like the Green New Deal in important ways, even if they aren’t always discussed. Both share the immediate goal of a post-carbon economy. Both involve broad social shifts away from private consumption and toward the production of shared public goods. Both are internationalist in outlook, and see the world through a lens of climate justice as well as climate equilibrium. Both require political alliances and social movements that hinge on connecting the dots between radical system change and self-interest—that is, communicating the many benefits of moving beyond the insecurity and terrors of the current system, and building a new society that is sustainable, stable, democratic, and fundamentally better in every way.

While degrowthers and those narrowly focused on rapid decarbonization have their differences, the overlap is a good place to start. Systems scientists and ecological economists have been warning for decades that degrowth is not a political decision that can be put off indefinitely, but a matter of throughput math and physics. The choice before us is the form we will allow degrowth to take—humane and controlled collective action and transformation, or chaotic civilizational tailspin, crash, and ruin.