The degrowth movement which is highly critical of the growth-oriented socio-economic system provides alternatives for transitioning to a new system that puts sustainability and equality at its centre.
With its provocative name, the phenomenon of degrowth has been heavily criticised by many economists on the ground that it is too radical. On the other hand, it reminds many people of a return to the simpler times. However, as social inequalities are increasingly becoming visible and we are experiencing the deepest economic recession since the Second World War, we need to be open to alternatives more than ever.
The World Health Organisation (WHO) declared Covid-19 a worldwide pandemic in 2020 as it was spreading around the world rapidly after the first cases were seen in China in 2019. In the first half of 2020, more than 9 million infections and nearly half a million deaths were reported. Meanwhile, the global health and economic crises indicated our failure to establish sustainable systems for the majority of people.
The degrowth movement, which is highly critical of the growth-oriented socio-economic system, provides alternatives for transitioning to a new system that puts sustainability and equality at its centre. As we are pondering the social, political, and economic impacts of this global health crisis, these alternatives offer intriguing tips on how to create a better world for different actors in the society including the business world. The degrowth movement has been trying to find the answers to the following questions for more than ten years:
In this S360 short articles series, we are investigating the degrowth movement to find answers to these questions.
We live in a system that evaluates the degree of national development by looking at per capita income. We are used to hearing from politicians, business leaders, and economists that a bigger economy achieved by the increase in GDP (Gross Domestic Product) is always the best. That is why many people connote the improvement in welfare with economic growth. In this sense, “development” and “economic growth” are given the same value. Thus, people conclude that policies which allow economic growth are always beneficial for everyone.
The relationship between welfare and economic growth has been getting criticised more and more with the increase of studies that identify the negative impacts of economic growth. With the publication of “The Limits to Growth” in 1972, which caused a big effect by modelling the costs of growth for the first time, the phenomenon of continuous growth within a limited world has been increasingly getting criticised.
According to the calculations we are experiencing extreme weather conditions on a wider scale and the climate crisis frequently reminds us that we are approaching the limits of our planet. For example, from 1880 when we first started to keep a record, the hottest five years have been recorded since 2015. According to the report prepared by the Intergovernmental Panel on Climate Change (IPCC), if greenhouse gas emissions continued at their current pace, we would spend the entire carbon emission limiting budget we have in less than 8 years to limit global warming at 1.5°C.
Many studies argue that the most effective way to control carbon emissions is to decrease consumption, which is one of the most important components of economic growth. For example, the outcomes of the most extensive analysis of the food system’s impact on the environment argue that the consumption of meat must be decreased in the most affluent countries to prevent climate change.
Studies indicate that in a scenario where everyone consumes as much as a person who leads an average life in the United States, we would need 4 more worlds. In fighting climate change, the attention is focused on limiting consumption and fuel production to decrease carbon emissions and provide environmental justice.
The outcomes of the studies that focus on the relationship between economic growth and inequality indicate that the benefits brought by economic growth have not been distributed equally. Despite the increase in productivity since the 1980s, workers’ wages have not grown at all and the working hours have not decreased. Thus, the economic share of wages has been decreasing while wage inequality has been increasing. Within the last 25 years, the income of the richest 1% is increased more than the total income of the poorest 50%. Moreover, nearly half of the total income increase has been transferred to the richest 10%. This situation shows that although we produce more than ever, social inequalities skyrocketed as 7 people out of 10 live in a country where economic inequalities have been increasing for the last 30 years.
There is a negative psychological impact of economic growth and consumption-oriented system alongside their ecological costs. A number of studies show that status anxiety, long working hours, and better performance pressure causes stress, sleep disturbances, fatigue and mental illness. According to the WHO data, the rate of depression and anxiety disorders increased by 54% and 42% respectively, between the years 1990 and 2013. Nowadays, it is estimated that around 700 million people worldwide have a mental illness. It is indicated that economic growth over a certain threshold does not increase happiness as expected. Studies conducted in countries where the basic needs are met prove that happiness level is independent of national income.
This is explained by the fact that the satisfaction we feel decreases over time as we adapt to the material improvements in our lives. In other words, the pleasure we get for a short and temporary period leads to wanting more, and thus making us work harder towards reaching a temporary state of happiness. This cycle causes growth to never actually be “enough” for anyone. But income and financial standards are still important factors for happiness. In particular, having a job is one of the most important factors contributing to happiness. However, what is emphasized by the studies is that the financial gains we achieve after a certain point when our basic needs are met do not contribute to the satisfaction we get in the long run. Studies on this subject reveal that what matters most for our psychological well-being is our relative income level, not absolute.
Therefore, how much income we earn in relation to other people is more important to us rather than the amount of income we earn. The outcomes of a study conducted with 200 different data sets over the period of 30 years reveal that what increases social welfare after reaching a certain level of national income is not economic growth but equality.
Seeing to what extent the benefits of economic growth are shared equally and what kind of costs it creates brings up the question of how desirable economic growth is when considering a different future. Questioning these, the degrowth movement opposes economic growth becoming a goal rather than a tool and the assumption that economic growth is always better. The movement, which was first mentioned in French sources in 1972 and officially named degrowth with the Degrowth Conference that took place in Paris after the 2008 crisis, has gained popularity over the years, especially in academic and activist circles. With the increase in the discussions around the subject in the last 10 years, the concept of degrowth has also diversified and ceased to be a singular concept by being fed by many different trends.
It is argued that the scale of production and consumption should be reduced voluntarily and fairly in a system where human well-being and ecological sustainability are centralized and secured. Thus, a roadmap can be drawn where welfare and happiness are targeted by reducing economic footprint.
Supporters of the movement stress that the obsession with consumption and growth must be abandoned in the first place. The focus of political efforts should be to improve human well-being in harmony with the planet, not economic growth.
The degrowth movement, which proposes a socially egalitarian and ecologically sustainable society, does not have a strict and predetermined plan, and it is claimed that the egalitarian and participatory nature of the movement comes from this principle. For this reason, it is not possible to say that there is a consensus on every issue regarding the policies and strategies the alternative order will embrace, but five strategies that are generally accepted within the movement stand out.
The degrowth movement's initial goal on the transformational path is to abandon the use of GDP as a measure of development and welfare.
It is heavily emphasized by both current and critical economic theories that GDP is an indicator with low explanatory power. GDP, which we started to use as an indicator for the economic recovery of countries in the Second World War period, is suitable for understanding that we have achieved some goals, but it cannot provide an adequate and accurate calculation for other goals.
One of the shortcomings of GDP is that it does not distinguish between “good” and “bad” economic effects when calculating the value of changes in goods and services in a country during the year. For example, cutting down trees to obtain timber or drilling mountains to get coal causes GDP to increase. For this reason, this indicator is widely criticized for not taking environmental and social costs into account, and this deficiency can have even more devastating consequences in this timeframe in which we have little and limited time to control the climate crisis.
In addition to excluding environmental degradations as "externalities", inequality in the country does not affect GDP. For example, a rich country where 10% of the population controls 75% of the total wealth ranks higher than a country with a more even wealth distribution and relatively lower income.
Domestic care labour, whose monetary value reaches $10.8 trillion annually, is not included in the GDP calculations. Also, many fields such as health, clean air, gender equality and education, which are seen as critical for the welfare of a country, are ignored.
The degrowth movement states that instead of GDP, we should start using different indicators that include ecological limits and equality as a country's welfare indicator.
We already have such indicators. The most popular and the most common is the Human Development Index (HDI), developed by the United Nations (UN). Developed in 1990, the HDI includes factors such as life expectancy, inequality and education as well as income. Therefore, although Norway ranks 10th and the USA 11th in the GDP table, they rank in the 2nd and 24th place in the HDI index, respectively.
In addition, another tool recommended by supporters of the degrowth movement is the Genuine Progress Indicator (GPI). While this indicator includes all factors included in GDP, it also takes into account environmental and social factors that have been excluded. For example, activities that cause environmental degradation or an increase in the poverty rate causes the GPI to decrease.
According to degrowth, it is not rational for all sectors to grow continuously, given ecological limits and human development. For this reason, it is emphasized that a distinction should be made between the sectors that need to grow and shrink, and investment decisions should be made accordingly. It is recommended that after a democratic re-evaluation of the factors that we think are critical for well-being, production/consumption, growth in sectors that harm the environment (such as the fossil fuel industries, mining and advertising sector that leads to mass consumption) should be slowed and sectors that increase human welfare (education, health, renewable energy, etc.) should be developed further.
This degrowth strategy is becoming more relevant today with the coronavirus pandemic putting the sectors that are essential to society's functioning in the spotlight. The devastating effects of many people's lack of access to security, shelter and health care reveal that we need to build a system that better meets our basic needs.
The economic growth paradigm we live in is based on the principle of the "trickledown effect". According to this paradigm, the increase in the wealth of the rich in society reaches the poorer segments over time and benefits everyone. In short, wealthy individuals create more growth and job opportunities by spending more, thus increasing living standards. This situation was made possible by reducing the amount of tax levied on wealthy individuals and encouraging more investment.
In response to this understanding, degrowth supporters argue that in many countries where these policies are implemented, the gap between the rich and the poor has widened. So, there is no such effect as advocated. Furthermore, they point out that we already have the necessary resources to create a better world.
At this point, it is proposed to redistribute income and wealth both within and between countries, with the idea that a more equal distribution will increase social welfare. Calculations show that redistributing only 7% of the wealth held by the richest 10% globally can solve the entire problem of poverty in the world.
The degrowth movement opposes the trickledown hypothesis with political and economic tools to help redistribute excess income and wealth. The most prominent among these is the universal basic income, which is given to every individual or household without any conditionality. The word universal here is used not globally, but in the broadest sense to include all citizens. Progressive taxation practices are also encouraged, in which large amounts of income and wealth are taxed more.
The concept of degrowth argues that the environmental impact of human activities must be reduced to achieve environmental sustainability without exceeding the limits of the planet. For this reason, the protection of biodiversity, reduction of unnecessary consumption as well as travel (for example, using trains instead of aeroplanes in domestic travel and close distances), and transition to a sustainable and local food production system come to the fore.
Studies demonstrating that disruptions in natural wildlife areas increase the likelihood of viruses being transmitted from animals to humans, show the vital importance of preserving biodiversity for all living things during the recovery period after the coronavirus pandemic. It emphasizes the importance of localizing production in the transformation process and building resilience through transparency by shortening supply chains. The coronavirus outbreak and the measures taken have also brought the vulnerability of supply chains to the surface, increasing the emphasis on resilience. There is an increasing expectation that the business world will take more responsibility in realizing and supporting more local, sustainable, and small production alternatives.
Democracy and participatory decision-making mechanisms take place in every aspect of the transformation process. In other words, which sectors need to grow or shrink or what kind of basic income program will be implemented depends on the decisions taken by the actors democratically in this process. Arguing that people should have a say in the decisions that affect their own lives, degrowth emphasizes that especially excluded groups in society should be included in this process.
Global carbon emissions fell to levels not seen since 2006, with reduced traffic around the world and many factories shutting down production due to COVID-19 measures. Global carbon emission levels were measured 17% lower in April than in the same period last year.
Although the estimates for total emissions in 2020 differ depending on the tightness of the measures to be implemented in the rest of the year to contain the virus, a decrease of 5.7% is expected according to the International Monetary Fund (IMF) calculations.
However, given that emissions have returned to pre-pandemic levels with the easing of measures in many countries and that the gases that cause climate change have been accumulating in the atmosphere for centuries, for many researchers this rate reveals how inadequate short-term behavioural changes are to prevent the climate crisis.
From an economic point of view, the contraction in per capita income in the world has occurred in the largest number of countries since 1870. The publication prepared by the World Bank predicts a 5.2% decrease in global GDP in 2020.
This can lead to confusion between "not growing" and the current forced economic downturn. Supporters of the movement underlined that this situation is not degrowth. However, some authors may misread this process as the “realization of the dream of degrowth”. As in the 2008 crisis, supporters emphasize that degrowth is not equal to GDP reduction in a growth-oriented economy by stating "Their recession is not our degrowth!".
Degrowth argues that this transformation should take place in line with the willingness of the people in a democratic way. Second, it requires a long-term commitment to reducing production and consumption and reorganizing society more equitably. Finally, it is emphasized that justice and equality lie at the centre of the transformation led by degrowth, given that COVID-19 affects the vulnerable segments of the society significantly. At this point, degrowth supporters emphasize that the political-economic system we live in has not responded to the crisis in a just and humane way.
In short, the supporters of the movement state that the situation we are in is not a state of degrowth, but by showing that our current way of life is unsustainable and fragile, it reveals why we need degrowth more.
Degrowth can create a negative perception for most people, because why would people want to downsize? Some of the writers who defend what the movement has to offer but say that this negative framing is an obstacle to the movement's progress, suggest a name change to reach wider audiences.
However, most degrowth supporters state that this provocative name was chosen deliberately. Although the strategies proposed by degrowth on how we can achieve collective welfare are rapidly accepted in certain academic and activist circles, it is also acknowledged by the supporters of the movement that it is difficult to be accepted by society in general, especially by the powerful sections of society. This raises the question of whether degrowth is a politically accessible system or an utopia. Degrowth activists believe that it is inevitable that the minority group holding power will oppose an order in which their power is distributed.
In response to this emphasis on the impossibility of the acceptance of degrowth, degrowth supporters argue that in the reality of the climate crisis it is more impossible to pursue unlimited growth. While they state that we have all the resources we need to combat the climate crisis, they underline that no miracle is needed to reduce the amount of carbon in the atmosphere, and they add: We know greenhouse gases and how to fight them, we just do not have the political or economic will to take these steps.
The fact that the degrowth movement does not have a clear plan for the system that will exist as a result of the transformation, raises questions about what exactly will be implemented and its applicability. For this reason, degrowth advocates, who are criticized for drawing an ambiguous framework, argue that a movement whose future will be shaped by participatory democratic process cannot be far from ambiguity.
Degrowth raises questions in terms of its economic consequences as well as its political feasibility. One of the most asked questions is how to create jobs without economic growth. Degrowth supporters emphasize the sectors that will develop, reduction of working hours and job sharing. In addition, what will happen to inflation with the implementation of universal basic income and how people's desire to produce will be affected by these changes are among the most discussed points.
In developing countries, where many people still do not have access to basic services, there are different opinions on whether to implement degrowth, because economic growth is crucial for these countries. On the other hand, the number of academic studies modelling strategies on possible paths to degrowth, focusing around the areas such as how many hours we should work per week, amount of carbon tax, basic income level, taxation rates, etc. are increasing rapidly.
Especially with the COVID-19 pandemic, the intertwining of economic, ecological and social crises revealed how inadequate it would be to address the post-crisis recovery process only from an economic perspective.
While this indicates that we need to act quickly to build a more sustainable system in every sense, some of the country/institution-based examples we share below signal that this change has already begun.
• The National Happiness Index (GNH) used in Bhutan: The National Happiness Index, was introduced in 2008 after the rejection of the use of GDP as the sole indicator of development. It is calculated based on nine different variables, including standard of living, health, ecological diversity, and resilience.
• China announced that it will not set a GDP target for 2020: With the decision announced in May as a result of the effects of the coronavirus pandemic, government officials stated that they will give priority to strengthening employment and raising living standards. This is a first since the GDP target was announced in 1990.
• Welfare budgets are used in New Zealand, Scotland and Iceland: The prime ministers of these three countries have called for new social indicators to be taken into account alongside GDP in recent years, emphasizing that the main aim of the policies is to increase the collective welfare. In this direction, the welfare budget plan designed in 2019 aims to increase the welfare of all citizens with a limited budget.
• The majority in England supports the implementation of basic income: According to the results of a YouGov survey published in April 2020, basic income, which is one of the main policy tools for degrowth, is supported by 51% while job guarantee is supported by 72%.
• Germany is one step closer to basic income: In 2020, the German government approved a package that will allow non-employed citizens to receive monthly support of €300 indefinitely.
• The results of the Finnish basic income experiment revealed positive effects: The first results of the pilot application, which was implemented in 2017-2018, showed that the individuals in the group who accessed the basic income contribution felt more economically secure than those who did not, and their psychological well-being and life satisfaction increased. In addition, employment rates also increased, albeit slightly, compared to the other group.
• Spain uses the basic income application to alleviate the effects of COVID-19: In Spain, which was heavily affected by the coronavirus pandemic, it was announced in May that 2.3 million citizens who had difficulties in this process would be given a monthly basic income of 1.015 Euros per household.
Many companies include the climate crisis in their future planning & call for support:
• More than 200 leading UK companies and investors are urging the government to present a COVID-19 recovery plan that prioritizes the environment and addresses the climate crisis.
• More than 100 companies, including companies such as H&M, Ikea, Unilever, and Danone, have signed the Green Recovery Alliance, which requests the government to develop a "new model of welfare" based on sustainability and biodiversity conservation after COVID-19. All of these companies have emission reduction targets or plans.
• Finally, a growing number of companies, including Southern Company, Total and Shell, are committed or planning to achieve net zero emissions in their operations by 2050.
Sustainable investment practices are getting stronger:
• ESG investments, where environmental, social and managerial factors are taken into account, draw attention with their above-average performance at a time when COVID-19 has devastating effects on economies. This situation is seen as an indication that ESG investments, which have been increasing in recent years, will keep increasing and become more important as they prove their resilience in the face of the crisis.
Many governments are adopting green practices during the recovery period:
• In May, the European Commission presented a recovery package doubling its commitment to the Green New Deal.
• In April, the Mayor of Amsterdam announced that the city's post-coronavirus recovery will adopt the "Donut Economy" model, which offers a framework in which ecological boundaries and Sustainable Development Goals (SDGs) are included.
• In Milan and many states of the USA, steps have been taken to reserve some of the roads for cycling and walking to reduce car use and thus pollution in the post-COVID-19 period.
• The French government has made Air France's borrowing conditional on a massive reduction in emissions by 2030. In addition, it was stated that the company will reduce flights, especially in domestic distances that can be reached by train.
• Call for degrowth from 1,100 academics: In a letter published in May, 1,100 academics from more than 60 countries called for a transition to a degrowth economy in the post-COVID-19 restructuring. For this aim, they published 5 different principles that should be adopted to create a more equal society.
• Call for degrowth from 170 scientists in the Netherlands: In April, 170 scientists published a manifesto of 5 critical degrowth strategies, urging the government to adopt a more radical sustainable approach during the recovery period.
• The Hawaiian government presented a “feminist plan for economic recovery”: Offering propositions such as a universal basic income and free daycare, the plan states that there should be an opportunity to establish a system that can achieve gender equality in the post-COVID-19 period by targeting “deep cultural change”.
Despite the disaster scenarios we often face, it is up to us to imagine the world we want to live in. Changing and transforming starts with dreaming. Building a more sustainable world is becoming more and more people's dream.
The roadmaps for how we can achieve this are taking shape day by day. Thus, change begins. At this point, the business world, governments and international organizations play a big role. With the devastating effects of the crisis over the coronavirus pandemic, more and more people are calling on competent actors to take action for transformation. And these calls seem to have begun to find answers with the seeds of transformation, which we have given examples of above.
The seeds of transformation are thus planted, and what we will do in this process determines whether these seeds will sprout or not. Whether degrowth is seen as a dream or as a realistic alternative, the fundamental questions it raises provide great insights into what purpose we should pursue in this process. However, the answers given by degrowth to these questions provide an important framework regarding how it is possible to build a different world after the crisis.
Prepared by: Tuğçe Kılıç
Contributions: Simge Aydın, Seza Eraydın, Asya Saydam
Design: Volkan Babaotu
August 2020
References
Büchs, M., & Koch, M. (2018). Challenges for the degrowth transition: The debate about wellbeing. Futures.
Bivens, J. ve Mishel, L. (2015). Understanding the Historic Divergence Between Productivity and a Typical Worker’s Pay. Economic Policy Institute.
Center for Sustainable Systems. (2019). U.S. Environmental Footprint Factsheet. University of Michigan. Pub. No. CSS08-08.
Credit Suisse, (2015). Global Wealth Report 2015. (Zurich).
Demaria, F. (2013). What is Degrowth? From an Activist Slogan to a Social Movement. Environmental Values 22, 191–215.
D'Alisa, G., Demaria, F., & Kallis, G. (2020). Küçülme: Yeni bir çağ için kavram dağarcığı. İstanbul: Metis Yayıncılık.
Easterlin, R.A., McVey, L.A., Switek, M., Sawangfa, O., Zweig,J.S. (2010). The happiness– income paradox revisited.Proceedings of the National Academy of Sciences 107,22463–22468.
Erickson, P., Lazarus, M., & Piggot , G. (2018). Limiting fossil fuel production as the next big step in climate policy. Nature Climate Change 8, 1037–1043.
Hardoon, D., Fuentes-Nieva, R. ve Ayele, S. (2016). An Economy for the 1%: How privilege and power in the economy drive extreme inequality and how this can be stopped, Oxfam.
Hickel, J. (2017). The Divide: A Brief Guide to Global Inequality and its Solutions.
IPCC. (2018). Global Warming of 1.5°C, Special Report
Jeffries, B. (2020). The Loss of Nature and Rise of Pandemics:Protecting Human and Planetary Health. WWF International.
Kallis, G., Kerschner, C., & Alier, J. (2012). The economics of degrowth. Ecological Economics.
Kallis, G. (2011). In defence of degrowth. Ecological Economics 70, 873–880.
Kallis, G., Sekulova, F., & Schneider, F. (2017). Climate change, happiness and income from a degrowth perspective. Handbook on growth and sustainability içinde. 160-180.
Lawson, M., Harvey, R., Coffey, C., vd. (2020). Time to care. Oxfam International.
Piketty, T., & Saez, E. (2014). Inequality in the long run. Science, 344(6186), 838–843
Sachs, W. (2009). The Development Dictionary. New York: Zed Books.
Springmann, M., Clark, M., Mason-D’Croz, D., vd. (2018). Options for keeping the food system within environmental limits. Nature 562, 519–525.
Wilkinson, R. Ve K. Pickett. (2009) The Spirit Level: Why Greater EqualityMakes Societies Stronger, New York, Berlin, Londra: Bloomsbury Press.
World Economic Forum. (2020). The Global Risks Report 2020.
