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„Beyond Growth“: State of the Art and Perspectives

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On May 15-17, 2023 a remarkable conference took place at the European Parliament (EP): “Beyond Growth. Pathways towards Sustainable Prosperity in the EU”. Under the leadership of MEP and conference organizer, Philippe Lamberts (Greens/EFA), with the support and contributions from the Commission (Ursula von der Leyen and commissioners) a high-level program was presented, including many of the relevant contributors to the global degrowth and postgrowth debate. More than thousand participants gathered in the EP (many more online), significantly younger than the MEPs who usually occupy the seats. The density of presentations and the atmosphere where overwhelming – some said the “Woodstock of Degrowth”. It is not possible to summarize all this in a short article and this is not intended here. More important is the question of learnings and perspectives.  

Most important is the diagnosis, which is shared by the large majority of participants: Green Growth is not a solution, it rather is (macro-economic) greenwashing. This has been (again) perfectly summarized e.g. by Timothée Parrique: decoupling of GDP and resource consumption would have to be absolute (not just relative), at a much higher speed (e.g. tripling of decarbonization rate); speed would have to be maintained long-term (not just for a few years), has to include all material and energy flows (not just focus on one emission) and cover all regions (leakage problem). Therefore, decoupling is a theoretical possibility but with very low probability. Serious policy related to the survival of mankind should not be based on this one option only. However and despite of clear empirical evidence, economic mainstream is still following the Green Growth promise – and this includes the EU Green Deal as well as most of the Green parties (e.g. in Germany).  

Is the insufficiency of Green Growth a reason for cheering (or even for standing ovations)? No, definitely not, especially for two reasons:  

  • Obviously, we face hard choices – harder than perceived so far. Low-hanging-fruits and easy techno-fix will not do the job. All of us will be affected by unavoidable behavioural changes and will feel the pains. “Harmony” and “win-win” are no longer overall valid narratives. Reality is more about trade-offs and conflicts: It is growth or climate, growth or biodiversity, growth or resource conservation.  
  • Not many (potential) allies share this diagnosis, even less will join the public debate on consequences and actively communicate that consumers in the rich world will have to reduce their level of consumption (advocate for sufficiency, degrowth). For many, this still is “inconvenient truth” (Al Gore 2006).  

Beyond the Anti-Growth and Anti-Green-Growth consensus, the problems begin – with many diverging and inconsistent ideas, enriched but not much different from the situation 50 years ago. There is still no alternative to the growth paradigm available which could guide through two decades of transformation and provide an attractive postgrowth (steady state) perspective. All kinds of storytelling (“narratives”) are sometimes inspiring but not adequate substitutes for a new paradigm. The deficits of our economic systems in coping with the ecological challenges go along with other long-standing systemic deficits:  

  • Justice: increasing concentration of incomes and wealth. 
  • Competition: increasingly dominated by large players (who also transform economic into political power). 
  • Stability, resistance: development of market-based systems is and will be characterized by cyclical fluctuations (boom, crisis; inflation, unemployment). 
  • Government: all economic systems are mixed systems; no market economy could exist without government. The core contradiction is, that on the one hand more and more government intervention and “risk sharing” is needed and on the other hand the willingness to pay taxes and to accept regulations is declining.  

Clearly, “system change”, one of the favourite phrases at the conference, is necessary and unavoidable. The question is: what has to (be) change(d) and what has to be conserved (rules, institutions). The focus must be on social innovation and (increasingly) on crisis management (adaptation). Definitely, the stress factors will increase – and economic growth as “social mollifier” will no longer be available. Under stress (Greta Thunberg: “panic”), the probability of false decisions increases. Some of such (potentially) harmful pathway decisions have also played a vital role in the conference and would need some more critical reflections, e.g.:  

  • Redistribution of income and wealth: Incomes and consumption of the rich (the 1%?) with the largest footprints have to be reduced (e.g. by rationing). This could cure injustice and environmental problems at the same time (win-win?). However, the potential side effects should also be considered (on investment, innovation, jobs). 
  • Measurement myth: Positioning the GDP indicator at the core of the postgrowth debate would be a mistake. There have been legends of publications that demonstrate the limitations of this indicator and the necessity to end its dominating role in policy making. However, the political debate should be about the priorities in policy making. Once they change (e.g. to welfare), additional indicators (already in use e.g. in the UN SDG context) will play the key role.  
  • Role of markets and profits: Abolish market solutions (cooperation instead of competition) in combination with eliminating the profit motive and prices as allocation mechanism would cause significant disruption and not support transformation by design. Would democratic decision making on production (what, how, for whom) by basic-democratic councils and committees more efficiently serve the common good (Gemeinwohl) and how long would it take until such a radical system change delivers (ecological, social) results? 
  • Extended role of government: There is a wide spectrum of additional functions which government should fulfil – from industrial policy, i.e. the closer cooperation with large corporations on the one hand to fostering of SMEs, start-ups and the informal sector. In sharp contrast are the weak performance and the limits of government (bureaucracy, cronyism, capturing). Financing is a problem as the economy is not growing and some countries are already close to limits of taxes and contributions (social safety system). More government debt is not a solution; if the economy does no longer grow, interest payments would overburden the next generation(s).  

In sum, there is a real danger that some of these ideas or all of them in combination would create additional socio-economic problems and hence transformation obstacles. In addition, there is little chance to find democratic majorities for many of the proposals. So, this could be a program for self-marginalisation.  

This brings us to the more difficult question, what than could be some of the top priorities of a postgrowth, sustainability policy? 

  • Get the priorities right, foster and keep up attention for the existential ecological threats (regular disasters will support this effort). Refocus debate on welfare: It is not just income (GDP) that matters; additional sources of wellbeing are e.g. justice, safety, access, leisure.  
  • Correction of expectations: Prepare consumers and voters for a future of “less” not “more”. There is no chance for a restauration of growth (the old normal). This is really bad news for a consumption-addicted society. But acceptance is crucial for resilience of the democratic system. 
  • As burdens for all will increase, just burden sharing will become more important – and must be organized by government. Safety for vulnerable groups combined with significantly higher taxes for the upper income segments. This is necessary for justice reasons but also for revenues. Additional government invest for mitigation and for adaptation has to be financed by the living generation(s) – not passed on to the next generation(s). Global burden sharing will challenge the rich nations on various dimensions: more support for the South (loss & damages, compensations), plus higher world market prices of resources.  
  • Strengthen and wisely expand government’s role, e.g. rule setting, invest in public goods, industrial policies while at the same time reducing subsidies and bureaucracy.  
  • In sum, refocus policy: Instead of growth policy (supply-side policies from Thatcher to Reagan and to Kohl) a broad-based welfare and sustainability (sufficiency) policy needs to be implemented. This is certainly ambitious, but it is not beyond the learning capabilities of all democratic parties – and the unions.  

A new and significant change in the global framework conditions has been hardly mentioned and analysed at the Conference (with the exemption of Olivia Lazard): war and re-armament. War in the Ukraine (Zeitenwende 24.02.2022) together with China’s expansion has started a new age of (military) confrontation and of system competition. As a consequence, the peace dividend is lost and replaced by “war taxes”. In addition, the globalization dividend (efficiency and scale effects, resource exploitation) will be lost. Both will significantly reduce private consumption – and the willingness to invest in mitigation efforts. A worst-case scenario would have to include: Climate change and military conflicts trigger migration waves of unknown size – with strict(er) border controls and “infrastructure” (fences, walls).  

In sum, the unfavourable geopolitical conditions create new pressure on growth dynamics. Growth, especially military production capacity, is key for success and survival in the (cold) war of systems. The survival mode could rather be growth-restauration than degrowth – with all the well-known, ecologically disastrous consequences. Behind the war of systems is the war against nature – which eventually will be lost.  

An overall evaluation of the Conference should not focus on academic standards (only) but also assess the political impact. Many of the academic aspects have been covered by the OECD report “Beyond Growth” (2020, see https://www.postwachstum.de/author/rudi-kurz-und-angelika-zahrnt). One political insight might be that relevant parts of the young generation are lost for the growth promises. This is also a source of hope, as they are seriously searching for alternatives – under conditions which are so much more difficult than fifty years ago, when the Woodstock-generation started its search and embarked on a joyful journey – with so little success. Friends of the Earth Germany (BUND) has extensively worked and published on postgrowth perspectives and will continue to inform and to convince in times of emergency.  

Rudi Kurz war bis 2017 Professor für Volkswirtschaftslehre an der Hochschule Pforzheim. Seine Forschungsschwerpunkte sind Ordnungspolitik, Innovationsforschung, Wirtschaftswachstum, Umweltökonomie und Nachhaltige Entwicklung. Ehrenamtlich engagiert er sich beim Bund für Umwelt und Naturschutz Deutschland (BUND) als Sprecher des Arbeitskreises Wirtschaft und Finanzen.

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