August 10, 2022

Postgrowth mindset

Mainstream politics has long proved resistant to the arguments of those who question the pursuit of unending economic growth. CUSP researcher Richard McNeill Douglas suggests a treatment. (This blog first appeared in The Mint magazine, July 2022).

Blog by RICHARD McNEILL DOUGLAS

Stairs to Nowhere. Image: The Vessel, New York. Photo: courtesy of Kai Dörner / unsplash.com

It is fifty years since the original Limits to Growth report brought home the truth that indefinite growth is impossible on a finite planet. But in that time growth has remained the goal at the heart of government policy, in the UK as elsewhere. The question for those who understand the need for change remains the same: how do you break through this denialism in mainstream politics?

One suggestion is to frame the environmentalist argument around the need to wean public policy off its growth dependency—see arguments by Tim Jackson, a range of heterodox economists, and organisations such as Positive Money. At its heart this argument suggests that an end to economic growth is inevitable anyway—not only because of environmental limits, but because of an intrinsic slowdown in growth. Public finances, in other words, have become dangerously reliant on growth that is literally unsustainable. Something’s got to give, and policy-makers can either plan for an alternative way of financing public services or face mounting waves of fiscal and policy crises.

Of course, environmentalists have been calling for this transition for at least the fifty years since the Limits to Growth came out. So how might using the language of growth dependency make a difference?

We may find a clue in a recent CUSP report, Bringing postgrowth research into policy. Based on interviews with politicians and their staff, as well as drawing on the insights of a network of academics, the report highlights the importance of framing arguments in a way that plays to the existing concerns of politicians—while simultaneously pushing the boundaries of what is accepted as ‘political reality’. When it comes to arguments that question growth, however, the report finds that there often remains a disconnect with the agendas of even sympathetic politicians (see box Loose connection).

Loose connection

A Labour insider interviewed for this report explained that while Tim Jackson’s Prosperity without Growth report was read widely by senior people in government when it came out in 2009, it had very little influence on Labour’s electoral platform the following year. Especially in the wake of the financial crash, there was no support within senior Labour circles for the idea of fighting the general election on a manifesto which was not committed to driving up economic growth. Even today, they stressed, the language of ‘postgrowth’ or ‘degrowth’ has extremely limited resonance within frontbench teams, in either Conservative or Labour parties.

Another political interviewee explained that the postgrowth argument struggles both because it is a more abstract set of ideas, and because it is not really on the political agenda already. Even among environmentally-conscious MPs, it is much easier for political campaigns to coalesce around more concrete issues such as bee-killing pesticides or fracking. Overall, as documented by CUSP fellow Rebecca Willis, there remains a pronounced disconnect between the seriousness of environmental challenges and the rhetoric and priorities of politicians.

But reframing growth as a dependency offers something new, with the potential to cut through to more politicians across the political spectrum. It does this by presenting the limits to growth as an immediate, practical problem, with political costs and opportunities even in the short term. Its real strength lies in the way it weaves together different supporting arguments.

The first supporting argument is the core environmentalist case that infinite growth is impossible on a finite planet (or to put this in a more applied form, ongoing GDP growth in developed economies is incompatible with climate stability). But in this case there is a bold twist.

One of the longstanding objections to environmentalist arguments is that growth is needed to maintain spending on public services, especially in the context of an ageing society. The growth dependency argument stands this objection on its head. It says, that’s right, environmental limits mean the ability of government to finance public services through growth is under threat—but that doesn’t mean this is something we should ignore, it means new thinking must be found.

Play Street. Image: courtesy of Sheep”R”Us / flickr.com (CC-BY-ND 2.0)

The aim is to convert an objection to postgrowth advocacy into an overriding public policy problem which deserves to be answered. If this perspective can gain influence it could help to open up a mainstream space for discussion of alternative fiscal and monetary policy—potentially including a greater engagement with Modern Monetary Theory (MMT).

The second supporting argument does not rely on environmental limits but draws attention to the dwindling intrinsic potential for further growth—the ‘secular stagnation’ thesis. Long perceived by Marxist economists, since the 2008 financial crash this theory has grown in mainstream influence. Growth has been slowing down across OECD nations for decades, with the UK seeing average annual GDP growth decline from 3.5% in the 1960s to 2% in the 2010s. On recent trends, Tim Jackson has noted that growth in GDP per capita is on track to reduce to zero across the OECD nations by the end of this decade. For economists such as Robert Gordon, a decline in the scope for transformative innovation has been accentuated by ‘headwinds’ such as an ageing population and the ‘overhang’ of consumer and government debt. Larry Summers, the former US Treasury secretary, famously suggested in 2013: ‘the underlying problem may be there forever.’ Developed economies are just that: already developed. Or as Dietrich Vollrath has put it, more positively, they are ‘fully grown’.

A third element to this argument is the way it engages with debates, not only on the ‘secular’ slowdown in growth, but also on the effects of political attempts to increase growth (or at least to increase the share of wealth going to capital-owners, in the absence of a growing economy overall)—developments associated with rising insecurity, mental health crisis, and populist backlash.

In this way, the framing of growth dependency unites the stark warnings of environmental science with the most immediate concerns of mainstream politics. In doing so, it portrays a postgrowth society as a healthy society, one that has kicked a dangerous and destructive addiction. It speaks to the popular desire to ‘take back control’, such that politicians put the economy in the service of the people rather than the other way round. And it reinforces the arguments of those who make the case that a society’s overriding policy goal should be the sustainable wellbeing of its citizens.

Use of this framing of growth dependency is not going to be a magic bullet, and nor is it the only way in which environmentalists can hope to influence politics. But it has crucial potential to help get postgrowth ideas a political hearing.