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#221. Strategies for a post-growth economy

February 8, 2022

#221. Strategies for a post-growth economy

PART ONE: BUSINESS IN A NEW ERA

Under current conditions, it’s increasingly hard to understand why the inevitability of economic contraction remains so very much a minority point of view.

None of this has to be a disaster, but the management of involuntary economic ‘de-growth’ requires innovative strategies, most obviously in business and government.

The aim here is to concentrate on the PNFC (private non-financial corporate) sector, evaluating strategies that could mitigate the worst effects of economic contraction.

Other sectors – government, households and the financial system – may be the subject of future instalments, whilst the role of technology might merit separate discussion.

Don’t over-simplify

Readers are reminded that this site does not provide investment advice, and must not be used for this purpose.

In any case, it would be an over-simplification to assume that the decline in prosperity must crush discretionary sectors whilst leaving suppliers of essentials largely unscathed.

In fact, suppliers of intermediate (and intermediary) services are at even greater risk than businesses which supply products and services that the consumer might want, but doesn’t need.

…click on the above link to read the rest of the article…

Degrowth economy: The climate solution no one is talking about

January 31, 2022

Degrowth economy: The climate solution no one is talking about

For all the talk of renewable energy, electric vehicles and plant-based diets, there’s a gaping hole in the way we’re trying to solve accelerating climate change. We will not stay below 2°C of warming while pursuing economic growth — yet barely anyone talks about it.

Since the end of World War II, Gross Domestic Product (GDP) growth has been the metric of human prosperity in Western nations, the idea being that if the productivity of the economy increases so will the wellbeing of the people within that economy. And for a while, that was the case. But since the 1970s, increases in GDP have, on average, failed to translate into increases in wellbeing and happiness.

It is not surprising. Research has shown that once a certain GDP threshold, or level of wellbeing, has been met people gain little from consuming more “stuff” — a necessary requirement for continuous GDP growth.

Robert F Kennedy eloquently summed up the inadequacy of GDP as a metric of wellbeing at a speech he gave in 1968:

…the gross national product does not allow for the health of our children, the quality of their education or the joy of their play. It does not include the beauty of our poetry or the strength of our marriages, the intelligence of our public debate or the integrity of our public officials. It measures neither our wit nor our courage, neither our wisdom nor our learning, neither our compassion nor our devotion to our country, it measures everything in short, except that which makes life worthwhile.

…click on the above link to read the rest of the article…

The Political Economy of Degrowth

December 31, 2021

The Political Economy of Degrowth

Abstract

What is degrowth and what are its implications for political economy? Divided in three parts, this dissertation explores the why, what, and how of degrowth. The first part (Of growth and limits) studies the nature, causes, and consequences of economic growth. Chapter 1: Understanding economic growth answers a series of questions about the nature of economic growth: What is it exactly that grows? By how much does it grow? When and where does it grow? How does it grow? And why should it grow? The three following chapters develop a triple objection to economic growth as no longer possible (Chapter 2: Biophysical limits to growth), plausible (Chapter 3: Socioeconomic limits to growth), and desirable (Chapter 4: Social limits of growth). The second part (Elements of degrowth) is about the idea of degrowth, especially its history, theoretical foundations, and controversies. Chapter 5: Origins and definitions traces the history of the concept from 1968 to 2018. Chapter 6: Theoretical foundations presents a normative theory of degrowth as de-economisation, that is a reduction in importance of economic thoughts and practices. Chapter 7: Controversies reviews the attacks the concept has received. Whereas the first part diagnosed economic growth as the problem, this part offers a solution. The take- home message is that degrowth is not only a critique but also a fully-fledged alternative to the growth society. The third part (Recipes for degrowth) is about the transition from a growth economy to a degrowth society. It opens with an inventory of the policies that have been mobilised by degrowthers until today (Chapter 8: Strategies for change). The three following chapters on property (Chapter 9: Transforming property), work (Chapter 10: Transforming work), and money (Chapter 11: Transforming money) go from theory to practice and translate the values and principles of degrowth into operational transition strategies. Chapter 12: Transition strategy presents a method to study the interactions between degrowth policies in order to craft effective transition strategies. The central claim of this final part is that degrowth is a powerful conceptual tool to think about societal transformations for social-ecological justice.

…click on the above link to read the rest of the article…

Putting Post Growth Theory Into Practice

December 24, 2021

The Post Growth Entrepreneurship Incubator helps founders break free from traditional business models and implement sustainable non-extractive practices.

Annie Spratt via Unsplash

How do you define Post Growth Entrepreneurship?

A three-minute Post Growth Entrepreneurship primer

What brought you to post growth thinking and approaches?

…click on the above link to read the rest of the article…

The Selling of Degrowth

December 24, 2021

The “Selling” of Degrowth

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THE “SELLING” OF DEGROWTH

Can those who advocate hitting the brakes on economic growth get their message across before it’s too late?

Over the last three decades, a growing number of scientists and ecologists have argued that economic growth has long outstripped the capacity of the planetary ecosystem. They have developed numerous sophisticated models to demonstrate their point. They have boiled down the technical information—about the availability of mineral resources, the limits of energy generation, the constraints of food production, the effects of biodiversity loss, and of course the impact of climate change—into accessible texts. They have lobbied governments, and they have crafted soundbites for the media.

Despite these efforts, economic growth remains at the heart of virtually every government’s national policy. Even the various Green New Deals that have been put forward around the world are wedded to notions of economic expansion. At the heart of these more recent attempts to bring carbon emissions under control is the concept of “green growth,” which has become the current mantra. So, inevitably, advocates of degrowth have addressed this new version of “sustainable” economic expansion.

“We have to continue to pound away with articles and social media to dispel that fuzzy and oxymoronic notion of ‘green growth,’ that there is no conflict between growing the economy and protecting the environment,” observes Brian Czech, the founder of the Center for the Advancement of the Steady State Economy (CASSE) in Washington, DC.

The evidence that economic growth is associated not only with climate change but all the other ills of resource depletion is overwhelming. But evidence is not enough. “When we look at the discourses at the international and even at the national level, the recourse to the evidence is not what is necessarily moving the argument,” points out ecological economist Katharine Farrell of the Universidad del Rosario  in Colombia…

…click on the above link to read the rest of the article…

Investing in Degrowth

December 13, 2021

Investing in Degrowth

Released 13 December 2021, Investing in Degrowth is a first-of-its-kind white paper drawing attention to the emerging degrowth economy, setting out the rationale for investing in degrowth-compatible enterprises and laying down the groundwork for deciding the core characteristics of degrowth investing.

Co-authors Jennifer Wilkins, founder of Heliocene, and Bill Murphy, Executive Director of Purpose Capital, call for New Zealand’s sustainable investing and finance communities to consider the feasibility of funding the transition to a new economy that no longer supports economic activities that fall outside safe ecological and fair social boundaries.

David Woods, a leader in impact investing and sustainable finance in New Zealand, writes in the foreword:

“We’re on an exciting journey as capitalism rediscovers itself, and it goes far beyond just greening the economy. Degrowth (including, for instance, circularity) is a significant part of this journey, and this thought-provoking white paper is a welcome addition to the canon of ideas for our country and our world.”

Download Investing in Degrowth:

White Paper_Investing in Degrowth_Dec 2021Download

On the Virtues of Self-delusion—or maybe not!

December 2, 2021

On the Virtues of Self-delusion—or maybe not!

Prepare developed democracies for long-run economic slowdowns

November 26, 2021

Prepare developed democracies for long-run economic slowdowns

Developed democracies proliferated over the past two centuries during an unprecedented era of economic growth, which may be ending. Macroeconomic forecasts predict slowing growth throughout the twenty-first century for structural reasons such as ageing populations, shifts from goods to services, slowing innovation, and debt. Long-run effects of COVID-19 and climate change could further slow growth. Some sustainability scientists assert that slower growth, stagnation or de-growth is an envi-ronmental imperative, especially in developed countries. Whether slow growth is inevitable or planned, we argue that devel-oped democracies should prepare for additional fiscal and social stress, some of which is already apparent. We call for a ‘guided civic revival’, including government and civic efforts aimed at reducing inequality, socially integrating diverse populations and building shared identities, increasing economic opportunity for youth, improving return on investment in taxation and public spending, strengthening formal democratic institutions and investing to improve non-economic drivers of subjective well-being.

Modern liberal democracies—with broad economic and political freedom and stability—predominate in today’s developed world, but they are a historical anomaly. Before the Industrial Revolutions, there was both little per-capita gross domestic product (GDP) growth and little democracy (Fig. 1a). Since the Industrial Revolutions, most countries have escaped the ‘Malthusian trap’—where land productivity growth led to growth in population but not affluence1—and global affluence has increased by more than a factor of ten1,2. This unprecedented global growth has temporally coincided with the global proliferation of democracy (Fig. 1a). In the early nineteenth century, less than 1% of the world’s population lived in a democracy, compared with about 55% today3. There is some evidence of bidirectional causality: on average (with some exceptions), open, democratic institutions promote growth4–6, and long-run growth and affluence promote the formation of democratic institutions7,8…

…click on the above link to read the rest of the article…

Degrowth–the promising climate change strategy no politician wants to handle

November 24, 2021

Degrowth – the promising climate change strategy no politician wants to handle?

 

Can the Green New Deal save us? No it can’t.

November 22, 2021

Can the Green New Deal save us? No it can’t.

Advocates for a Green New Deal are for a collection of admirable goals which it is usually taken for granted can be achieved within a capitalist economy and while the pursuit of economic growth continues.  Here is an indication of the main reasons why these assumptions are totally mistaken.

The fundamental assumption underlying these beliefs is that economic growth can be “decoupled” from resource and ecological demands and impacts. That is, it is claimed that the rate of production and consumption can continue to increase while the resources needed to do this can be reduced to sustainable levels, along with the environmental damage it causes. This comforting faith is widely held, including by major global institutions.

It is disturbing that this tech-fix faith persists despite the mountain of evidence that it is wrong. Anyone still unaware of this should consult the massive studies by Hickel and Kallis, Parrique et al., and Haberle et al.  The second lists over 300 studies and the third lists over 850.

There are some areas in which production is being achieved and/or could be with reduced impacts, and transition to renewable energy is an important instance.  But what matters is whether the overall output of an economy can be reduced as its GDP rises, which is “absolute” decoupling. The above reviews conclude emphatically that despite constant effort to increase efficiency and cut costs absolute de-coupling of resource use and environmental impact from GDP growth is not occurring, and that greater recycling effort and transition to “service and information economies” are not at all likely to achieve it. Despite constant effort to improve productivity and efficiency, in general growth of GDP is accompanied by growth in resource use.

…click on the above link to read the rest of the article…

Degrowth and Decolonisation in the Red Zone

November 6, 2021

DEGROWTH AND DECOLONISATION IN THE RED ZONE

Hello world. Welcome to Glasgow. Welcome to Scotland. We are drawing on Glasgow’s radical past to inject hope and urgency into the moribund COP process.

YOUR VISION OF our country may be an idealised one of lochs brimming with salmon and glens filled with deer, but in reality we’re a petro-chemical economy being held ransom by the British State. Our most famous icons and exports – our salmon and deer and grouse – are really symbols of a country disfigured by landed power. We remain a semi-feudal nation with one of the most unequal distributions of land ownership in the world.

In Gaelic, Glasgow means ‘Dear Green Place’, but Glasgow was also known from the 19th century as the Second City of the Empire, a city that became synonymous with massive expansion, global trade, industry, invention, and shipbuilding.

For almost 200 years, the statue of the celebrated Scottish inventor and engineer James Watt has stood in George Square. Every schoolchild is taught about the invention of the steam engine in 1776, which was fundamental to the changes brought by the Industrial Revolution across the world. What’s less well known is that Watt’s father was a slave trader, a colonial merchant who subsidised his son. The development of the steam engine was funded by slavery. Watt himself was involved in colonial commerce and played a direct role in the trafficking of enslaved people.

With Glasgow playing host to the COP in 2021, we have historical symmetry. It’s more of a loop than a continuum; as the world faces climate catastrophe, the same city that was pivotal in the Industrial Revolution, colonisation, and Empire is the city that must now be the pivot towards decolonisation and degrowth.

…click on the above link to read the rest of the article…

Returning to a 1970s Economy Could Save Our Future

November 4, 2021

Returning to a 1970s Economy Could Save Our Future

We’d contract energy use by half. Shrinking consumption is the solution we can actually live with. Second of two.

GlobePalmHandGraphic.jpg
A society that consumes less energy and stuff could rehumanize society and heal the biosphere.

[Editor’s note: Read part one of this two-parter here.]

Thanks to bright green technologies, we can continuously grow the level of consumption on planet Earth and deliver a bloated North American lifestyle to all without inviting climate catastrophe or a general breakdown of natural ecosystems that support all living things.

That’s the big bold lie that politicians are telling themselves this week at yet another climate conference. Greta Thunberg calls such dissembling just so much “blah, blah, blah.”

As I’ll share in this piece, a number of brilliant energy critics from Vaclav Smil to William Rees have done the figuring, acknowledged the physical limits of things, and told us the truth. A truth that is not as uncomfortable as you might think.

It is this. We must contract the global economy, restructure technological society and restore what’s left of natural ecosystems if we want to live and breathe.

The appeal of the “tech will save us” charade crosses ideological lines. No sacrifice is necessary; no wisdom is required; no change is necessary. Both Green New Dealers and the Business-as-Usual Crowd believe a variety of so-called green technologies forged by the burning of more fossil fuels will save the day and postpone what is already happening: a great unsettling.

These green illusions, as I explained yesterday, represent the worst kind of falsehood. Many of these techno fixes, such as direct air capture, are largely unproven, don’t scale up or will invite bankruptcy.

…click on the above link to read the rest of the article…

What is Surplus Energy?

October 28, 2021

What is Surplus Energy?

I’ve been meaning to write an article featuring Dr. Tim Morgan’s blog for quite some time due to the fact that he has quite an awesome site. You can find his blog here, Surplus Energy Economics. Many people may find the word economics in the name somewhat off-putting, but these economics are more about energy rather than money and relate to the energy cost of energy rather than financial price of energy. This is a primary distinction that many people simply DO NOT UNDERSTAND, which amounts to precisely WHY there is so much misinformation constantly being spread around about all the predicaments my blog focuses on. Energy stocks are a resource that require energy in order to be extracted, shipped, refined, stored, and transported to end users all over the world. The energy stocks remaining (after the energy required to acquire said energy) are available to do actual work and this is the “surplus energy” in the title. Money is nothing more than a claim on future energy. The predicament of energy and resource decline is that due to these facts, money which has value today will continue to become increasingly worth less as time moves forward because the surplus energy it represents is in constant decline.This particular entry, A Moment of truth, is what promulgated this post. It goes into detail about the false narratives which have been attempted to “fix” the issues with energy decline (the constant borrowing from the future to pay for the issues of today) and the fact that degrowth is the only possibility from here on out…

…click on the above link to read the rest of the article…

The value of a degrowth economy: Our planet would be richer for it

September 27, 2021

The value of a degrowth economy: Our planet would be richer for it

(Cartoon by Mark David | @MDavidCartoons)

Decades of economic expansion have come at the expense of developing nations and a tremendous cost to the planet. Degrowth is a healthier future option, writes Erin Remblance.

THE THOUGHT of a degrowth economy can be scary. We’ve all grown up in a society where growth is good and not growing – recession – is bad.

Recession means unemployment, financial hardship and increasing poverty. Why would anyone choose that? But degrowth doesn’t mean recession. Degrowth is a conscious set of policies designed to optimise human and planetary well-being while minimising inequality, poverty and environmental harm. It is recognition that “more” doesn’t mean better and that, despite decades of economic growth, on average we aren’t happier.

Degrowth acknowledges that economic growth in predominately western nations has come at the expense of developing nations and at a tremendous cost to the planet and its ability to sustain life — and now we are on the brink of an unimaginable catastrophe.

 

Degrowth economy: The climate solution no one is talking about
Degrowth economy: The climate solution no one is talking about

The time is upon us to consider economic degrowth and stop exploiting our planet’s finite resources for personal gain.

So, what could a world not obsessed with gross domestic product (GDP) growth look like? In his book, Less Is More: How Degrowth Will Save The World, Jason Hickel advocates for many policies, including:

  • ending planned obsolescence on products such as household appliances, technological devices, furniture, houses, cars, etcetera;
  • cutting advertising;
  • shifting from ownership to “usership” — think of all of the “stuff” we own that spends most of the year idle, especially cars;
  • ending food waste;

…click on the above link to read the rest of the article…

Tao of Degrowth

September 1, 2021

Tao of Degrowth

I am a degrowther and a doomer but this is not what your first reaction indicates.  We are taught to be optimistic and so forth.  People loath pessimist and doomers.  People tire of people who cry wolf constantly.  This is what the doom movement has done for decades now.  There is some truth to this but there is also the reality of the slow boil.  A frog will slowly boil without realizing its fate.  Humans because of our short-termism and immediate gratification tendencies slow boil with periods of change.  Some of this is beneficial because it is the degree of shock and the duration that is the key variable of survivability so adapting slowly allows survivable change.

My doom approach is different.  I am a visionary of sorts in regards to the tipping over of an age.  This is academic and I have been studying this for decades now.  I have been living the response for over a decade.  I have digested the available science not as a specialist but as a generalist with some specialization.  I study all fields in general picking through them in relation to decline.  I specialize in energy and systems for my theoretical approach.  It is my assessment that a multifaceted tipping over is now at or near the peak point.  The tipping over is at or near where diminishing returns to technological efforts go non-liner into problem creation.  I see an extinction event for life systems with localized failure and general decline.  The planetary systems that support life is in abrupt change with climate but also the nutrient, carbon, and hydrologic cycles.  Finally, systematically, civilization is in a phase of degrading.

…click on the above link to read the rest of the article…

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