Letter to a Libertarian friend

Dear A.,

I am happy to hear that you thought of me when reading the article you sent me, grateful that you share your thoughts on it with me, and relieved to learn that you do no longer seem to oppose all of the assumptions behind it. I take this as a hint that you increasingly acknowledge the severity of the climatic and ecological collapse occurring right now.

To my mind, you and I always seemed to be locked in a painfully paradoxical situation. Here I am, comfortably lounging in a place that will be fairly safe and cool and dry and inhabitable for another few decades, trying to convince you that we must act radically to stop climate collapse. There you are, cautioning against too ambitious climate action, in a place where flood and drought already take turns in making people cruel and their life miserable, a place that will have turned into an inhospitable desert by the time that you’ve become a professor, if we do not adopt the very policies that you caution against. It always hurt me to see you not see this, and every sign of you gaining vision is a bit of relief for me.

You have sent me an “Economist” article that argues against Degrowth, which the anonymous author takes to be mainly an approach to climate policy. He essentially claims that (1) to grow while reducing dependence on fossil fuels, the poor world needs new technology and new investment; and (2) growth supplies new technology and new investment. Besides obviously forming a circular argument when taken together, both premises are wrong already on their own. I would like to address them in turn.

Ad (1): Let us give the author the benefit of understanding the word “grow” in this context as “raising living standards” or, better, “ensuring that everyone has access to the material basis for a good life”. We can probably agree to this as the overarching objective of economic policy. So, what will this goal require over the next years?

The first and very concrete condition is that the collapse of the climate and ecosystems must be stopped, since otherwise there might not be much of a material basis for feeding even a fraction of the world’s population during the second half of the century. I hope that we are moving towards agreement on this.

The second, more abstract condition is that institutions must be in place that organise economic activity in a way capable of meeting everyone’s material needs. These institutions can take the form for instance of governments, firms, capitalist and non-capitalist markets, commons, cooperatives, families, communities of neighbours and friends or other social networks. In any of these institutional settings, humans use technology and deploy labour to transform energy and resources into useful things and services. These different institutions do so according to different systemic logics and objectives. For instance, in families, the overarching logic tends to be some combination of communitarianism and patriarchy; in typical neighbourhood credit networks, one of mutual aid and social recognition or honour; in typical government agencies or firms, some mix of bureaucracy and power play; and in capitalist markets, actors cannot but follow the motive of profit or capital accumulation.

All of these different systemic drives stand in logical conflict to the original objective we agreed on. But the degree of this conflict varies between the type of institution and the context they are in. What Degrowthers acknowledge is that, in almost all contexts, capitalism is a very ineffective and destructive way of providing for people’s needs, because the capitalist imperative of accumulation contradicts and prevents the pursuit of the overarching goal of satisfying human needs while leaving life systems on earth intact. This is so because (1) capitalists seeks to cut costs and most activities done today would not be viable if ecological costs were truly internalized; and (2) because capitalism enhances living standards only as a side effect: The individual capitalist’s compulsion to accumulate capital will, if macroeconomic and ecological conditions allow that its pursuit is successful on the aggregate, lead to growth of both the capital stock and of aggregate demand in the whole economy — put simply, to GDP growth, which is an emergent property resulting from capitalist competition and accumulation.

When it comes to capitalist states, the connection is more straightforward: Most governments pursue GDP growth directly, mainly as a means to pacify distributional conflicts, e.g. to protect core constituencies from unemployment. For them, GDP growth often is not just a side effect (as for firms), but a direct goal.

And it is true that economic growth, in many contexts, may enhance living standards, as in the West pre-WWI and post-WWII, or in East Asia in the second half of the 20th century. It may depress living standards in other contexts, such as pretty much everywhere in the colonial 18th and early 19th century, or in the US 1930s, in post-Soviet Russia or post-2008 in Southern Europe — or, I would add, in a present increasingly characterised by climate and ecological collapse.

In any case, there is no necessarily stable relationship between GDP growth and wellbeing, although perhaps in most periods of history the correlation was admittedly positive. Put crudely, using capitalist growth to ensure the good life for all is a bit like using a knife to eat Dal: Sure, you can use it, it often works, but sometimes it doesn’t, plus you get tired of the whole thing quite quickly; you might also hurt yourself in the process, and in any case, it would be a good idea to just use your hands instead.

This is, in a sense, the idea of Degrowth. It acknowledges that we could fulfil our needs and ensure a good life for all without at the same time increasing material and resource throughput. The crux is that if we did adopt the technologies and economic institutions necessary to do this, GDP would probably shrink. The most plausible reason why we have not yet adopted these technologies and institutions is that certain other dominant institutions do require GDP growth, either directly (states) or as a necessary side effect (capitalists). The pursuit of growth prevents the solutions to be put in place. That is why we should start to politically ignore GDP. Growth is an unnecessary and misleading detour.

This is obviously also true for Kaya’s neat emissions formula: it does not correspond to how Degrowthers like see the world. GDP need not really appear in that formula.

Here it may be helpful to briefly point out that Degrowth as a movement is not really mainly about reducing emissions, or even about the environment. Most of us (and I do not consider the “Limits to growth” authors Degrowthers; they are Malthusians) also do not focus on the question of whether growth is possible given environmental constraints, but whether it is desirable and useful or not. Orthodox economists often misrepresent us in these regards when they attack us, although probably more out of ignorance than strategy. However, Degrowth does of course have to say something about emissions, so let’s dive in.

Let emissions = population * energy/capita * emissions/energy. Given that reducing population is not an option, and given that emissions have to go down massively and quickly, we should try to reduce both emissions per unit of energy and total energy use per capita.

Let me add a note here just to provoke you a bit: Because fossil fuels are more costly than renewables and yet also more profitable due to the competitive structure of fossil fuel markets, renewables are unlikely to mobilise enough investment to meet the necessary pace of decarbonisation unless there is massive non-capitalist investment, probably by the state and along fairly Leninist lines given the scale and timeframe of the transition.

But Degrowthers are mainly interested in reducing and re-distributing energy use per capita. This mainly amounts to massively decreasing the energy use of rich people, to leave room for increasing the energy use of the poorest. Degrowthers have convincingly argued that this is relatively easy, just and safe way to prevent collapse while at the same time substantially enhancing living standards. We also do not need much more innovation, spreading existing technologies suffices. But here I would just like to direct you to the work of Julia Steinberger et al., and I will not sum it up here because I urge you to read it yourself. Just note that, what goes for energy also goes for water, land, biodiversity, the nitrate cycle — you name it. In fact, it also goes for labour time, but we need not go into that here.

Let us briefly turn to premise (2); the idea that only economic growth delivers progress. A quick glance at the history of technical progress should be enough to discard the idea that capitalism is necessary for breakthrough inventions; although admittedly, on the dispersion of some innovations it has, hand in hand with massive state planning, done quite a good job. But when it comes to the innovations that our anonymous author probably has in mind, intellectual property rights and unequal global trade relations — two core institutions of modern capitalism — stand in the way of innovation more than boosting it. In any case, even if a Degrowth economy might be low-investment on aggregate, that does not mean that investment in R&D and technology dispersion need to be low, especially in sectors that are particularly beneficial to human well-being, such as medicine, agroecology, energy efficiency and renewables, or care. There could be a lot of creative destruction in a Degrowth transition, only that the destruction of sectors like fossile fuel will likely outweigh the creation of a renewable sector, if you choose to measure the two in GDP.

In a certain sense, capitalism even systematically prevents the adoption of efficient methods of production. Here, an example from Fossile capital (the book from where our anonymous author’s discussion takes of) might be illuminating: The owner of a new steam-driven mill could “get workers from old one without having to move them to some faraway river” — one of the core advantages of this, not mentioned in the article, is that workers are overabundant at the new locale, which allows the creation of a competitive labour market (a novel institution to become the core of capitalism), weakens worker’s bargaining power and the susceptibility of the cotton mill to strikes, and thereby enhances profits. Capitalists will direct production to maximize their share of social surplus, even if this decreases the total social surplus. In short, it is inefficient. Steam power thus not ensured higher profits than water power even if the latter, as such, was cheaper — a situation, by the way, resurfacing today with cheap but unprofitable renewables. The whole problem obviously gets much, much worse if we begin to factor in ecological “externalities”.

But on a more fundamental level, we probably agree that technology is just one minor aspect of social progress, which more importantly consists in the development of collective autonomy and various aspects of political freedom — most notably perhaps the freedom from toiling most of your waking hours, and the ability to connect with others free of social hierarchicies. Where will not agree is the diagnosis that capitalism is actively preventing progress in these regards — again, I will not be able to convince you of this, but perhaps Erik Olin Wright may.

Now let us look at the “moral” problems of Degrowth our anonymous author is so worried about. He starts from the frankly laughable position that “production and consumption should remain individual choice”, which sounds like he actually beliefs that they ever were. I certainly did not freely choose to contribute to people drowning in carbon-induced floods because there is no reasonable zero-emission mode of getting to work; that is thanks to car manufacturers’ and coal companies’ active fight against my democratically expressed choices. But fine. What our author probably means is that governments should not have too much power in enforcing consumption and production patterns. I partly agree: Practices like rationing should obviously be a last resort. What the state needs to do instead is offer biophysically lightweight, high-quality public services that eventually make most of private consumption unnecessary. Energy-efficient public housing and public transport, free internet, access to high-class education and medical services and other physically and economically highly efficient public goods. (If you are worried about how the state can pay for that, I ask you to look forward to some texts I am working on right now, and in the meantime you may check out this piece). The idea is not to enforce any particular choice on people, but on providing an alternative to the shitty options that they face now. Of course, by drawing labour resources away from other activities, the state limits the space for alternative; but so does every single act of engaging in any economic activity. I would prefer to organize the choices in this macroeconomic tradeoff on the basis of votes to organizing them on the basis of purchasing power. However, I am not saying that, beyond providing for people’s most basic needs, the state needs to play a bigger role in the long run than it does today; as every staunch communist will agree, it should play a progressively decreasing role, as essentially communist local institutions like the ones I mentioned above take over more and more of economic organisation.

Perhaps this is also a good place to make it very clear that no Degrowther ever said that “governments [should] suppress growth”. Here our author is very transparently dancing with a straw man. Most articles on Degrowth start with the clarification that Degrowth does not mean recession, let alone state-enforced recession. That is obviously our enemy. Austerity policies — suppressing growth in a growth-dependent system by way of creating public scarcity — are the exact opposite of Degrowth policies, which after all is the idea of making the system independent of growth by creating public abundance (along the lines of universal public services, see above).

Maybe its apt to conclude that we do not need to enforce Degrowth, we just need to stop enforcing growth. This sounds illogical only if you assume that economic growth is somehow a natural aspect of human societies, an assumption that I guess you as a Libertarian would be among the first to discard.

So how to get there? I agree with the anonymous author that the prospect of a Degrowth party winning elections in the industrial Core is not extremely high, although we are making some inroads. If you do want my humble opinion on this extremely complex question of strategy, Degrowth might most probably come about as a logical consequence of further Decolonization. The political impulse is more likely to come from the Periphery, for instance, from political organisations of migrants displaced by climate collapse or of workers who see their living standards eroded by unequal global trade. I don’t really know; but I think that preparing the ground in the Core is still worthwhile, although we won’t win elections here in the next decade.

What I do know is that, if we do want to preserve a chance for a life in dignity for your family, your friends and your neighbors over the next decades by limiting the extent and speed of the climatic and ecological collapse, then countries like my own need to stop emitting carbon and destroying ecosystems for their consumption in the next 5–10 years, so that countries like yours have some more breathing space to do the same. The argument for this of course relies on historical emissions and the associated responsibility. If we do not believe in some technological miracle that could decouple energy use from emissions, then the only way to do this is to massively reduce energy use in the Core. As emissions and energy use are so extremely unequal, this implies making our societies more egalitarian and hopefully thereby also more democratic. All of this is quite trivial and should be uncontroversial, really. The particular appeal of Degrowth is that it points out how this whole transformation could make our lives better, freer, more fulfilling. And I hope that, if I can feel this appeal, others may as well. In fact, in the vast majority of the world’s traditional cultures, but also in axis age religions (not the least of which South Asian ones), themes of limiting your material needs to live more freely do resonate, which makes me quite optimistic about the global appeal of Degrowth ideas.

I am obviously very curious to hear what you think about all of this. I hope that I could help clear up some misconceptions and that you may be inspired to reply to me on the basis of a clearer understanding of what is at stake. I also still have not left all hope that you will eventually turn into a staunch anti-capitalist, anti-colonial, eco-feminist comrade. I am really looking forward to that, and/or to hearing from you.

All the best,
Christopher