Covid exposed weaknesses of growth-obsessed capitalist economies: World needs “Degrowth” for a better life: Dr Jason Hickel

By Balagopal

The Corona pandemic has put the world at standstill. World leaders are  to bring back normalcy. But if you rethink, was our world normal? Our world was fraught with several crisis. Our way of life was unsustainable causing huge inequalities. Now a group of more than 1,100 experts and over 70 organizations from more than 60 countries, including from India, have written an open letter questioning the world’s strategy, and suggesting a transformative change as we move beyond the COVID-19 pandemic that has gripped us all.

The letter highlights the fact that the Coronavirus exposed many weaknesses of our growth-obsessed capitalist economy – insecurity for many, healthcare systems crippled by years of austerity and the undervaluation of some of the most essential professions. The experts argue that this system, rooted in exploitation of people and nature, which is severely prone to crises, was nevertheless considered normal.

The experts suggest that in order to start a transition towards a radically different kind of society, rather than desperately trying to get the destructive growth machine running again, that economies should build on past lessons taking advantage of the abundance of social and solidarity initiatives that have sprouted around the world these past months. They argue that we should save people and the planet rather than bail out the corporations like we did during the 2008 financial crisis, and emerge from this crisis with measures of sufficiency instead of austerity.

The signatories of this letter offer five principles for the recovery of our economy and the basis of creating a just society. According to them to develop new roots for an economy that works for all, we need to:

1. Put life at the centre of our economic systems 2. Radically revaluate how much and what work is necessary for a good life for all 3. Organize society around the provision of essential goods and services 4. Democratise society and 5. Base political and economic systems on the principle of solidarity.

The letter summarises by saying “as long as we have an economic system that is dependent on growth, a recession will be devastating. What the world needs instead is Degrowth – a planned yet adaptive, sustainable, and equitable downscaling of the economy, leading to a future where we can live better with less. The current crisis has been brutal for many, hitting the most vulnerable hardest, but it also gives us the opportunity to reflect and rethink”. Therefore, the new big idea which is shaping out all over the world is “Degrowth”.

Balagopal, editor of www.ukmalayalee.com, on behalf of “Kerala Calling” spoke to economic anthropologist Dr Jason Hickel, one of the signatories of the letter, and also author of “Less is More: How Degrowth Will Save the World”, which is due to be published in August 2020.

Dr Jason Hickel is also author, and a Fellow of the Royal Society of Arts.  He is a Senior Lecturer at Goldsmiths, University of London. He serves on the Labour Party task force on international development, the Statistical Advisory Panel for the Human Development Report 2020, the advisory board of the Green New Deal for Europe, and on the Lancet Commission on Reparations and Redistributive Justice.

Excerpts from the interview.

Q: Can you please tell us what is “Degrowth” and about your new book which is coming out in August 2020, titled “Less is More: How Degrowth Will Save the World?” Do you think Kerala is best positioned to learn from degrowth and improve on their economy?

The world has awoken to the fact that we are facing an extraordinary crisis of climate change and ecological breakdown. Now we have to face up to its primary cause. Our economic system – capitalism – is fundamentally dependent on constant growth, ever-increasing levels of extraction and production and consumption, which is burning through the living world.

Not growth for any particular purpose, but growth for its own sake, indefinitely.  Of course, to some extent growth can be useful.  It can be used to reduce poverty, for instance.  But it eventually reaches a point where it becomes extremely destructive and causes much more harm than good.

The important thing to realise is that this crisis is not being caused by everyone equally.  Most nations in the global South consume at levels that are well within planetary boundaries. It is high-income nations that are the problem here, which have extremely high levels of resource use, vastly in excess of planetary boundaries.  This is a problem for the global South.

Half of all the resources that high-income nations consume are extracted from the South, where it contributes to deforestation, pollution and other forms of ecological breakdown.  The same is true when it comes to climate change.

High-income nations have contributed the vast majority of historical emissions, and yet the effects of climate change disproportionately hurt the South. It is a matter of environmental injustice. So if we want to have a decent shot at averting climate catastrophe and reversing ecological breakdown, then high-income nations have to actively reduce their use of resources.  This is known as “degrowth”.

This requires shifting to a post-capitalist economy – an economy that does not rely on constant growth just to stay afloat.  In my new book, Less is More, I describe what this looks like and how to get there. The good news is that we can do this while at the same time improving people’s lives. As we scale down excess production we can shorten the working week and introduce a job guarantee to maintain full employment.

We can retrain workers to move them from sunset industries like fossil fuels and automobiles to socially necessary sectors like renewable energy and public healthcare.

We can share existing income more fairly, with a living wage policy and progressive taxation on top incomes, and we can invest in universal public services to ensure people can access the goods they need to live a flourishing live.

In Less is More I show how this approach can enable us to end poverty and achieve long, healthy, happy lives for all.  As rich countries degrow, this will release the global South from the pressure of extractivism and climate change.  Degrowth is a process of decolonization.

The interview first was published on Kerala Calling, a Kerala government publication

Q: What about the global South, and places like Kerala?

The important lesson is that we must reject the Western development model that sees GDP growth as the highest value.  Instead, we need to focus on the things we actually want to achieve: better health, better education, good wages, healthy food, a stable environment. If this requires some growth, within planetary boundaries, so be it.  So long as growth is never our objective, in and of itself.  This is what I call “post-growth” development.

Q: The success Of an economy or country lies in successful human development with less ecological impact. However, there is no growth in Kerala’s economy due to not much industries or businesses opening up which lessens the impact on its ecology. Is this the best time for Kerala to review its approach to economic growth and how can they materialise this?

Last year I worked with colleagues in ecological economics to develop the Sustainable Development Index (www.sustainabledevelopmentindex.org).  It starts with the UN’s Human Development Index and adjusts it for ecological impact (consumption-based CO2 emissions and resource use).

This way the countries that have high human development but low ecological impact rise to the top. We can also add sub-national regions to the list, like Kerala, and different US states.

If we do this, we see that Kerala is toward the top of the ranking, in the top 15.  India is 56 and China is 101.  People often look to China as a model for development, but China’s ecological impact is extremely high.  Kerala is a much better model for sustainable development, along with Costa Rica and Sri Lanka.

It might seem that Kerala’s strong result must be because 30 per cent of its income comes from remittances abroad, so there is less domestic industry.  But the SDI is a consumption-based measure that corrects for this.  Even if Kerala had that 30 per cent income from extra domestic industry, the result would be the same.

Q: But Kerala is beginning to reach planetary boundaries. What is the best way to continue improving human development without causing ecological damage?

The first and most important thing is to continue to extend high quality universal public healthcare and education for all.  This is the ticket to long, healthy and happy lives.  The next step is to distribute income more fairly.

Kerala has extremely high rates of inequality – one of the worst in India.
By distributing income more fairly, you can improve the lives of ordinary people without needing any additional GDP growth. So, Kerala could introduce a “maximum wage” policy, where any incomes in excess of a given multiple (say, 10x or 20x) of the minimum wage face a 100% tax.   This will create an immediate incentive to raise the minimum wage as high as it can reasonably go.

Q: Do you advise that countries should stop measuring the indictor of progress of their economies through the GDP as it will not give the true outcome and its only measuring the welfare of capitalism? Please explain why and what is the best possible options available to measure an economies success?

GDP is a very flawed measure.  It counts up the monetary value of all the stuff we extract and produce and consume, but it does not count the costs.

If you destroy a forest for timber, GDP goes up but it does not count the cost of losing that forest as a habitat for endangered species or as a sink for carbon.  If you strip a mountain for coal, GDP goes up but it does not count the costs of the emissions. If you make people work longer hours then GDP goes up, but it does not count the social and psychological costs of overwork.  So it is imperative that we replace GDP with a more reasonable measure.

There is one called the Genuine Progress Indicator (GPI), which starts with GDP and subtracts social and ecological costs.  This is used by some countries, and even some states in the US.

When politicians seek to maximize GPI, they are incentivized to maximize social goods while minimizing ecological bads.  Kerala could introduce such a measure!

Q: Coronavirus has already exposed many weaknesses of growth-obsessed capitalist economies. It is a definite that people will be for governments to prioritise health and wellbeing over economic growth. How can people be made aware that the present governments are following the culture of accumulation of capital rather than human welfare? How will people be able to put pressure on governments to redefine their approach towards economy?

We must ask ourselves, if the economy does not deliver human well-being and ecological stability, then what actually is the point?  Why should we tolerate an economy that is geared primarily toward the interests of capital, and the rich, rather than to humans and the non-human beings with which we share this planet?

We need to demand a more rational, more humane economic system.  Perhaps the government of Kerala will give some thought to this, and show the world that there is another way?  Some countries are already moving in this direction.

New Zealand recently announced that it will no longer be pursuing GDP growth but will instead organize government policy around improving human well-being.  Scotland followed suit, and Iceland. Will Kerala be next?

Q: There are many critics who say that there isn’t an alternative to capitalism in the present times due to globalisation? Do you think governments can act in solo towards de-growth?

It might seem that there is no alternative to capitalism, because capitalism is all we know.  When we think about evolving beyond capitalism it can seem scary.  What will it be like?  But in reality is neither difficult nor scary.

A post-capitalist economy is quite simply an economy that prioritizes the well-being of humans over the well-being of capital.  It is an economy that does not require endless growth, and endlessly increasing ecological impact, in order to deliver flourishing lives for all.

Can governments act solo toward de-growth?  of course they can.  There is nothing to stop them.

Q: Only with a sensible government who care for the needs of the people will be able to give quality of life. How can we replace those leaders who are only interested in the economic interest with those who are progressive and looks after the welfare of its people?

Real democracy is the answer.  A recent study by scientists at Harvard and Yale found that the vast majority of people – around 70 per cent – will always choose to share wealth fairly and sustain our planet’s ecology for future generations.

In our existing political systems, this desire is overridden by the selfish minority – and they can do it because in many cases they control the media, and they donate large sums to political campaigns.

So we need to get big money out of politics, we need to democratize our media, so that we can have an open, democratic discussion about what we actually want the economy to look like and what we want it to deliver.

When we do, we will find that the economy will look very different than the economy we presently have.

Balagopal is editor of www.ukmalayalee.com