by From Dean Baker [This is the last piece in an exchange with Jason Hickel on growth.My last piece is here.] Baker says “I am at a loss to understand why we would have a war on growth.” I don’t know why he is at a loss. I explained the reasons for this in my previous post. There are two I focus on. (1) Because growing the GDP means growing energy demand, and this makes the task of switching to renewable energy significantly more difficult (nearly three times more difficult between now and 2050, which virtually rules out success). (2) Because our preoccupation with growth makes it extremely difficult to get the regulations we need to avert ecological breakdown. Politicians resist such measures precisely because of the risks they pose to growth Baker has, unfortunately, not engaged
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from Dean Baker
[This is the last piece in an exchange with Jason Hickel on growth.My last piece is here.]
Baker says “I am at a loss to understand why we would have a war on growth.” I don’t know why he is at a loss. I explained the reasons for this in my previous post. There are two I focus on.
(1) Because growing the GDP means growing energy demand, and this makes the task of switching to renewable energy significantly more difficult (nearly three times more difficult between now and 2050, which virtually rules out success).
(2) Because our preoccupation with growth makes it extremely difficult to get the regulations we need to avert ecological breakdown. Politicians resist such measures precisely because of the risks they pose to growth
Baker has, unfortunately, not engaged with these arguments.
Next, Baker says that “if we spend enough in other areas, it is possible to offset sharp reductions in the sectors of the economy that are heavy users of fossil fuels.” This argument is central to the standard vision of the Green New Deal (i.e., massive public investment in clean energy, which will generate millions of well-paid jobs and increase GDP growth). Again, there are two problems with this.
(1) Even if we do manage to switch the entire energy system over to renewables, that might help us with emissions but it doesn’t help us with resource use. If we keep growing GDP, resource use will keep going up – even if the economy is powered by clean energy. And let’s not kid ourselves: to the extent that resource use is driving mass species extinction, this is an existential threat that we have to take seriously.
(2) Why does the Green New Deal have to be focused on aggregate GDP growth? Why not just stick with the bits about public investment and jobs and leave it at that? The last New Deal was growth-oriented, sure. But that doesn’t mean that this one has to be. Again – and this is a crucial point – Baker has not made a positive argument for growth. He just for some reason assumes that we must have it, but he never says why. This is odd, because as he himself points out, the problem is not that we don’t have enough income; the problem is that it’s all locked up at the top.
So yes, let’s dramatically increase clean stuff and reduce dirty stuff (in terms of their share of total economic activity), and let’s do this with massive public investment. Here we agree. But there’s no reason to nonetheless keep increasing aggregate economic activity forever. We just don’t need it, and it only makes the energy transition much more difficult.
Baker says: “I don’t see how telling people we don’t care about growth is going to advance an environmental agenda. Growth is an abstraction that is probably meaningless to 99% of the population. People know if they have a secure job and health care, they know if their wages are rising, they don’t have a clue what the growth rate is.”
Now, maybe he’s right that people don’t pay attention to the growth rate. But that doesn’t change the fact that we still need an economy that doesn’t require perpetual growth. It doesmake it easier to get there, however (which is great!). Baker is absolutely correct that what matters most to people is jobs and healthcare and wages. So let’s build an economy that focuses on those things, rather focusing on growth. Crucially, these social goods can be delivered without any additional growth at all.
In fact, the political obsession with GDP growth is an obstacle to the progressive agenda that Baker espouses. Think of all the regressive things that politicians and corporations do in the name of growth: weakening labour standards, slashing environmental protections, liberalizing markets, deregulating banks, cutting social spending. To the extent that the progressive Left operates within the growth frame, we play into the hands of neoliberals and make it much easier for them to justify these measures.
Baker’s final move is to take us into an as-yet hypothetical future. Let’s imagine that we have completely clean energy and we cap resource use at a sustainable level – what Herman Daly has called a steady-state economy. In such a scenario, he says, there’s no reason we can’t keep growing the GDP forever.
Look, maybe he’s right. I don’t particularly care, as this has nothing to do with our actual, real-world problems, and nothing to do with how the existing economy works. It is a completely imaginary world. But let’s follow Baker’s line of thinking for a moment, because it turns out to be quite revealing.
Baker says that in such a scenario, people will produce better products – longer lasting, and higher quality. The products will be “better” presumably because they embody more labour time, or more skill, or more advanced technology, and therefore they will be worth more money despite the fact that they embody less material. “That sure sounds like growth to me,” he says.
Sure. There is no reason that as certain products improve, this shouldn’t come along with an increase in their monetary value. But that is very different from saying that the entire economy, as a total system, should continue aggregate expansion. It is the latter point that is at stake when we talk about growth, not the former.
Let’s imagine that we do manage to scale down global material throughput to 50 billion tons per year (the sustainable rate), hold it steady at that level, and then keep growing GDP by 3% per year, forever. Remember, this is exponential, so in 200 years global GDP is some 1,000 times bigger than it is today.
In such a scenario, capital will be under enormous pressure to find new horizons for surplus accumulation. To use David Harvey’s terms, capital will need to find a “fix”, or an “outlet”. If surplus can’t be extracted for free from nature (because of the resource cap), and can’t be extracted for free from humans (because I assume Baker wants fair wages in this ideal future world), then where will it come from?
Maybe it will come from improving products, as Baker hopes. For this to work, then all products would have to be on average 3% “better” per year, or 1,000 times better by 2200, and all of this betterness would have to be reflected in a correspondingly higher cost. This would be strange for a few reasons:
(1) If I think about the vast majority of things I need to live a good life, I can’t see how I would benefit much from them becoming 1,000 times better. Indeed, it is absurd.
(2) If products are “better” because they are longer-lasting, this may well be inimical to growth, not conducive to it, as it reduces turnover. (And that’s okay!)
(3) In order for “better” to translate into higher cost, the betterness has to be commodified (or enclosed). That might be okay in some cases, but in other cases we may want the opposite. I.e., if we develop better parks or better life-saving medicines, we may not want to charge people more to access them.
But let’s not pretend that capital’s need for constant expansion is going to only make better products. When capital has bumped up against limits to profit-growth in the past, it has found fixes in things like structural adjustment programs, wars, restrictive patent laws, nefarious debt instruments, privatization, and by enclosing commons like water and seeds. Harvey has described this as “accumulation by dispossession.” Why would it be any different this time?
If growth must happen, and if all new value must be immaterial, then capital may well seek to enclose immaterial commons that are presently abundant and free (not just water and seeds but knowledge, songs, green spaces… maybe even parenting, physical touch… perhaps even the air) and then sell it back to us for money.
The point here is that closing off the usual go-to fix (extraction from nature) will generate pressure for other fixes. That is the violent side of growth. It’s just silly to pretend that these other fixes will somehow magically not be harmful. And it begs the question: given these risks, why must we continue to insist on GDP growth, when we know we don’t actually need it? Why not release our civilization, our planet, indeed our imaginations from this pressure?