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The Argument for a New Economic Paradigm
Degrowth economics have a simple solution to global warming: downscale production and consumption and ditch GDP as a measurement of human flourishing.
Degrowthers argue that this is possible without affecting our standard of living through measures such as work-sharing, consuming less, and devoting more time to art, family, nature and community.
“Degrowth means a phase of planned and equitable economic contraction in the richest nations, eventually reaching a steady state that operates within Earth’s biophysical limits.” — Samuel Alexander (The Conversation)
Dr. Jason Hickel, an anthropologist, author and a Fellow of the Royal Society of Arts, also argues that degrowth is not about reducing the GDP but “restoring public service and expanding the commons so that people will be able to access the goods they need to live well without a high-level of income”:
I reject the fetishization of GDP as an objective in the existing economy, so it would make little sense for me to focus on GDP as the objective of a degrowth economy. Wanting to cut GDP is as senseless as wanting to grow it.
The objective, rather, is to scale down the material throughput of the economy. From an ecological standpoint, that’s what matters. And indeed some orthodox economists might even agree. Where we differ is that while they persist in believing (against the evidence) that this can be done while continuing to grow GDP, I acknowledge that it is likely to result in a reduction of GDP, at least as we presently measure it. In other words, if we were to keep measuring the economy by GDP, that’s what we would see in a degrowth scenario.
And that’s okay.
It’s okay, because we know that human beings can thrive without extremely high levels of GDP.
There’s research to support the unsustainability of growth. The largest consumer of goods is the U.S. If we all consumed as much as an American, we would need four more Earths to sustain us. Even worse, our consumption in the Global North is directly related to the amount of climate-related deaths in the Global South.
At a more basic level, degrowthers oppose productivism (the belief that economic productivity and growth is the purpose of human organization) and argue that sustainable development is an oxymoron.
The problem is that the modern minimalist movement, led by Leo Babauta, The Minimalists, Joshua Becker, Courtney Carver, Marie Kondo, and so forth, overemphasize the personal benefits from living with less.
Instead, I suggest that focusing on the external benefits will reap significant personal benefits. For example, preferring to walk or take public transit over driving your own vehicle directly impacts the amount of carbon emissions that enter the atmosphere.
But, as most us know, this is not just good for the planet. Taking public transportation saves money, is safer and has been linked to healthier lifestyles. Research has also shown that walking (especially in green space) improves your mood, reduces heart disease, and helps you maintain your weight. Cal Newport, author of Deep Work, also encourages going for walks to think through complex problems.
A minimalist economy does not mean we never buy things again or transform into subsistence farmers. Rather, it’s an economic system based on a philosophy that growth is not a solution — it’s the problem.
The Neoliberal Hamster Wheel
Whatever your feelings on capitalism, it’s indisputable that its current neoliberal incarnate has fostered our problem with conspicuous consumption: According to the Bureau of Economic Analysis, consumer spending makes up 68% of the U.S. economy.
Rationally, this leads to a global cycle of exploiting the poor, outsourcing pollution to Global South countries, and making us even more emotionally and financially insecure:
→ Companies locate the cheapest labour in jurisdictions with the weakest workplace laws →
→ Companies double-down on advertising to market an upgrade in social status with their products →
→ We discard existing products that we convince ourselves no longer serve us, increasing our carbon footprint and spending money on unnecessary items that leave us money for savings, emergencies and our retirement →
→ Our waste gets transported (causing more pollution) to domestic landfills that are inching closer to maximum capacity or to countries in the Global South who we pay to take our waste→
→ In response to consumer demand, companies restock their products with minimal pressure to alter their supply chain. →
And the hamster wheel continues.
As you know by now, I’m not an economist, anthropologist or even environmentalist. I’m a concerned citizen who so happens to earn her keep by practicing law.
So let me state the obvious: laws matter. Whether we agree or disagree with some of them, we must all abide by them. And that’s what makes legislation such an effective tool for positive change.
From my cursory understanding of the nature of material throughput, it seems sensible to implement laws that target our consumer rights and corporate transparency. Replicating much of Jason Hickel’s suggestions, some laws may include:
(1) Introducing a carbon tax
In 2008, British Columbia established North America’s first carbon tax. Between 2007 to 2015, the province’s real GDP increased 17% while net emissions declined by 4.7%. This confirms that relative decoupling carbon emissions from economic growth is possible.
(2) Extending warranties on products
So that household appliances such as refrigerators and washing machines last for thirty years rather than ten. Currently, companies offer limited warranties and then ask consumers upon purchase whether they’d like to pay for an extended warranty, which often time we decline.
Instead, we can legislate that companies extend their initial warranties and also make these warranties more robust. In a December 2018 article, CBC wrote that Canadians are often in the dark when they purchase extended warranties. There’s too much fine print and the warranties often fail to cover a whole host of circumstances.
(3) Banning planned obsolescence
France is on the forefront of this issue, and it would do us good to follow in their footsteps. In France, it is illegal for manufacturers to intentionally shorten the lifespan of their products. It was under this law that Apple became the subject of an investigation by France after it admitted that old iPhones were deliberately slowed down.
From 2018 until 2020, French manufacturers are now able to add a sticker to their products identifying both its durability and estimated lifespan. The stickers will sit alongside the products’ energy rating, so that consumers can see the economic and environmental impact of the product.
(4) Introducing a “right to repair” law
Remember when laptops and cell phones had removable batteries and we were able to simply go to the mall and pick up a relatively inexpensive battery replacement? There’s a reason why manufacturers now insist that we bring in our broken products or send it to them to repair: they can overprice the service.
In order for consumers to be able to repair their own appliances, manufactures need to provide five things: replacement parts, specialized tools required for repair, diagnostic software, manuals, and firmware.
By making it much easier and cheaper for us to repair our electronics, we’ll have significantly less incentive to replace them.
(5) Banning food waste in landfills
In 2005, South Korea banned food waste in landfills. In other words, if you don’t separate your food waste from the rest of your waste, you will face potential fines.
Since 2013, South Koreans have also paid for their food waste by weight. The policy began in Seoul and is now in 16 other cities and provinces.
Here’s how it work: South Koreans dispose of their food waste in specific bags obtained from the city, where they’re also assigned a radio frequency ID card. After they tap the card on the bin that you discard your food waste in, it registers the household and the weight of the bag. At the end of the month, depending on how much food a household wastes, they get a bill.
The food waste gets brought to a factory where a machine dries up the food waste in 3 hours and turns it into animal feed.
The impact of this policy are significant. Before it was implemented, Seoul used to spend $600,000 per day on separating food waste in the landfill.
There are also reports that per 1,000 households, about 10% - 15% do not produce any food waste and Seoul’s food waste, in total, has decreased by more than 300,000 tonnes per day.
(6) Banning food waste from supermarkets
In 2016, France became the first country in the world to ban supermarkets from throwing away or destroying unsold food, forcing them to donate it to charities or food banks. This involved making supermarkets over a certain size to sign contracts with charities or face significant penalties. Prior to the implementation of this law, it was reported that supermarkets were intentionally locking their bins or dousing bins with bleach to prevent people from foraging in them.
A few months after France introduced this policy, Italy enacted a similar law that forced supermarkets to donate their unsold food to charity.
(7) Implementing a tax on red meat
The researchers also estimated that in 2020, 2.4 million global deaths will be related to the consumption of red and processed meat.
(8) Develop public infrastructure that incentivizes sharing
Rather than relegating ride-share programs to the private market, public infrastructure can be developed to support the expansion of sharing goods and appliances beyond books (i.e. public libraries), certain activities (i.e. public swimming pools), and transportation (i.e. bicycles, subways, streetcars).
(9) Progressive Taxation
Introduce higher marginal tax rates on top incomes similar to the 70% tax rate rich Americans when Ronald Regan came into office. The additional revenue can be invested in green energy infrastructure, a universal basic income program, or raising the quality of existing public goods and services.
To conclude, my thoughts on this is still evolving, but I find the degrowth movement incredibly persuasive. It gives me hope that people much smarter than me are producing high-quality research on what is required to ensure that we can maintain our standards of living while staying within our planetary boundaries.
E.F. Schumacher was a German economist and protege of John Maynard Keynes. Upon reading Small is Beautiful, I experienced a “view quake” — a concept Tyler Cowen uses to describe a book that shakes your mental foundation. This collection of essays was published in 1973 but it might as well have been written yesterday. Schumacher touches upon a range of subjects but the underlying theme is simple: infinite growth on a finite planet is simply irrational.
This is my favourite podcast right now. In this episode, Preet Bharara interviews a personal literary hero of mine, Robert Caro, author of the Power Broker and the Lyndon B. Johnson biographies. I’m halfway through Caro’s new book, Working, and it’s incredibly inspiring.
For those who follow me on Twitter, I am outspoken advocate of Redemption Paws, a non-profit organization that rescues dogs out of areas affected by climate change and disaster situations. I’ve adopted both of my dogs from Redemption Paws, the first who survived Hurricane Harvey. This extremely insightful and beautifully written article is written by Nicole Simone, founder of RP, in which she makes the case that all dogs deserve to die with dignity.
Some readers have e-mailed me asking how they can support my writing, and I always respond that if they have a few bucks to spare, consider donating to Redemption Paws.
See you next Tuesday.