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Shrink or Die?
by John Bellamy Foster
Thursday Jun 24th, 2021 10:34 AM
Shrinkage means the voluntary downsizing of the national economy, including a reduction in gross domestic product. "Voluntary" here indicates a preference for voluntaristic solutions - though not as individualistic and unplanned as in the Voluntary Simplicity movement in the U.S., where (usually higher-earning) individuals individually decide to opt out of the existing, consumerist market model.
SHRINK OR DIE?
By John Bellamy Foster
[This article published in March 2011 is translated from the German on the Internet, https://www.zeitschrift-luxemburg.de/schrumpf-oder-stirb/.]

Socio-ecological restructuring, lifestyles, growth critique, natural relations

Recently, leading scientists established nine "thresholds" for our planet. Three of them - for climate change, biodiversity, and the nitrogen cycle - have already been exceeded, while we are steadily approaching others, such as for freshwater consumption and ocean acidification. Ecologically, the economy has developed an uncanny scale and intrusiveness. It is pushing planetary limits and disrupting the planet's biogeochemical cycles. As a result, the economic growth paradigm of modernity has once again come under fire. In Europe, a major intellectual movement reviving radical green thinking emerged in 2008. It became known as Degrowth Economics; it is particularly associated with the work of Serge Latouche.

Ironically, the meteoric rise of degrowth (English: degrowth, French: décroissance) in the last three years has overlapped with economic crises and stagnation the likes of which we have not seen since the 1930s. The idea of degrowth forces us to ask whether such is feasible in a grow-or-die capitalist society - and if not, what that means for the transition to a new social order.

According to the website of the European Degrowth Project (http://www.degrowth.eu), shrinkage means the voluntary downsizing of the national economy, including a reduction in gross domestic product. "Voluntary" here indicates a preference for voluntaristic solutions - though not as individualistic and unplanned as in the Voluntary Simplicity movement in the U.S., where (usually higher-earning) individuals individually decide to opt out of the existing, consumerist market model. For Latouche, shrinkage represents a major social change: a radical reversal from growth as the main goal of modern economics to its opposite.

FALSE PROMISES
One premise of the shrinkage movement is that, in the face of planetary ecological catastrophe, the promise of green technology has proven false. This can be attributed to the Jevons Paradox. It states that greater efficiency in energy and resource use leads not to environmental protection but to greater economic growth and thus to more pollution. The inevitable conclusion of a wide variety of economic and environmental policy thinkers is that a drastic change is needed in the development trend that has existed since the Industrial Revolution (for example, Paul Sweezy as early as the 1980s, see Monthly Review 6/1989). This is in line with the demands of the ecological economist Herman Daly, who has been emphasizing the need for a static economic model for some time - in recourse to John Stuart Mill's concept of the "Stationary (or Static) State". He argues that when growth levels off (which is what classical economists assume), the economic development of society can be shifted toward the qualitative aspects of life, rather than focusing solely on quantitative expansion.
The view that the growth of overdeveloped economies should be stopped or that they should even shrink goes back to Nicholas Georgescu-Roegen and his book The Entropy Law and the Economic Process (1971). Shrinkage as such, however, is not seen as a permanent solution even by its proponents. It is merely a way to reduce the size of an economy to a level of output that can be sustained in a static economy. For large economies, this would mean shrinking by up to one-third of current levels.

OPPOSITION
Admittedly, this would not be easy to implement in today's capitalist economic system. Latouche's work, which has been influential for the European degrowth project, remains contradictory on this point - not because of the idea of shrinkage per se, but because of the attempt to get around the problem of capitalism. For example, under the title "The Globe Downshifted," Latouche (2006) writes, "A society based on economic shrinkage cannot exist under capitalism. However, capitalism is a misleadingly simple word for a long and complex story. Getting rid of the capitalists, abolishing wage labor and money, and banning private ownership of the means of production would throw society into chaos. It would involve large-scale terrorism [...] We need to find another way out of development, economism (the belief in the primacy of economic factors), and growth: one that does not mean abandoning the social institutions that the economy has assimilated (money, markets, even wages), but that re-embeds them according to other principles."

In this way, Latouche attempts to draw a line between the shrinkage project and the socialist critique of capitalism. According to him, (1) environmentally sustainable capitalism is at least theoretically conceivable; (2) Keynesian and "Fordist" regulatory approaches associated with social democracy can tame capitalism and lead it down the virtuous path of eco-capitalism; and (3) shrinkage is not aimed at breaking down the dialectic of capitalist wage labor or interfering with private ownership of the means of production. In other writings, Latouche argues that shrinkage is compatible with progressive valorization (such as increasing capitalist surplus value) and material equality is unattainable. Latouche explicitly argues for what he calls a "reformist solution" to the environmental problem, in which the internalization of the external environmental costs of the capitalist economy will eventually result in revolution. Ironically, this stance is identical to that of neoclassical environmental economics. In contrast, ecological economics assumes precisely that internalization of environmental costs into the current capitalist economy is not possible.

THE CLASS QUESTION
As the Greek philosopher Takis Fotopoulos critically notes, proponents of the shrinkage idea describe the ecological crisis itself "as a general problem facing humanity due to the deterioration of the environment, without mentioning that this crisis has very different implications for different classes. For example, the economic and social consequences of the ecological crisis are primarily paid for by the destruction of lives and livelihoods of the lower social classes-whether in Bangladesh or in New Orleans-and far less by the elites and the middle class."

Shrinkage theory - at least in Latouche and others - attacks economic growth alone, not capital accumulation. It is difficult for its proponents to face the real-world economic crisis and stagnation that exists today, which has led to unemployment and a process of economic decay not seen since the 1930s. The Degrowth Declaration adopted in Barcelona in March 2010 simply stated: "So-called anti-crisis measures to promote economic growth will worsen inequalities and environmental conditions in the long run."

Faced with a shrinking economy in 2008/9 and the environmental need to sustainably reduce growth, economist Joan Martinez-Alier, who recently joined the degrowth movement, proposed a short-term Keynesianism, or "Green New Deal." Government investment in green technologies and infrastructure would be used to spur economic growth and stem rising unemployment. This proposal is understood to be compatible with the idea of contraction, as long as such green Keynesianism becomes the benchmark for continued economic growth. Instead of developing a concept of how to create jobs conducive to a more sustainable society, shrinkage theorists prefer to call for radically shorter working hours and to separate the right to remuneration from gainful employment (by demanding a guaranteed basic income). This is to allow the economic system to shrink and, in parallel, for all families to have a guaranteed income - while leaving the basic structure of capital accumulation and the capitalist market untouched.

It is difficult to imagine the implementation of reductions in working hours and a citizen's income other than as elements in the transition to a post-capitalist (i.e., socialist) society. As Marx noted, the rule of capital is: "Accumulate! Accumulate! That's Moses and the Prophets!" To break with the capitalist law of surplus value or to fundamentally challenge exploitation through labor (both of which would be threatened by a sharp reduction in working hours and a guaranteed basic income), the larger question of systemic change must be asked. But this is apparently to be avoided. A meaningful approach to creating a new society, moreover, would have to provide not only income and leisure, but also satisfy the human need for useful, creative, non-alienated work.

SHRINKAGE AND THE SOUTH
Even more problematic is the attitude of shrinkage theorists toward the global South. "Shrinkage," writes Latouche (2004), "must apply to the South as much as to the North if the attempt is to have any chance of keeping Southern societies from running blindly into the dead end of the growth economy. As long as this is still possible, they should aim not at development but at liberation - and remove the obstacles that prevent them from developing differently [...] The countries of the South must break free from their economic and cultural dependence on the North and rediscover their own history." Through the apparent absence of an adequate theory of imperialism, and in the absence of any reference to the vast gulf of inequality that separates the richest from the poorest states, Latouche reduces the immense problem of underdevelopment to one of cultural autonomy and submission to the Western fetish of growth.

In contrast, Herman Daly writes, "It is a waste of time and morally wrong to preach the salvation doctrine of static economics to underdeveloped countries before the overdeveloped states have even taken steps to curb their population growth or their per capita resource consumption. [...] An important force needed to drive overdeveloped countries toward a static economy is 'Third World' outrage at their overconsumption [...] The starting point of development economics should be the 'impossibility theorem' [...] that a U.S.-style high-consumption mass-consumption economy is impossible for a world of 4 billion people, and, even if miraculously achieved, it would be short-lived." (1977, ch.7) The assumption that the shrinkage idea can be applied equally to the rich countries of the center and the poor countries of the periphery is fundamentally wrong. Most countries in the South, with their low per capita income, cannot afford to shrink their economies. They need sustainable development that helps meet basic needs, such as access to water, food, medical care, education, and so on. This requires a radical change in social structures - away from the production relations of capitalism/imperialism.

CO-REVOLUTION
It is undeniable that economic growth is mainly responsible for ecological decay. However, to ground one's entire theory in the overthrow of an abstract growth society is to lose all historical perspective and to discard hundreds of years of social science. As important as the shrinkage idea is ecologically, it can only be truly meaningful as part of a critique of capital accumulation and a transition to a sustainable, egalitarian, communal social order in which united producers regulate the relationship between nature and society in the interest of succeeding generations and the earth itself.

What is needed is a "co-revolutionary movement" (David Harvey) that brings together critiques of anti-environmental growth (along with associated movements) with traditional critiques of capitalism and critiques of imperialism, patriarchy, and racism. In the general crisis of our time, such an overarching, co-revolutionary movement is quite conceivable. Its goal would be to create a social order in which the increase in the value of capital no longer dominates society. "Socialism is useful," wrote Ernst Friedrich Schumacher in Small is Beautiful, precisely because it creates the possibility of defeating "the religion of economics"-the "modern tendency toward total quantification at the expense of an appreciation of qualitative differences" (1973, ch. 17).
In a sustainable social order, people from the more affluent economies (especially those from high income strata) would have to learn to make do with fewer consumer goods. At the same time, the satisfaction of real human needs and environmental sustainability could become fundamental principles of a coexistence that brings human reciprocity and qualitative improvements, even abundance. Such a strategy is compatible with the aspiration to provide people with meaningful work that is not dominated by blind fixation on productivity. In this sense, the ecological struggle must be oriented not just abstractly toward shrinkage, but more concretely toward de-accumulation-that is, away from a system oriented only toward the endless accumulation of capital. In its place should be a new co-revolutionary society that addresses the needs of people and the environment.
Abridged and edited version of "Degrow or Die?" published in Red Pepper (online), November 2010. Translated from English by Claudia Taudte.

LITERATURE Daly, Herman, 1977: Steady-State Economics: The Economics of Biophysical Equilibrium and Moral Growth, San Francisco.
Latouche, Serge, 2004: Why less should be so much more: Degrowth economics, in: Le Monde diplomatique, Nov. 2004 [Engl. Ausg.] (Engl. Minuswachstum: Die falsche Kritik der Alternativökonomen, in: Le Monde diplomatique/dt. Ausg., Nov. 12, 2004)Ders., 2006: The Globe Downshifted, in: Le Monde diplomatique, Jan. 2006 [English ed.], online: http:// mondediplo.com/2006/01/13degrowth (Jan. 28, 2011)
Schumacher, Ernst Friedrich, 1973: Small Is Beautiful: Economics As If People Mattered, London (Engl. Small is beautiful: Die Rückkehr zum menschlichen Maß, 3rd ed., Bad Dürkheim 2001)
| Journal LuXemburg - Social Analysis and Left Practice
John Bellamy Foster is a writer and editor for Monthly Review .
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Degrowth economics. Why less should be so much more (Nov 2004)Serge LatoucheThursday Jun 24th, 2021 5:03 PM
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