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Learning to shrink
by Philipp T. Hinz
Friday Jul 23rd, 2021 11:16 AM
An economy that does not grow can nevertheless always change and even improve in the process. It can become more ecological, for example. Last year, for example, CO2 emissions fell by almost six percent - more than at any time since the Second World War. A shrinking economy can make its players even happier. For example, because people work less and spend more time with their families.
Learning to shrink
Economy Corona has shown that it is possible without growth. We must use this experience for the ecological turnaround
By Philipp T. Hinz
[This article published in July 2021 is translated from the German on the Internet,]

It almost seems as if an endless yearning for consumption has reared its head over the past 500 days. That's over now: Finally, we can go shopping again, drink in beer gardens, and - because Germans are known to be world champions at this - travel. Now it's time to spend what has been piled up over the last year and a half. Finally, coma consumption again! Quickly call your travel friend and ask: Ad-hoc flight to Palma de Mallorca?

No, she doesn't like it anymore, she really doesn't have to. Especially not for a long weekend. Have I learned nothing at all in the last year and a half?

I feel caught: wasn't I ashamed of my excessive mileage account even before Corona? And even during the crisis, was I constantly raving about the decelerated, introspective lifestyle? The opening-consumption orgy trap still snapped shut. Finally living like before. Finally consuming again as before. Finally traveling like before. But is it really desirable to continue exactly as we left off? Of course not.

For example, Costa Rica
Corona has shown irrevocably that living with less of everything is possible without threatening our "civilization" with immediate collapse: the heavy machinery in the thousand-square-meter gym could be replaced by a few elastic rubber bands on the door handle at home. The cars stayed in the parking lot and the planes on the ground. Radical experiences in a world where progress is measured primarily by economic growth. In the end, the gross national product always somehow has the last word on politics, the economy and society. Growth compulsion or growth fetish is what this is called.

And now we learn: An economy that does not grow can nevertheless always change and even improve in the process. It can become more ecological, for example. Last year, for example, CO2 emissions fell by almost six percent - more than at any time since the Second World War. On top of that, a shrinking economy can make its players even happier. For example, because people work less and spend more time with their families.

The idea of a fundamental "growth critique" is, of course, much older than the pandemic: As early as 1974, the economist Richard Easterlin recognized that above a certain threshold, more material prosperity no longer automatically means more individually perceived satisfaction. Costa Rica is often cited as an example here, where people have only a quarter of the purchasing power as in Singapore, but are nevertheless just as happy. The economy of this small Central American country is now considered one of the most ecological in the world. The country invested in reforestation early on and used massive amounts of taxpayers' money for this purpose. Community and family also have a particularly high priority and thus contribute significantly to the top position in the so-called Happiness Index.

Criticism of consumption is much older than criticism of growth. When the first machine parks led to an explosion in productivity and the beginnings of modern mass consumption during industrialization, the Norwegian economist Thorstein Veblen was already talking about "consumption of value" in 1899.

Almost a hundred years later, when the critique of consumption in the Western industrialized countries was given a mass basis by the 68ers, the Briton Fred Hirsch described this dynamic as "competition for position": people were constantly striving for more income, above all in order not to fall apart in the competition with others: The Rolex watch - or when consumption and identity merge into one word. In any case, many consumer goods would only have a symbolic function. However, with a fatal inverse: If you don't express your love in the form of roses, rings or trips, your love doesn't exist or is at least worth less. This leads to a vicious circle of acceleration, consumption and alienation.

Leading German post-growth economist Niko Paech even claims in our day that the pursuit of growth irretrievably depletes our planet's resources even if that growth is achieved in a "decarbonized," "sustainable" or "green" manner. While Klaus Töpfer, a long-time environmental politician, says that environmental protection can be "decoupled" from economic growth by means of a consistent circular economy, Paech calls for a fundamental departure from the growth cycle. This would first require a fundamental change in thinking: frugality. People will be able to afford less overall, but this should not be perceived as a renunciation, but rather as a liberation from sensory overload.

Paech sees "cheap money" from the central banks as the cause of over-indebtedness and inequality, and instead wants to distribute wealth better, for example through wealth levies and regional currencies. Gainful employment could be reduced to 20 hours per week and distributed more evenly.

Unpaid work in the home and in the community should be upgraded. Consumer goods should be shared more and repaired by people themselves - the keyword here is the share economy. The economy as a whole should function more regionally and independently. Products should be avoided that cause major ecological damage or social upheaval, or that are pure luxury. For example, mangos, feed imports for the meat industry and, of course, vacation flights.

If these ideas seem too radical, it only proves how all thought and action has already been subjected to the dictates of growth and consumption. Paech has been developing his ideas since the dramatic experiences of the financial crisis and comprehensively recorded them in his 2012 work Liberation from Abundance. But as early as 1957, the so-called inventor of the social market economy harbored very similar post-growth fantasies. Ludwig Erhard wrote in his classic Wohlstand für alle (Prosperity for All): "We will even certainly reach the point where the question will rightly be asked whether it is still useful and right to produce more goods, more material prosperity, or whether it does not make sense to gain more leisure, more contemplation, more leisure and more recreation by foregoing this 'progress.'"

More consumption, more happiness?
It may be surprising with what "certainty" and conviction Erhard believed that renunciation would become suitable for the masses. Especially since at that time it was not even remotely foreseeable that Venice, Miami, the Maldives and 80 to 90 percent of the beaches could be washed away by rising sea levels. (The climate had been cooling for a long time after the Second World War due to the large-scale destruction of wealth and economy).

Instead, despite the immanent climate crisis, Erhard's prophecy seems more revolutionary today than ever. A sad example of this is the smoldering discussion about a ban on short-haul flights: Still, it seems, a further per capita accumulation of air miles is seen as more beneficial to society than a forced reduction of such. How else could it be explained that the Greens are being branded as the ban party for their "outing"? How macabre would it have struck Ludwig Erhard that it was precisely an organization with the name Initiative Neue Soziale Marktwirtschaft that started the smear and ban campaign?

Didn't we just learn during the crisis that it is also possible to live very well without flights? By crippling retail and vacation travel, Corona has achieved something that was previously unthinkable: that shrinking the economy can be politically enforced to achieve a higher collective good: in this case, health. Consumption and growth were stifled to save human lives (and, in the last instance, social peace). Actually, this motif could be applied to ecological issues in exactly the same way. The problem is that the loss of human life is not (yet) happening on our own doorstep. Therefore, it will probably continue in such a way that the Greens, on the one hand, demand a flight ban for the purpose of environmental protection, but, on the other hand, represent the social group that flies the most. Similarly contradictory results were obtained in a study according to which half of Germans can theoretically imagine foregoing a flight in favor of the environment, but only a fraction of them have actually switched from air to rail. The situation is different, however, for meat substitutes and organic foods, which are becoming popular. Unlike the switch to rail, this trend did not require a decree. Perhaps because their own advantage is in the foreground: lowering cholesterol levels with tofu and avoiding the fishmeal taste of laying hens' eggs with regional organic eggs.

Instead, environmental protection primarily brings collective advantages. Here, the individual benefits when everyone else does without. Economists call this a free-rider problem: The free rider benefits when everyone else plays by the rules except himself. A tax fugitive can walk across bridges and sidewalks only as long as others use their taxes to enable their construction and maintenance. The U.S. benefits when everyone else abides by the climate change agreement except itself. In order for everyone to collectively forego to gain a collective advantage, the foregoing must be collectively wanted and free riders must be punished.

Corona - that was a radical post-growth experiment. Now it looks as if everything will continue exactly as it was before the pandemic. But the questions have been asked: Is more consumption always more happiness? Am I willing to voluntarily practice renunciation and frugality? And if the answer is soon yes, then perhaps the post-growth society won't take another hundred years. Because it will certainly come. Ludwig Erhard already knew that.

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