Review: Can we have prosperity without growth?

This 2020 article by the New Yorker staff writer John Cassidy focuses on the critique of economic growth. The so-called de-growth movement is getting increasingly popular due to climate change and other environmental challenges. Simply put, de-growth means zero or even negative GDP growth to save the planet from humans’ destructive consumption.

De-growth proponents advocate a shift from “mass-market production to local services—such as nursing, teaching, and handicrafts—that could be less resource-intensive.” People should limit their consumption and use local resources in order not to become a bigger burden on our already damaged planet. Even traditional economists are getting critical of governments’ obsession with economic growth and think we should instead “concentrate on specific measures with proven benefits, such as helping the poorest members of society get access to health care, education, and social advancement.”

However, de-growth comes at a great cost to society. As long as GDP grows, one can distribute the additional wealth between citizens. Once growth stops, one citizen’s gain will have to be another one’s loss. De-growth advocates think that “distributional conflicts could be resolved through work-sharing and income transfers.” Some think that a universal basic income can help, or a state job guarantee.

The author is spot-on in recognizing a huge problem with the concept of de-growth: what will happen to developing countries if rich countries suddenly decrease the demand for their products and start going local? In the past decades, hundreds of millions of Chinese and Indians had been saved from poverty, de-growth could endanger all these achievements.

The article presents green growth as a better alternative, since investments in sustainability could create growth while solving environmental problems. Ideas like the carbon tax are found promising: “A carbon tax of this kind would raise a lot of money, which could be used to finance green investments or reduce other taxes, or even be handed out to the public as a carbon dividend.” Similarly, energy efficiency projects such as “insulating old buildings to reduce heat loss, requiring cars to be more fuel-efficient, expanding public transportation, and reducing energy use in the industrial sector” can help the environment without decreasing living standards.

At the end of the article, the author presents society’s appetite for “competitive” consumption as one of the main reasons for the excessive focus on economic growth. He sounds rather pessimistic when he quotes Kate Raworth: “Reversing consumerism’s financial and cultural dominance in public and private life is set to be one of the twenty-first century’s most gripping psychological dramas.”

Verdict: An unusually informative and balanced article that gives a good overview of the de-growth topic

Link to article: https://www.newyorker.com/magazine/2020/02/10/can-we-have-prosperity-without-growth

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