Degrowth by designed disaster?

How the conflation with neoliberalism and austerity unfairly reduces the idea of degrowth to absurdity – and where the degrowth movement can turn for answers to the crisis.

The degrowth movement has been developed in response to neoliberal reality, neoliberalism's comically reductive view of human nature, its ecological blindness and the rise in social inequality it has brought about. Austerity politics embodies one of the most aggressive manifestations of neoliberalism, but curiously, the degrowth movement has been exposed to criticism from the (both liberal and Marxist) Left associating it with such politics. This prompted many degrowth activists to insist that “your austerity is not our degrowth.” Despite the ideological variety and the occasional intellectual ricochets within the movement, I considered this so self-evident that I was somewhat bewildered to see an actual advocate of degrowth openly claim more or less the opposite. In his article on “Austerity and Degrowth” André Reichel attempts to redeem the ideas of neoliberalism and austerity from a degrowth perspective, suggesting that its mode of economic reasoning facilitates a transition to degrowth. I would like to seize this opportunity to reflect on the relationship between capitalism, austerity politics and degrowth.

The crisis as a dilemma for the degrowth movement

Reichel's point of departure happens to be a formidable challenge for the degrowth movement bringing up the following questions: What would be an appropriate degrowth response to the economic crisis in Greece? Could Greece reasonably enter a degrowth path now – or do we have to grudgingly accept the need for growth-oriented Keynesian solutions for the time being, in order to avoid further economic hardship for the Greek population?

Reichel is annoyed by degrowth thinkers willing to support Syriza in its Keynesian policies, complaining that “suddenly growth-oriented policies appear to be OK if they are somehow against 'austerity' or 'neoliberalism'. Can it get, intellectually, any more shallow than that?” (I will pass over both this last remark and his claim that the degrowth community has abandoned “intellectual honesty” in the austerity debate – may this piece double as a reply to that.) While not advocating no-holds-barred neoliberal politics, he maintains that “the original idea of neoliberalism was that all government actions should be made accountable in an economic sense; to pull the rug out under any totalitarian ideologies from the left and the right,” and that “[a]usterity was intended to apply economic reasoning (vulgo 'neoliberalism') to public expenditures and ask 'what economic return is this expenditure creating?'” His argument, then, is that “no stimulus-oriented policy can work within a degrowth framework” whereas some austerity policies, if oriented towards the reduction of resource consumption, might advance the degrowth agenda – including the deregulation of markets and “non-market sectors.”

Which and whose degrowth?

Now, I wonder, in order to make sense of this argument, what is meant by degrowth? Two aspects of the concept come to mind, and neither seems to square with Reichel's case:

a) Technically speaking, the term commonly refers to GDP degrowth, the reduction of total monetized exchange within a given (national) economy with hopefully ecologically beneficial results. This is a quantitative view of degrowth.

In this regard, Reichel claims that his suggested “form of 'ecological austerity' decreases, at least in the short run, GDP levels even more while increasing price levels” [emphasis added]. The highlighted part is important: Austerity policies accept a short-term contraction of the economy, a supposedly curative slimming cure in order to get rid of the “unproductive” weight of the economy.

After that, however, from an aggregate perspective, gluttony will be continued; this, in fact, is the whole point of the venture. Austerity policies are implemented within a capitalist framework, and the sine qua non of capitalism is the accumulation of capital, or at least the opportunity to accumulate. Without it, the whole machine would soon come to a grinding halt. In the long run, austerity policies are aiming at a trimmer, revitalized capitalism which generally allows for “healthy” returns on private investment (to continue the health metaphor) – in another word, growth.

Keynesianism and austerity policies are ultimately just two different strategies to ensure capitalist investment and achieve such growth. The main difference is that in order to get there, proponents of austerity are more willing to sacrifice the economic interests of lower-income groups in order to benefit capital owners, which may incidentally have a positive effect on short-term (!) carbon emissions and other ecological indicators.

b) More abstractly, degrowth presents a socially transformative vision – one that envisions qualitative change. Degrowth thus aims at a “good life” for all and certainly not at more misery under capitalism.

Neoliberalism, by contrast, is all about marketization and pure economism, based on an understanding of all human interactions as motivated by individual utility maximization. (In this sense, by the way, neoliberalism itself is a “totalitarian” ideology.) It is literally antithetical to degrowth, as it can only imagine a better life for all through economic growth, expressed by the idea – proven wrong by history – that “the rising tide lifts all boats,” i.e., that growth will ultimately benefit everyone.

Besides, degrowth thinkers commonly propose some form of collective self-determination, often at the local level, as an integral part of the “good life”: communities should decide about the economic structures they want. Most austerity regimes, as exemplified by the case of Greece, have been imposed from above – not even by elected national governments (at least not those of the countries the policies are being applied to) but by not democratically accountable supranational bodies.

Against this background, Reichel's above-cited definition of austerity, and its association with degrowth, is self-defeating. First, by equating economic reasoning with neoliberal reasoning, he offers a very narrow understanding of economics, which is then defined as the yardstick of all public policy (so much for neoliberalism's “anti-totalitarianism”). Eventually, from this perspective, how would “economic return[s]” be measured authoritatively – if not through GDP”? The chasm between this intellectual edifice and the idea of degrowth still appears unbridgeable, Reichel's efforts notwithstanding.

In this light, it isn't surprising that he doesn't come up with many ideas about what “ecological austerity” may comprise. Arguably, much government spending is absolutely dispensable from a degrowth perspective (the military budget being the largest and most obvious chunk, but subsidies for highways, airports, nuclear and coal energy, factory farming etc. are equally redundant), and a lot of recent Keynesian spending has been ecologically insane. So, yes, there is much to cut out here, but this has little to do with either the idea of austerity or its real-world application, neither of which has ever been ecologically or socially oriented. Fittingly, the resources taxes which are Reichel's main proposal for “ecological austerity” are not really taken from the austerity playbook. If anything, they speak of a Keynesian approach to demand management, except that in Greece it would be precisely mistimed now. (And pro-cyclical application by itself doesn't make a policy an austerity measure, let alone an ecological one.) So, using the term “austerity” to describe this hovers somewhere between factually wrong, unwisely labeled and dangerously misleading (in so far as it may help legitimizing “real” austerity by means of greenwashing).

But more importantly, Reichel's perspective on austerity, neoliberalism and degrowth remains remarkably “classless.” Even the more critical passages – which certainly exist in his article – frame the negative aspects of neoliberalism in terms of the (neglected) “good of society,” with the rhetorical question “who is happy when income and sales taxes go up and wages go down?” Society here appears as an amorphous middle-class mass, but arguably, the effects of “actually existing” neoliberalism come with a class differential, favoring those best-equipped to compete in labor markets and undermining economic security for most others.[1]. Austerity has always been deployed to redistribute wealth and income from poorer to wealthier parts of the population. Likewise, Reichel's suggested resource taxes, albeit no classical austerity policies, would particularly burden the poor.

I emphasize this point because a similar middle-class bias characterizes much of the degrowth discourse, in which the importance of middle-class concerns such as “work-life balance” is frequently stressed and reference to the “common interests” of society is made without considering existing class differences. The example treated in this article illustrates what a slippery slope such a bias may become. Degrowth is not a purely technical matter, and economists' “neutral,” macroeconomic perspective is deceptive. Without awareness of social inequality, the “good life” for all will remain elusive. Those degrowthers who, to Reichel's dismay, side with the Keynesian Left rather than the neoliberal Right in Greece and elsewhere seem to understand this very well.

How, then, to degrow?

Of course resource use must be decreased, but when restricting our “economic reasoning” here to market solutions, we will not get very far, not least because in a capitalist market framework, the long-term assumption is always growth. Production in a market economy is bound to be ecologically inefficient as it is determined by the prospect of profits, the satisfaction of human needs being only incidental. Reichel's “ecological austerity,” even though he stresses that it should only be used moderately, would be an attempt at solving the problem backwards (remember, it “decreases … GDP levels even more while increasing price levels”). Only by making it impossible for many people to satisfy their needs on the market, one could hope to cut down resource use this way. As the Greek example shows, while a naïve environmentalist may wish the first “need” to go unsatisfied be somebody's redundant SUV or oversized flat-screen television, under “actually existing” austerity it may as well be your grandmother's basic medication (or her groceries, if her utility-maximizing decision as a market participant is to rather go hungry than sick). No word of such misery – currently visible in Greece – appears in Reichel's piece.

At the same time, Reichel rightly suggests that Keynesianism has no real answers to the multiple crises of capitalism and offers little in the way of a transformative vision. Significant parts of the Left simply reproduce the dual categories provided by mainstream thought, which meanders between the alternatives of neoliberal fiscal conservatism and Keynesian social democracy – both of which have produced theses crises and neither of which provides a stable framework for the “good life” for all or is ecologically sustainable.[2]. More abstractly, this leaves us with a false dichotomy between market and state – false because both approaches really rely on both institutions, and false because our choices need not be limited to these. The only chance we have for degrowth in a qualitative sense is to look beyond state and market and take on both.

This means that non-market means of satisfying material needs deserve political support, as commonly demanded by the degrowth movement. Reichel acknowledges this when he argues that “'deregulation' would have to be extended to non-market sectors like community farming, makerspaces and repair initiatives, as well as LETS [local currency systems].” I assume that by 'deregulation' he means improving the legal status of such projects vis-à-vis the formal market economy, addressing liability concerns and other issues that make such experimentation less feasible. But as Marx famously pointed out, “between equal rights force decides.” Having to compete with market actors on the latter's terrain, particularly if it is “deregulated,” such alternative projects are always marginalized, threatened to be crushed by market forces at any moment – or, little better, coopted and perverted by the market (consider, for example, the commercialization of once community-oriented “share economy” ideas – where couchsurfing becomes “Airbnb”). The totalitarian aspect of the market is in its ever-expansive tendency. There is no cosy coexistence between neoliberal practice and alternative economic structures. Such alternatives can only be established in a struggle to roll back capitalism. And as the principles of self-organization and self-empowerment inherent in most of these initiatives also tend to conflict with the top-down logic of the state, including the Keynesian welfare state, such alternative structures will ultimately also have to be established against the state.

Struggling for degrowth in an age of crisis

Clearly, austerity will not effect long-term degrowth, except if it goes wrong – and then only in a quantitative sense, through a prolonged recession, a fundamental capitalist crisis which forces economic hardship on a large part of the population. This is extremely unlikely to bring us any closer to degrowth in a qualitative sense, and it isn't exactly a promising advertising strategy for the movement either. (“You will suffer, but your boss and Mother Nature will thank you!”)

For all these reasons, the degrowth movement should remain wary of any association with austerity politics. Such cooptation, as bizarre as the mere idea may seem, may turn it into the hip, creative, green veneer of political forces that share none of its social and ecological goals. “Degrowth by design, not disaster” is a frequently cited slogan. If anything, austerity offers degrowth by designed disaster, and from all I've heard, I'm confident that this is not what this movement is going for.

To what extent it makes sense, then, in the short term, to settle for Keynesian approaches, is another question. For what it's worth, it seems perfectly consistent for degrowth activists to reject cuts in social programs leading to increased poverty, and some stimulus investments might at least improve infrastructures necessary for a degrowth society (e.g., public transportation systems). While people still have to depend on market provision of goods (remember that capitalist economies make it extremely hard to simply withdraw from the market overnight even for those who are willing to do so), welfare programs are essential to avoid humanitarian catastrophes. Certainly, simple cherry-picking among Keynesian instruments – as Reichel is trying to do with austerity measures – will not take us very far, but given the current situation in Greece, it would be cynical to sacrifice human lives for putative ecological benefits, standing by as conservatives force the wrong sort of “degrowth” on the wrong people at the wrong time.

From every conceivable angle (politically, morally, environmentally, you name it), aligning with the Right is nonsense. If pushing for degrowth in this situation, as in any other, it should be the socially transformative kind. On the Left, we can at least hope to convince the mainstream that degrowth could actually lead to economic security for all, in a very real sense. In Greece as well as in Spain, the crisis has already sparked many projects aiming at self-organized, ecologically sound provisioning beyond market and state. If we want to protect such promising initiatives from the pressure of markets and foster the prospects of a real degrowth transition, it will be necessary not only to pressure the establishment Left to abandon its social-democratic nostalgia – but also to confront with resolve the European regime of austerity, which, as it reinforces the brutal logic of capitalism, currently leaves even leftist governments little leeway to protect anyone or anything from market forces.[3].

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[1]Although drastic austerity politics, as in the case of Greece, also have a tendency to catapult solidly middle-class families into poverty and homelessness overnight, thus effectively shrinking the middle class. The effects are obviously not neatly differentiated according to previous class status.

[2]From a global perspective, Keynesian social democracy only ever benefited parts of the global population at the expense of others, which is part of its politico-economic DNA – the working and middle classes of Western economies having traded their consent to global capitalism for relative economic privilege vis-à-vis the impoverished masses of the global “South.” Even if it was politically possible to truly “globalize” Keynesianism, this would quickly collide with planetary boundaries.

[3]That the EU currently pressures Greece to solve the so-called European “refugee crisis” more or less on its own under conditions of austerity obviously complicates matters even further, but that's another story.