Advocates of a Green New Deal are for an admirable set of goals which, in general, are taken for granted, can be achieved in a capitalist economy and while the pursuit of economic growth continues. Here is an indication of the main reasons why these assumptions are totally wrong.
The fundamental assumption underlying these beliefs is that economic growth can be “decoupled” from resources and ecological demands and impacts. That is, it is claimed that the rate of production and consumption can continue to increase while the resources needed to do so can be reduced to sustainable levels, along with the environmental damage they cause. This heartwarming faith is widely shared, including by major global institutions.
It is disturbing that this technical faith persists despite the mountain of evidence that it is false. Anyone who is not yet in the know should consult the massive studies by Hickel and Kallis, Parrique et al., and Haberle et al. The second lists more than 300 studies and the third lists more than 850.
There are some areas where production is underway and / or could be with reduced impacts, and the transition to renewables is an important example. But what matters is whether the overall output of an economy can be reduced as its GDP increases, which is “absolute” decoupling. The above reviews categorically conclude that despite constant efforts to increase efficiency and reduce costs there is no absolute decoupling of the use of resources and the environmental impact of GDP growth, and that an increased recycling effort and a transition to “service and information economies” are not at all likely to achieve this. Despite constant efforts to improve productivity and efficiency, overall GDP growth is accompanied by growth in resource use.
The reviews point out that there are no good reasons to expect absolute decoupling in the future; in fact, the trends are getting worse. Decrease in resource sources, decrease in mineral content, increase in energy costs, increase in environmental costs, etc. require more effort and resources to maintain production levels.
The demolition of the decoupling faith has been central to the rise of the Degrowth movement. This emerged from the basic “growth limits” argument put forward by Meadows et al fifty years ago, but largely ignored until recently. There is now an abundant literature and many agencies and conferences are working on the fact that the levels of resource use and environmental impact and therefore production and consumption are now well beyond sustainable levels, and therefore that the only viable solution must be a significant reduction in these levels and in GDP. Capitalism cannot do this.
What very few realize, including most within the Degrowth movement, is the extent of reduction required. My study of the question came to the conclusion that if by 2050 the expected 10 billion people were to reach the per capita GDP that we rich countries would have assuming economic growth of 3%, the per capita consumption of the rich world should be reduced by more than 90%. It’s a measure of how grossly unsustainable our current ways are. But it is worse than that because the arithmetic does not take into account the deterioration in resource availability and environmental conditions that will have occurred by 2050.
So what is the likelihood that technological fixes will reduce impacts to around 10% of current levels when GDP reaches around 2.5 times its current level by 2050?
If these kinds of studies and figures are valid, there can be no other solution than to drastically reduce the levels of production, consumption and GDP of rich countries. It would mean an astronomical change in our current economic, political, social, settlement and cultural systems. It is not possible to imagine social systems that allow a satisfactory quality of life with extremely low levels of material consumption per capita, unless we accept that most of us have to live in small, very small communities. self-sufficient and autonomous, very collectivist and above all content with materially very simple lifestyles. It is not difficult to design a viable alternative Simpler way like this … but it could only work if there was a general and voluntary acceptance of much simpler systems and lifestyles and therefore the abandonment of the pursuit of monetary wealth, property and GDP in constant increase.
This is the general objective that many are working on for the moment, for example within the Degrowth, Ecovillage and Cities in Transition movements. The Dancing Rabbit Ecovillage in Missouri provides an example of a project, with people living 5-10% of the average U.S. resource consumption and having a higher quality of life index than the U.S. average.
Obviously at the moment it’s extremely unlikely that we can get average Australians to listen to all of this, but their problem is to come up with an alternative analysis of the situation and the solution. And let’s see what they think when the limits of the growth noose tighten and the coming mega depression hits. They might then realize that they had better start building local resilience.
Capitalism cannot do any of these. Growth is one of its defining characteristics. These are owners of capital who are constantly looking for investment opportunities for their ever increasing volumes of capital. They have no choice about it; it is to grow or die. If a capitalist does not try to seize or generate more sales opportunities, then his rivals will and lead him to bankruptcy. Capitalists are trapped in capitalism like the rest of us.
But could capitalists compete in a capped system? First, it would not be capitalism; it would be a kind of socialism, and it would soon lead to a company in one area killing the others. If the state stepped in to stop this, it would run the economy, decide which companies should have which stocks, establish a mutually beneficial deal with a privileged few. This is how fascism works.
Capitalism is all about competing in the market. A severely degraded economy should prevent the market from determining important functions. Markets always allocate scarce resources to the rich, simply because the richer can pay more and therefore the capitalists develop industries that will produce what they want. Markets never develop the right industries and never distribute according to morality, justice or the most urgent needs of people, the environment or society. (However, I argue that a good economy might have an unimportant market sector and might leave most of the activities to small private family businesses, farms and cooperatives, operating under strict social guidelines.)
And hardly anyone realizes that a stable economy, let alone a shrunken economy, has no room for interest payments. If at the beginning of a year money is loaned and at the end of the year, in principle more must be repaid plus the interest, then the economy must have growth to allow the accumulation of the increased sum. It’s the same with investing. Capital is only invested in the development of a business if a capital owner expects to get more money from the business than it has invested. other investment opportunities for it. In a stable economy, capital would only be invested in maintaining productive capacity or changing its composition. There is almost the entire financial industry, recently making 40% of American profits.
In an economy that had undergone the enormous level of decline required, there would be very few opportunities for owners of capital to invest, and most productive projects in which to invest would be decided by local communities. There might still be a (small) place for the investment of savings in private companies, but it would be in an economy that is not capitalist. (I support at length that it would not be a socialist society; it would be an anarchist society, mainly composed of the small autonomous communities indicated above, and comprising for the most part private and cooperative production units operating under strict constraints.)
Thus, the objectives proposed by the defenders of the GND are far from being able to solve our problems. They are admirable but constitute mere reform proposals for the social, economic, political and cultural systems which are committed to the pursuit of growth and wealth. This commitment is the fundamental cause of our accelerated descent towards self-destruction. More and more people recognize this and are working on the transition to a simpler post-capitalist path.
Photo: “Make Detroit the engine of the Green New Deal!” rally (2019). Photo by Becker1999 via Wikimedia Commons https://commons.wikimedia.org/wiki/File:Make_Detroit_the_Engine_of_the_Green_New_Deal!_img_100_(34)_(48422992952).jpg