Degrowth is a deranged idea
“Degrowth” – halting global economic growth in order to save the planet – has become increasingly fashionable, says Noah Smith. It is also “a very bad idea”. Why? Because it can never work.
The “massive… reordering of global production and consumption that degrowthers fantasise about is not just… impossible to implement, it’s the kind of thing that essentially everyone… is going to reject”.
Degrowth implies freezing the global economy at this stage, with income per head at an average of $17,000 a year. This means most people in the world would never experience anything near developed economies’ living standards (Britain’s GDP per head is around $30,000); around 25% of the global population earns less than
$2.50 a day ($650 a year).
To avoid condemning much of the world to eternal penury, degrowthers would have to produce an income distribution whereby everyone above the current average is driven down to it, while those below it are allowed to keep growing until they reach it.
But for this to occur, most of the Western population would have to swallow a huge reduction in income. Around 86% of the people in developed countries are richer than the global average.
This is clearly a “political non-starter.” We’re not simply talking about “giving up beef and SUVs”, but accepting big cuts to the size of our dwellings, eating far less and giving up much medical care.
China wouldn’t play ball
A further problem is that cutting living standards in the industrialised world would have little impact on overall greenhouse-gas emissions because most of them stem from emerging markets – China’s CO2 output is greater than those of the US, EU and Japan combined. In fact, its CO2 emissions per dollar of GDP are more than double America’s and five times the EU’s.
China is hardly likely to accept a reduction in its resource-intensive growth to “satisfy the environmentaleconomic diktats of activists” in Europe. In any case, as the pandemic reminded us, sharply squeezing growth in the industrialised world will have knock-on effects in emerging markets. The sharp Covidinduced slump in March 2020 caused a decline in tourism and Western imports in emerging markets. Hunger and child mortality increased. Add it all up and the degrowth movement is a utopian delusion. No matter how “shrilly degrowthers quote apocalyptic projections, the things they call for simply will not happen”.