Can we stop growing? What would happen?


#1

Hi there,

I’m looking into economic growth slowdown for my master thesis, and could use your help!

Specifically, I’m looking for any research, working papers, academic paper etc on what happens to a country if its economic growth falls.

I’ve seen lots of scary-sounding impact studies of recessions and crises, but I cannot seem to find one where the downshifting was purposeful and phased out.There are also plenty of “limits to growth”-like papers, but I haven’t found any that list the consequences of reducing production & consumption.

I’d like to combine empirics with GAMS modelling to show what could happen to, for example, welfare, employment, consumption, leisure, trade and factor flows. Basically: what would happen to the economy if we landed this plane, at last.

Anything you could think of would greatly help me!

Many thanks,
Irene


#2

The topic of ‘degrowth’ is an important one and I’m glad you choose this topic for your thesis.

I’d be very interested when you’re finished or even if it’s in a draft form for our comments . . . linked to this site.

As far as the issue is concerned regarding the consequences, I would suggest that those scenarios are often made independent of the population growth curve.

In other words, if there’s no reduction in population consistent with reduction in available resources, then indeed there will be significant consequences. This is basic premise of collapse.

This is the predicament we’re in now . . . as political leaders chase unsustainable population growth with calls for more economic growth yet the issue of resource depletion is completely missing from the discussion.

Kate’s book does a good job in grasping resource issues especially energy and I would suggest this read as well:

Another good read that uses modeling to predict outcomes is:

At the end of the day, we either reduce production to the renewable limits in our biosphere or suffer the consequences when population growth eventually overwhelms resources and collapse ensues.

The UCLA anthropologist outlined the results of societies not dealing with resource depletion in his book:

My only suggestion is whatever the results of your efforts, that we make a concerted effort to outreach the general public.

Most of these folks have no idea of their role in this process especially in population growth apart from existing cultural and religious norms.

And if we can’t get people to act appropriately and in their own self interest long term, I don’t see any good outcome . . . that’s why I’m assuming Kate wrote her book.


#3

That is a very interessting and relevant topic!

Although it will not exactly answer your question, I can recommend this book from the Club of Rome, its most recent reflection on Limits to Growth.

https://www.clubofrome.org/2017/10/25/new-report-to-the-club-of-rome-come-on/

Some thoughts that crossed my mind:

If we stop growth in our current system, probably some collapse/crisis scenario would apply, as you already found. So we would have to change the system first.

Now, it may be interessting to look at what organisations/institutions would have to change in order to land the plane and not crash the plane. In other words, what organisations/institutions are most dependent on growth and should prepare for degrowth first…

For example, I know several SME companies that are not depending on growth themselves directly, they would thrive independent of this. But their customers may depend on growth and hence the SME does indirectly as well. The customer is maybe growth depend because of the arrangements it made with a bank. This creates a network/hierarchy system of growth dependency, including companies, banks, governments etc. Mapping this could show what the central actors are creating this growth dependency and where we could lever the system and prepare it for degrowth.

This article by Kate could give a first hint when it comes to preparing for degrowth (see five traits).

https://www.weforum.org/agenda/2018/01/how-to-do-business-with-doughnuts/

Would love to hear whether this makes any sense :wink:


#4

This recent report from monetary reform campaigners Positive Money is directly relevant:

Escaping Growth Dependency: Why reforming money will reduce the need to pursue economic growth at any cost to the environment.

Basically, it identifies our current monetary system as the major barrier to degrowth. Essentially, we depend on debt to create our money supply. New borrowing creates money, while repayments (and defaults) destroy money. At the very least then, we have to borrow enough to provide our economy with liquidity, PLUS pay whatever interest is due - thus requiring the overall economy to grow. The way out of this trap is to directly create money.

The report is 67 pages but it’s quite readable (I know because I proofread it before publication!). Highly recommended.


#5

Interesting question.
Would love to read it after published.
As far as I know, we are the first civilization aware of the problems due growth pursue and therefore able to to something about it and try to avoid the collapse.
In his book “A prosperous way down” Odum provides some insights about how to do the transition in a less traumatic way (https://www.amazon.com/Prosperous-Way-Down-Principles-Policies/dp/0870819089).


#6

The global financial system is entirely predicated on ongoing corporate growth, that’s increasing share prices and dividends to investors.

Most individuals have private pensions and savings plans which require some form of growth in order to protect their capital from inflation.

I can’t see how nil economic growth (in terms of stock market returns) would be possible or even desirable for most of the world’s population.