Stability without Growth: Keynes in an Age of Climate Breakdown

4th December 2018 Off By binary
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[This post by Jason Hickel. He is responding to a post I did on the possibility of having growth in a sustainable economy. I will post a rejoinder later in the week. Jason will then get the last word in this exchange.]

What do Keynesian Democrats think about the movement for post-growth and de-growth economics?  Dean Baker, a senior economist at the Center for Economic Policy Research in Washington, DC, has given us some insight into this question.  In a recent blog post, republished by Counterpunch, he takes aim at two articles that I wrote for Foreign Policy in which I argue that it is not feasible to reduce our emissions and resource use in line with planetary boundaries while at the same time pursuing exponential GDP growth.

Baker agrees – thankfully – that we need to dramatically reduce emissions and resource use to prevent ecological collapse.  But he thinks that this is entirely compatible with continued GDP growth. 

Let’s imagine, he says, that a new government imposes massive taxes on greenhouse gas emissions and resource extraction while at the same time increasing spending on clean technologies, with subsidies for electric vehicles and mass transit systems.  Baker believes that this will shift patterns of consumption toward goods that are less emissions and resource intensive.  People will spend their money on movies and plays, for example, or on gyms and nice restaurants and new computer software.  So GDP will continue growing forever while emissions and resource use declines.

It sounds wonderful, doesn’t it?  I, for one, would embrace such an outcome.  After all, if growth was green, why would anyone have a problem with it?  Baker makes the mistake of believing that degrowthers are focused on reducing GDP.  We are not.  Like him, we want to reduce material throughput.  But we accept that doing so will probably mean that GDP will not continue to grow, and we argue that this needn’t be a catastrophe – on the contrary, it can be managed in a way that improves people’s well-being.

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