Degrowth: Is it time to live better with less? | CNBC Explains

Summary

Over 1,100 economists and activists advocate for 'degrowth', a movement challenging the pursuit of endless economic growth. They propose a shift towards prioritizing happiness and health, suggesting rich countries reduce inequality and resource use while low-income nations sustainably grow. Degrowth aims to reject constant expansion, focusing on necessary sectors like public transport and renewable energy, contrasting with unplanned recessions. Despite the 2020 economic downturn, degrowth supporters see a planned, equitable contraction as the solution, not a crisis.

Takeaways

• 🌱 The concept of 'degrowth' challenges the belief that economic growth is always beneficial, advocating for a focus on quality of life over constant expansion.
• 🌐 Over 1,100 economists and activists from 60+ countries support degrowth, aiming to shift economic systems to prioritize well-being and sustainability.
• 📉 Degrowth proposes that rich countries should reduce inequality and resource consumption, while allowing low-income nations to grow sustainably until they reach parity with middle-income countries.
• 💡 Proponents argue that instead of growing all sectors indiscriminately, there should be a focus on essential sectors like public transportation and renewable energy.
• 📈 Critics are concerned about the risks of a slowing economy, pointing to the 2020 economic downturn as a cautionary example.
• 🔄 Degrowth advocates differentiate their approach from recessions, emphasizing that degrowth is a planned, equitable contraction, unlike the unplanned and inequitable nature of economic crises.
• 🌿 The movement's roots can be traced back to the 1970s, with the publication of 'Limits to Growth' and French philosopher Andre Gorz's introduction of the term 'décroissance'.
• 🌍 The United Nations has recognized the climate emergency as a defining issue, with the necessity of reducing global emissions to zero by 2050 to limit global warming.
• 🌿 The Covid-19 pandemic led to a temporary decline in global emissions, but pollution levels rebounded as economies reopened, indicating the need for sustained, systemic change.
• 🏛️ Some countries like Scotland, Iceland, and New Zealand have started prioritizing well-being over economic growth, reflecting a potential shift in global priorities.

Q & A

What is the main argument against pursuing economic growth at all costs?

The main argument is that relentless economic growth can lead to environmental degradation and social inequality, and that the focus should be on improving people's happiness and health rather than just increasing GDP.

What is the concept of 'degrowth'?

'Degrowth' is an economic and environmental movement that advocates for a reduction in consumption and production, with the goal of improving well-being and reducing environmental impact.

Why do degrowth advocates believe GDP is not a good measure of progress?

Degrowth advocates argue that GDP does not account for factors like environmental degradation, income inequality, and well-being, and thus should not be the sole indicator of a country's economic health.

What measures might rich countries take to reduce inequality according to degrowth principles?

Rich countries might implement job guarantees, reduce working hours, and potentially introduce a universal basic income to address inequality.

How does degrowth propose to tackle the idea of constant economic sector growth?

Degrowth suggests focusing on sectors that improve public welfare and sustainability, like public transportation and renewable energy, rather than growing sectors like arms and automotive industries.

What are the potential risks associated with a slowing economy according to degrowth critics?

Critics of degrowth worry about economic contraction leading to job losses, reduced standards of living, and increased inequality.

How do degrowth proponents differentiate their planned contraction from a recession?

Degrowth proponents argue that their planned contraction is equitable and intentional, focusing on well-being and sustainability, whereas a recession is unplanned and can exacerbate inequality and reduce well-being.

What is the stance of degrowth on personal income in rich countries?

Degrowth does not call for a reduction in personal income; instead, it emphasizes that rich countries have enough resources to ensure a good life for everyone.

When did the degrowth movement first gain prominence and who was involved?

The degrowth movement first gained prominence in the early 1970s, with French philosopher Andre Gorz coining the term 'décroissance' in 1972.

What was the main prediction of the 'Limits to Growth' report published by the Club of Rome?

The 'Limits to Growth' report predicted that civilization could collapse in the 21st century due to the unsustainable nature of continuous industrial growth.

How does the United Nations view the environmental crisis in relation to economic growth?

The United Nations recognizes the environmental crisis as the 'defining issue of our time' and calls for global emissions to be cut to zero by 2050 to limit global warming.

Outlines

00:00

🌱 The Degrowth Movement: Challenging Economic Growth

This paragraph discusses the concept of 'degrowth', a movement that questions the traditional belief in constant economic expansion. Over 1,100 economists, scholars, and climate activists have called for an end to the capitalist system's relentless pursuit of growth, advocating instead for a focus on well-being and sustainability. The paragraph explains that degrowth aims to shift the economic system's focus from GDP to people's happiness and health. It suggests measures such as job guarantees, shorter workweeks, and universal basic income to reduce inequality in rich countries, while allowing low-income countries to grow sustainably. The degrowth movement also critiques the constant expansion of all economic sectors, proposing a focus on public transportation and renewable energy instead. Critics are concerned about the risks of a slowing economy, but degrowth proponents argue that their approach is a planned and equitable contraction, unlike recessions that can worsen inequality. The paragraph also touches on the historical roots of degrowth, dating back to the 1970s with the work of French philosopher Andre Gorz and the Club of Rome's 'Limits to Growth' report, and highlights the increasing relevance of degrowth in the face of the climate crisis.

05:03

🌍 Climate Change and the Pursuit of 'Green Growth'

The second paragraph addresses the global response to climate change, emphasizing the need for significant societal changes to reduce carbon emissions. It notes the temporary reduction in emissions due to the COVID-19 pandemic and the subsequent rebound, highlighting the International Energy Agency's warning about the urgency of addressing climate change. The paragraph contrasts the 'degrowth' approach with the 'green growth' policies adopted by the U.S. and European Union, which focus on renewable energy and carbon emission reduction without necessarily challenging economic growth. It mentions that some countries, like Scotland, Iceland, and New Zealand, have started prioritizing well-being over economic growth, suggesting a potential shift in global priorities. The paragraph ends with a call for viewers to engage in the discussion about the importance of economic growth and to subscribe for more content.

Keywords

💡Economic Growth

Economic growth refers to the increase in the production of goods and services by an economy over a period of time, often measured by the rise in gross domestic product (GDP). In the video, the traditional view of economic growth as a positive and necessary pursuit is challenged, with the script highlighting how it has been questioned by economists and activists post-pandemic, who argue for a different economic model that prioritizes well-being over endless expansion.

💡Degrowth

Degrowth is a concept that advocates for the intentional reduction of economic activity to ensure that life is at the center of economic systems, focusing on happiness and health rather than constant expansion. The video discusses how degrowth challenges the long-held belief in perpetual growth, suggesting a shift towards sustainability and equality, as exemplified by the open letter signed by economists and activists calling for an end to growth at all costs.

💡Gross Domestic Product (GDP)

GDP is a standard economic measure of a country's economic health, reflecting the market value of all goods and services produced within a territory over a specific period. The video critiques the reliance on GDP as a proxy for progress, suggesting that it does not account for well-being and environmental sustainability, which are central to the degrowth philosophy.

💡Inequality

Inequality refers to the unequal distribution of resources, opportunities, and outcomes among different segments of society. The video suggests that rich countries should reduce inequality through measures like job guarantees and universal basic income, which are part of the degrowth strategy to create a more equitable society.

💡Resource Use

Resource use pertains to the consumption of natural resources in economic activities. The script calls for high-income countries to dramatically scale down their energy and resource use, aligning with the degrowth movement's aim to reduce overconsumption and promote a more sustainable way of living.

💡Sustainable Growth

Sustainable growth implies economic development that meets the needs of the present without compromising the ability of future generations to meet their own needs. The video posits that low-income countries should continue to grow their economies sustainably until they reach a level of parity with middle-income nations, reflecting a nuanced approach within the degrowth framework.

💡Planned Contraction

Planned contraction in the context of degrowth refers to a deliberate and managed reduction in economic activity to promote sustainability and equity. The video contrasts this with recessions, which are unplanned and can lead to increased inequality and reduced well-being, arguing that degrowth is a proactive approach to economic and environmental challenges.

💡Carbon Emissions

Carbon emissions are the release of carbon dioxide and other greenhouse gases into the atmosphere, primarily a result of burning fossil fuels. The video notes the temporary reduction in global emissions due to the pandemic and suggests that this highlights the potential for a long-term low-carbon recovery, which is a key aspect of the degrowth movement's environmental focus.

💡Climate Activism

Climate activism involves advocacy and action to address climate change and its impacts. The video references the involvement of climate activists in the degrowth movement, including Greta Thunberg's speech at the UN Climate Summit, emphasizing the urgency of shifting away from growth-centric economics to mitigate the climate crisis.

💡Wellbeing

Wellbeing encompasses an individual's health, happiness, and overall quality of life. The script suggests that countries like Scotland, Iceland, and New Zealand are prioritizing wellbeing over economic growth, which aligns with the degrowth philosophy that emphasizes improving life quality rather than just increasing production and consumption.

Highlights

Over 1,100 economists, scholars, and climate activists call for an end to growth-at-all-costs capitalism.

The concept of 'degrowth' is introduced as an alternative to traditional economic growth models.

Degrowth aims to prioritize life and well-being over economic expansion.

Critique of GDP as the sole measure of a country's economic welfare.

Degrowth advocates argue for a shift from production to improving quality of life.

Proposals for rich countries to reduce inequality through job guarantees and a shorter work week.

High-income countries should decrease energy and resource consumption.

Low-income countries are encouraged to grow sustainably until reaching parity with middle-income nations.

Degrowth challenges the notion of constant growth across all economic sectors.

Emphasis on investing in public transportation and renewable energy instead of arms and automotive industries.

Critics of degrowth express concerns over the risks associated with a slowing economy.

Degrowth is distinguished from recessions as a planned and equitable contraction.

Degrowth does not imply a reduction in personal income; rich countries have enough resources for everyone.

The degrowth movement's origins in the early 1970s with French philosopher Andre Gorz.

The Club of Rome's 1972 book 'Limits to Growth' predicts civilization collapse due to industrial growth.

Recent global survey shows most people see climate change as the biggest threat to their country.

The UN's call for global emissions to be cut to zero by 2050 to limit global warming.

The temporary decline in global emissions during the 2020 pandemic and its subsequent rebound.

Some countries, like Scotland, Iceland, and New Zealand, prioritize well-being over economic growth.

Transcripts

Most economists argue the pursuit of economic growth is both good and necessary.

But is it?

In the wake of the coronavirus pandemic, more than 1,100 economists, scholars

and climate activists from over 60 countries signed an open letter

calling for an end to a capitalist system which pursues growth at all costs.

Instead, they advocated for ‘degrowth’, a concept that directly challenges

the long-held view that more is always better.

Put simply, the objective of degrowth is to ensure that life is at the center of our economic systems.

That means challenging the idea that economic growth is good for everyone

and instead focusing directly on making people happier and healthier.

Ever since the metric of gross domestic product,

or GDP, was first proposed in 1937,

policymakers have been striving to increase this measure of a country’s economic welfare.

However, advocates of degrowth say GDP shouldn’t be considered a proxy for progress,

arguing there is an urgent need for us to learn how to

live better while producing less. So what would that look like?

Rich countries would be urged to reduce inequality through measures such as job guarantees,

a shorter working week and potentially a universal basic income.

It would require high-income countries to dramatically scale down energy and resource use.

Low-income countries, meanwhile, should continue to grow their economies

in a sustainable way, at least until they reach a level of parity with middle-income nations.

One of the core aims of degrowth is to tackle the idea that every sector of the economy

must grow, all the time, regardless of whether or not we actually need it.

Advocates argue that instead of growing sectors such as the arms and automotive industries,

more focus should be placed on areas such as public transportation and renewable energy.

But what about the risks associated with a slowing economy?

Critics of degrowth worry about just that, with some pointing to 2020’s sharp economic contraction as one example.

The spread of Covid last year coincided with the worst economic downturn since the Great Depression of the 1930s.

Strict public health measures and reduced mobility saw the global economy contract by 4.3%.

Some described this sharp slowdown as “degrowthism in action,”

but degrowthers themselves said this was misleading and rejected such criticism.

They say degrowth is different because it is a planned contraction that aims to be equitable.

By contrast, a recession is an unplanned event that can exacerbate inequality and reduce wellbeing.

They even argued the economic crisis was in fact related to our dependence on growth.

Leading proponents of the movement have also stressed that degrowth does not call

for a reduction in personal income, noting that rich countries already have

more than enough resources to secure good lives for everyone.

While degrowth has received renewed attention in the wake of the coronavirus pandemic,

the idea itself first gained prominence in the early 1970s.

The history of the degrowth movement can be traced back to 1972,

when French philosopher Andre Gorz first coined the term: ‘décroissance’.

Translated into English as ‘degrowth’, Gorz questioned whether the Earth’s natural balance

was compatible with the survival of a capitalist system that pursues relentless economic growth.

In the same year, a think tank called the Club of Rome published a book entitled “Limits to Growth.”

In it, researchers from MIT predicted that our seemingly never-ending appetite for industrial growth

would see civilization collapse sometime in the 21st century.

This idea was widely criticized at the time, and in 2002, one Danish academic

even suggested the book should be relegated to the “dustbin of history.”

Researchers at the University of Melbourne, however, argued that

more than 40 years on, the book’s forecasts appear accurate.

And, if we continue to track in line with its projections,

we should expect to see the early stages of global collapse to start appearing soon.

In the decades since these discussions were first published,

increasing alarm over the scale and speed of the climate crisis has sharpened the focus

on ideas that tackle rampant consumerism in high income countries.

So much so, that in September 2019, Swedish climate activist Greta Thunberg

delivered an emotional anti-growth speech at the UN Climate Summit in New York.

We are in the beginning of a mass extinction and all you can talk about is money

and fairytales of eternal economic growth. How dare you.

Despite the ongoing pandemic, a recent global survey found that

most people perceive climate change to be the biggest threat to their country.

The United Nations has recognized the environmental emergency as the “defining issue of our time,”

warning that in order to keep global warming below 1.5 degrees Celsius,

global emissions must be cut to zero by 2050.

That’s a huge undertaking and one that will require far-reaching

and unprecedented changes across all aspects of society.

With worldwide mobility brought to a standstill in 2020, the coronavirus crisis led to

the largest ever decline of global emissions on record. To some, it elevated hopes that carbon emissions

had peaked and illustrated the potential for a long-term low-carbon recovery.

Nonetheless, pollution at the end of 2020 rebounded to pre-lockdown levels

as economies gradually opened up, prompting the International Energy Agency

to stress that this should serve as a “stark warning” to world leaders.

The U.S. and European Union have crafted policies in recent years

to cut carbon emissions and invest in renewable energy,

focusing on “green growth” instead of degrowth, much to the dismay of some in the degrowth movement.

While degrowth has yet to go mainstream, there have been a few green shoots of progress in recent years.

Scotland, Iceland and New Zealand have all pledged to prioritize wellbeing rather than solely focusing on economic growth.

Perhaps it won’t be too long before others are tempted to follow suit.

Thanks for watching. Do you feel economic growth is essential to your future?

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See you next time.