top of page
  • Yu-Hung Wang

The Capitalist Myth of GDP Growth: On Degrowth

A text written by Yu-Hung Wang about how the capitalist myth of growth underpins several of todays most urgent crises. Along with this critical reading of the desire for GDP growth, Yu discusses its potential counterpart, 'degrowth', and four concrete ways forward. The text is also made into a video, the link to which can be found down below.


Net-zero carbon emissions by 2050. This is the goal world leaders pledged to achieve at last year's COP27 global summit. The accepted necessity of reducing carbon output has been linked to the idea of "economic degrowth". What is degrowth? What is the root cause of ecological disasters? Who bears responsibility for the climate crisis? And how can we implement "degrowth" strategies to achieve a sustainable future?

Today's climate crisis can be attributed to one major problem: in capitalist society, economic growth takes priority over the environment. But what is capitalism? Capitalism is not simply synonymous with a "market economy". Market economies have existed since ancient times, but capitalism has only existed for 500 years. Capitalism rather names a system of constant accumulation predicated on economic growth. Before capitalism, economic production was based primarily on "use values". That is, production was organized around specific needs, and surpluses went towards enjoyment. Capitalism centers instead on "exchange values”: production is directed towards profitable exchange, and money earned must be constantly reinvested. Investors look at how much a company's rate of profit grows each year. If the company does not return profits, investors will withdraw their investment. So, if you start a business, and then pocket all your profits, you are not acting like a capitalist, you are not driven by the logic of economic growth.

According to some economic estimates global GDP must grow by at least 3% per year for large corporate profits to continue increasing. But in order for capitalists to maintain profits, they must exploit natural resources without restraint, constantly produce goods, and maintain wide public consumption. This is the engine driving the current climate crisis.

If capitalism is the root cause of climate change, we should perhaps ask ourselves how it actually came about. Many people cite "human greed" in arguing that capitalism simply reflects human nature. This thinking frames climate change as a "natural" necessity. But, far from natural, capitalism is the result of hundreds of years of "organized violence". In the 14th Century, much of the European population was decimated by the Black Plague, and the dwindled supply made able labor much more valuable. Sensing this, many peasants revolted, and successfully overthrew their feudal lords. Many serfs became freemen. Public use of forests and land allowed for a self-sufficient life. And peasants did not even have to work for a third of the year! Historians call this era the "Golden Age of the European Proletariat".

Capitalists and aristocrats in Europe at that time found it impossible to promote capitalism. People were living too well, and no one wanted to return to being a serf. So, the ruling class came up with a solution: the enclosure movement. Ending peasant autonomy by forcing them off their common lands

and then privatizing these commons. They could in this way get large plots of land for free, while depriving the peasants of their self-sufficiency, forcing them to find jobs in the city. This history of enclosure is the violent birthplace of capitalism.

But even after privatizing the land, there were still obstacles to capitalism's growth. Medieval peasants believed in animism, seeing Mother Earth as a living organism. Natural resources should be used in moderation.

However, during the Scientific Revolution, the "Mother Earth" conception of nature underwent a transformation. The father of empiricism, Sir Francis Bacon, argued that the Earth was not a mother, but rather "a common harlot". Or, more simply: humanity's bitch. Man must use science to conquer her and extract her secrets. This offered scientific credence to the drive to dominate and exploit nature, a necessary step for establishing capitalist relations. At the same time, Descartes introduced the philosophy of dualism. Dualism inscribes the cognitive subject as humanity's distinctive feature, contrasted to plants and animals, whose lack of thought marks them as materials to be exploited by man. Since the human-body belongs to the natural world, the mind can control the body through a strong “work ethic”, thereby subordinating it as a labor-tool. If you are poor, you are simply not utilizing the potential productivity of your body. Poverty in this way is not a result of capitalist exploitation, but a consequence of personal failure to make full use of your own “value”.

Capitalism feeds on this extractive philosophy of nature and the human body. This kind of extractive philosophy is relatively new to human history. Our ancestors had no natural desire to exploit the land and labor of others for the pure sake of economic development. Capitalism is not a manifestation of our natural greed; it is rather a fundamental alteration of human drives. More importantly, the economic prosperity capitalism promised did not actually happen. As European settler-colonists began seizing Indigenous land in the Americas, the English philosopher John Locke argued that, while no doubt violent, the land theft was both rational and moral, for the colonists would make the land more productive, so as to reveal its true value. Wouldn't it be a waste for Indigenous Americans to not develop all that land? Locke's theory was influential on international law at the time, helping to forge the ideological basis for Europeans to conquer the world. But historians contend that despite capitalism's penchant for economic growth, the fruits of this growth were held by a few, while for most the average quality of life decreased.

For capitalism to expand into new places, "artificial scarcity" needed to be reproduced. When the British colonization of India began in the 19th century, local subsistence farming was sabotaged and communal support systems dismantled, in order to manufacture scarcity and to deprive many peasants of the capacity for self-sustenance. In this way they were forced to shift to a wage-labor economy built by the colonizers. The Historian Mike Davis discovered that while British capitalists were able to triple crop output, the majority of food was exported to Europe. This resulted in 30 million Indians dying of famine, which Davis terms "the Late Victorian Holocaust". Britain made out with a $45 trillion profit while India sank into artificial scarcity. Half of the British treasury was funded by overseas colonies in the 19th century.

Capitalism contradicts itself: to promote economic growth, it must create scarcity and impoverished people first. The Scottish Earl of Lauderdale was the first to highlight this contradiction, also known as the "Lauderdale Paradox”: whenever private wealth increases, public wealth decreases. There is an inverse relationship between the two. "Poverty" and "ecological destruction" are necessary conditions for capitalist growth. From this perspective, European colonization in the past and today’s climate crisis are both the symptoms of the same problem: Capitalism’s blind pursuit of economic growth. This is not the result of "human nature"; it is the result of losing it.


If capitalism is the chief culprit behind the climate crisis, why is GDP (Gross Domestic Product) growth the most common development indicator? During the Great Depression, economist Simon Kuznets was tasked by the U.S. government to come up with an economic metric. Kuznets conceptualized GDP, but he noted two inherent flaws. First, it does not factor in societal costs. When a tree is cut for lumber, GDP goes up. When you work more hours, GDP goes up. When you get sick and go to the doctor, GDP goes up. Simply put, GDP obscures a lot of bad shit. It doesn't consider the externalities of economic growth. Further, it also covers up a lot of good things. If you look after your parents, do household chores, or grow a garden, GDP doesn't change. But these are the activities that sustain our communities and our planet. So, Kuznets warned the US government not to use GDP as its metric. But when the OECD formed in 1960, it made its mission the promotion of policies aimed to achieve the highest rates of growth.

The United Kingdom followed suit, and aimed for 50% GDP growth over 10 years. For the first time in human history, economic growth was an explicit national goal. Why did this happen? The onset of the Cold War pressured the West to prove capitalism's superiority to communism. The logic was simple: a stronger GDP represented a stronger country, since the higher a country's GDP, the more it could militarize. Thus, GDP growth became an international race. So, on the surface, capitalist and communist countries remained in ideological opposition, while essentially, they were all driven to enlarge their GDP, pursuing endless growth without regard for the environment.

What followed was the exponential expansion of global "material footprint". A "Material footprint" is the total amount of raw materials extracted to meet consumption demands in a country. The larger the material footprint, the greater the ecological impact. Scientists estimate that the planet can handle up to about 50 billion tons a year, but the global material footprint today is more than double that.

Who then should be held responsible for the climate crisis? If we only look at carbon emissions, the United States and China are the world's top emitters of CO₂. But China's population is much larger, so their emissions will naturally be higher. We should instead look at per-capita carbon emissions. And let's not forget: rich countries outsource much of its industrial production to poorer countries, thereby "outsourcing" their carbon emissions to the Third World. So, if we want to know exactly how much carbon each country is responsible for, we must consider not only its population size, but also its outsource emissions.

According to the calculations by Anthropologist Jason Hickel (of global carbon emissions from 1850 to 2015) of all global excess carbon emissions, the U.S. contributes 40%, and the EU 29%. Countries in the Global North produce 92% of excess carbon emissions while making up only 19% of the world's population. Jason Hickel refers to this process as 'atmospheric colonization'. The earth's atmosphere is like communal land, each person has the right to a small share, but developed countries are emitting excessive CO2, leaving little room for carbon emissions from other, poorer countries. Worse still, many of the pleasures of the Western capitalist lifestyle are derived from exploiting the natural resources and cheap labor of developing countries. However, the consequences of the climate crisis are borne by the people in these developing countries. In 2010, 400,000 people died of famine tied to the climate crisis, and 98% of these deaths happened in poor countries, as these countries do not have the resources to weather the climate crisis. That’s why, when the United States announced to cap global warming at 2 degrees Celsius at the Copenhagen summit in 2009, the chief negotiator for 77 developing countries called it a suicide pact. Two degrees Celsius is a certain death for Africa. Two degrees Celsius may be the threshold for Western countries, but for developing countries, the climate catastrophe has already begun. Economist Giorgos Kallis argues that we should not design climate models to predict the limits to growth, because before we hit the limit, climate disasters will already be happening. Western media mostly avoids talking about climate disasters in the Third World. You would be unlikely to read that droughts in Somalia have killed 70% of the country's livestock. Disaster reporting is mostly hurricanes in the U.S., heat waves in Europe, and wildfires in Australia.

To summarize: wealthy countries bear the most responsibility for the climate crisis, and to limit global warming to 2 degrees these countries must reach zero carbon emissions by 2030. To achieve this goal, we must stop pursuing economic growth.

When debating how to deal with the climate crisis some people would say that we just need more green technology. If countries switch to green energy and use electric cars, we would be able to continue to pursue economic growth, and capitalist investment in green technology would be able to make that happen. So, the solution to our ecological crisis is “Green Capitalism”. Can "green capitalism" really work? In fact, the same argument was made during the Industrial Revolution. The introduction of the steam engine suggested that people could reduce their reliance on coal. So, it seemed logical that coal consumption would decrease. But economist William Jevons found that coal consumption in Britain actually increased. We've arrived at "Jevons' paradox": technological advancements breed increases, rather than decreases, in energy consumption.

This is not a surprise when considering the laws of capitalist growth. When technological change allowed for more efficient energy generation, the money saved was re-invested in the interest of expanding productive capacity, so overall coal use still increased. Capitalists don't invest in technology to reduce energy consumption, but rather to pursue more growth. The notion that green investment will save the world is a myth. Transitioning to 100 percent renewable energy is certainly a priority, but in making the transition, the more we pursue GDP growth, the more energy will be needed, and the more carbon emissions will be produced. So, while renewable energy may reduce carbon emissions a little bit, the reduction cannot outpace the carbon emitted by the global economy. To pursue a green transformation, and to actually achieve zero carbon emissions by 2050, we must give up on growth.

Now let's dispel the myth of growth. Many people think that the technological and material progress driven by economic growth over the last few hundred years is the reason we enjoy higher qualities of life. But where did the idea that economic growth equals a happy life come from? It actually came about during the 1970s. Thomas McKeown, a public health scholar, found that average life expectancy in the U.K had increased significantly since the 1870s. The only explanation he could think of was that growth during the Industrial Revolution had made the U.K. wealthier, so people lived longer. However, researchers later found that the improvement was the product of the public health infrastructure. British sewage and drinking water systems used to be merged, and because the construction of a new system required public funds and the procurement of private land, improvements were largely opposed by the capitalist class. It was not until the 1870s that a national public health infrastructure took shape in Britain as a result of working class and trade union pressure. By the mid-20th century Britain boasted a universal healthcare system. So capitalist economic growth did not directly improve people's health. It was instead the pressures of working-class people that led to the state's willingness to invest in public infrastructure and healthcare systems, which in turn led to increased life expectancies in the U.K and much of the West.

In fact, during capitalism's first 200 years, British life expectancy fell from 43 to 30 years. The decline in life expectancy was a price of economic growth. Then, what does GDP have to do with people's happiness? Economist Richard Easterlin found that Americans had the highest happiness index rating in the 1950s. While GDP continued to grow beyond the 1950s, Americans did not become happier. Why? Shouldn't it be that the more money you have, the happier you feel? As it turns out, the effects of income growth depend on its distribution. Think about it: if you got a ten thousand dollars raise this year, you will probably be very happy. But if you found out that the CEO of your company got a $3 million raise this year, would you still be just as happy? CEOs in the U.S. today make 350 times more than the average salary.

As the benefits of economic growth are cornered by the few, the uneven distribution makes people feel socially disadvantaged and distrustful of each other. Accordingly, ecological economist Herman Daly found that, past a certain level, GDP growth has no relation to people's happiness. Rather, the continued pursuit of growth has negative impacts, because increases in inequality bolster society's tensions, burdening overworked people, leading to poor health, and resulting in further ecological destruction. Distributing income equitably not only increases happiness; it also helps reduce carbon emissions, the richest 1% of the world, who drive sports cars and travel the globe in private jets, produce 100 times more carbon emissions than the bottom 50% of the entire global population. So, Economist Thomas Piketty says that reducing the purchasing power of the world's richest people would have a positive impact on global carbon reduction, because the lavish lifestyles of the world's elite are destroying the planet.

Besides equitable distribution of income, studies have found that the countries with the highest national happiness ratings in the world – Finland, Norway, Denmark, Iceland, Switzerland – are countries that all have one thing in common: a strong social welfare system. Why do countries with better welfare systems have higher levels of happiness? Because when the basic human needs are taken care of by the state, the impact of individual income is reduced. Think about it: in the United States, even if you make $30,000 a year, you still can't afford college tuition, health care, and a house. But in Finland, there's public health care, free education, and rent control. You can spend your $30,000 a year on other things. So even though income levels might be the same, you will feel like you can't make ends meet in the U.S., but will feel rich in Finland. Since social welfare takes care of the basics for citizens, you're able to spend your personal income freely.

To summarize, "fair distribution" and "social welfare" should take priority over simple growth. These are the real keys to improving overall well-being.

Now, having dispelled the myth of economic growth, how do we actually implement "degrowth"? The first degrowth path is ending planned obsolescence. What is planned obsolescence? It's when companies deliberately shorten the life of a product for the sake of economic growth, so you have to keep spending money buying new generations of products. This includes things like new models requiring different power adapters or USB cables, or Apple secretly making older iPhones slower so that consumers will switch to a new model (for which Apple was fined 25 million euros in 2020). Likewise. IKEA became a prominent international brand by inventing all kinds of short-lived throwaway furniture. Because of this planned obsolescence, every year, more than 100 million unwanted computers and appliances are shipped to African countries, where the toxic substances from their electronics leach into the soil, and endanger the health of local people. So, while Western countries ceaselessly replace their consumer products, African countries endure the ecological nightmare created by what we discard. This problem highlights the hypocrisy contained in the capitalist claim to greater efficiency; planned obsolescence is deliberately inefficient. Products are intentionally designed to break down just so that more can be produced.

Capitalism is in many ways an irrational system in that laborers are forced to build useless products in a way that actively harms the earth and its inhabitants. A truly rational economy would discard planned obsolescence. We should prioritize the innovative development of products that last and use legislation to compel manufacturers to guarantee a certain lifespan for their products. By extending the life of products, people can reduce consumption and slow down the exploitation of natural resources.

A second "degrowth" measure is to reduce advertising. Prior to the growth of the advertising industry in the 1920s, people mostly just purchased what they needed. But this impeded profits, and much was invested into the advertising to push people to never feel satisfied or that they had enough, which would in turn fuel more consumption. By the 1990s, 90% of CEOs in the U.S. believed they couldn't sell their products without advertising and marketing. 50 percent of people reported that advertising influences them to buy things they don't really want. The idea of "limited resources and infinite desires" is in fact a capitalist invention. There is often no demand before the supply; demand is manufactured through advertisements. For example, apparel firms stuck in a saturated clothing market came up with the idea of "fast fashion", so as to hasten the speed in which clothing went out of style. Here we see the connection between advertising and planned obsolescence as a means to grow: fast fashion increased textile use in the U.K by 37% in four years. Estimates suggest that regulating the industry could reduce textile use by as much as 80%, and help greatly in mitigating the climate crisis.

Proponents of advertising claim that ads inform consumers so that they can make rational choices, but most advertising is intended to prey on consumers' irrational judgments. Do we really need these ads to help us make a decision? You have the Internet at your fingertips. You can view a product's online review, and watch unboxing videos on YouTube. These are far more useful than flashy advertisements.

A third step of degrowth is halting food waste. You may not be aware that, 50 percent of global food production is wasted each year. In other words, we could cut our food production in half. Consider foods that expire while still sitting in store or that rot while being shipped. Scholars estimate that a 50% reduction in global food production would reduce total carbon emissions by 12%, while leading to significant rejuvenations of the land. In recent years, France and Italy have banned food waste from supermarkets, mandating that unsold food must be donated to charities. South Korea has even implemented fees for food waste. As a result, the country has reduced its food waste by 300 tons per day. This is a realistic way to achieve degrowth.

The final measure is to phase out ecologically destructive industries. Many industries are both socially unnecessary and environmentally harmful fossil fuel production, weapons manufacturing, advertising fast fashion, cattle farming, and disposable plastics. The phasing out of industries like these can help make space for the carbon emissions of developing countries, and enable their societal development.

So, four pragmatic steps towards degrowth:

1. End planned obsolescence

2. Reduce advertising

3. End food waste

4. And, phase out ecologically destructive industries

Besides these measures, transforming the capitalist economy also requires addressing capitalist culture. The belief that man can exploit nature endlessly has existed on Earth for just 500 years. Many indigenous peoples around the world still believe in animism. They nurture plants like their own children, and hunt with respect for their prey as if they were family. For the Achuar people, for example, the forest is not a place to feed, but a place to socialize.

Around the world, Animist beliefs have even gained some legal recognition. In 2020, the New Zealand government granted the Whanganui River the status of a "legal person". If a company pollutes the river, it is the same as hurting a person and can be prosecuted by law. We may find it strange to treat something in nature the same as a person, but most countries already treat corporations as legal persons. Social networking sites and oil companies have a legal status similar to that of human beings. If an oil company can be treated as a human being, why not the natural environment? Many of our human ancestors believed in animism and lived in harmony with nature for hundreds of thousands of years, but it only took 500 years for capitalism to generate a planetary disaster. So perhaps now is the time to learn from our ancestors again, examine anew the relationship between humans and their ecosystems, and address the climate crisis through the idea of degrowth.


 

The video that comes with this text can be watched here


About the writer:

Yu is a Taiwanese YouTuber based in London. He received his Master's in anthropology at LSE, and is currently a Lacanian psychoanalysis trainee. His research interests include critical theory, social theory, political economy, and pyschoanalysis.


He can be contacted via: superytheorist@gmail.com


Bibliography:

Braudel, F. (1967) Capitalism and Material Life, 1400-1800 (New York: Harper and Row)


Cline, E. (2014). Where does discarded clothing go. The Atlantic, 18


Descola, P. (2013). Beyond nature and culture. University of Chicago Press


Foster, J. B., Clark, B., & York, R. (2011). The ecological rift: Capitalism’s war on the earth. NYU Press


Hickel, J. (2018) ‘How Britain stole $45 trillion from India,’ Al Jazeera


Hickel, J. (2020). Less is more: How degrowth will save the world. Random House


Kallis, G. (2019). Limits: Why Malthus was wrong and why environmentalists should care. Stanford University Press


Keltner, D. (2009). Born to be good: The science of a meaningful life. WW Norton & Company


Merchant, C. (1980). The death of nature: Women, ecology, and the scientific revolution


Santarius, T. (2012). Green growth unravelled. How rebound effects baffle sustainability targets when the economy keeps growing


Schmelzer, M. (2016). The hegemony of growth: the OECD and the making of the economic growth paradigm. Cambridge University Press


Szreter, S. (1988). The importance of social intervention in Britain's mortality decline c. 1850? 1914: a re-interpretation of the role of public health. Social history of medicine, 1(1), 1-38


Victor, P. A. (2018). Managing without growth: slower by design, not disaster. Edward Elgar Publishing


コメント


bottom of page