So far, the best book I read in 2022. Very much recommended. Why planned shrinking of the economy (degrowth) is necessary and some suggestions on how to make it happen.
Since the 1970’s we are living in global “overshoot”, i.e. the human pressure on the planet is more than she can take. Therefore we make Earth less and less habitable every year. This is insane and suicidal, since we destroy the joys of life for our children’s children and all generations to come.
Hickel explains that we do this due to Growth, which is a side effect of capitalism and our monetary system.
In the 1800s, when the current economic theories (capitalism, socialism) were formalized and accepted, the human footprint was a fraction of today’s overload. In 1850, there were 15% of the current human population and the resource use was less than 5% of what do today. In those days, Earth seemed boundless. “Growth is good”, to paraphrase Gordon Gecko.
Hickel reviews the historical background of today’s economic system, tracing back to the peasant revolutions in England in the 1300s. After the Plague, the peasants organized uprisings and took power from the feudal lords and lived well for hundreds of years. Understandably, the lords were not happy and kept plotting to take back control. Hickel cites several lords who complained about the lazy subjects who only worked for themselves, and did not bring in lots of taxes to their courts. And their proposals to get the farmers to become more “productive” and taxable.
According to Hickel, this was the origin story of the Enclosure movement, which privatized (stole) the commons from the villages into the hands of the lords.
The Enclosures was a fight that the landed aristocracy won, and it generated a deluge of destitute peasants who flooded the towns in the form of cheap labour.
The background of the Enclosure movement was new to me, and the arguments were very similar to the push for privatization of public utilities in the 1990s (efficiency, better use of resources, competition will drive innovation etc.).
We know now that most of the privatizations made a handful of new owners very rich.
The design of the current monetary system (since Bretton Woods 1947) is based on an assumption of growth. Almost all money is created as interest-bearing debt, which means that there must be more money later to pay back the debt. In other words, the economy must grow. Hickel describes how well this worked in an expanding era, but how that same system today creates perverse incentives that destroy future prospects. Growth has become an obsession, just to be able to service debt.
The economic theories that were taught to the economists who are now in power are inconsistent with the current reality. The theories are wrong. Unfortunately, most economists are not prepared to reconsider, but keep doing what worked a century ago…
The second half of the book describe several possible systemic changes that could help us to shrink the economic activity in the rich world. He shows that it is possible, if we want, to shrink the economy in a way that makes life better for most of us.
Hickel talks about planned reduction of consumption, shorter work week, redesigned monetary system and much more. It is great to have alternatives to the current status quo. “There are numerous good alternatives (TANGO)” as I like to say, (instead of the Reagan-Thatcher slogan of “There is no alternative (TINA)”).
I guess that there are many possible paths to shrink our economic and ecological footprint, the proposals by Hickel is only one of many. By making proposals, he invites us all to imagine new and exciting possible futures within planetary limits.
He is whetting our appetite for imagination, which I think is the main takeaway of the book.
What kind of future would you like to have, if/when we decide to live within planetary boundaries? Hickel shows that it is possible, and maybe you have better ideas how to make it happen?