Growth is exponential and destroying our planet

We are failing to mount the response we need to avoid catastrophe from the crisis in climate and nature. If governments continue with the same environmental policies currently in place, the world will become 2.8°C hotter by the end of the century, which would be “a death sentence,” warned the United Nations Secretary General in April.1 If the feedback loops kick in—for example, the release of methane from beneath melting ice—it could be much worse and much faster. We need drastic change—and a move to degrowth may be the only answer. Just before the pandemic began, I attended a debate entitled “Must capitalism end to avoid climate collapse?”2 Although uncertain of the answer before the debate began, I voted—like most of the audience—against the end of capitalism, partly because capitalism was developing technologies that could help respond to the climate crisis and more because it didn’t seem we had time to change our whole economic system. At the debate Adair Turner, the first chair of the UK Climate Change Committee who spoke in favour of capitalism, said that he thought we had only a 30% chance of avoiding economic and social collapse. He would, I’m sure, put it much lower now. At the end of last year, I commented on an article that debated the merits of “green growth” and “degrowth” and concluded “by any reasonable standard of argument, the burden of proof doesn’t lie with the degrowthers: it lies with those who hold fast to growth.”3 I’ve now read “the Bible of degrowth”—Less is More by Jason Hickel and become convinced that “green growth,” which is advocated by the US, European Union, and several British political parties is a fantasy and that we have no choice but to move to degrowth, even though, as Hickel concedes, “No one can give us a simple recipe for a post-capitalist economy; ultimately it has to be a collective project.”4 For most of human history we had economies based on exchange: I cut your hair, and you give me a loaf you have cooked. Such an economy is compatible with money and even with profit. You make a profit on your bakery, but you make roughly the same profit year after year. You don’t feel the need to grow, but if you think you would like to grow you will require investment, capital. The investor expects a minimum of a 3% return year after year, which means you will have to grow and keep growing (compound growth). If you don’t give investors their 3% return, they will invest elsewhere, bankrupting your bakery. As I was taught at the Stanford Business School, it’s grow or die once you start down this path. Small bakeries don’t have to grow, but they may be put out of business by supermarkets, which because of investors have no choice but to grow. Big companies like Amazon, Meta, Pfizer, and BP must find a way to give their investors a minimum return of 3%, allowing the odd down year, or finish—and most companies do die after 20-50 years. Economic growth has produced great benefits, including jobs and taxes, lifting many people out of poverty and funding improvements in health, housing, education, transport, and much more. Politicians, including the present leaders of Britain, see economic growth as essential, although it is proving harder and harder to achieve in mature economies, like that of Britain. One big problem with capitalism is that compound growth is exponential, growing faster than humans can imagine. The pandemic helped us understand a little more about exponential growth, but still the best understanding comes from the ancient story of the man who asks a king to pay him with one grain of rice on the first square of a chess board with the number of grains doubling with each subsequent square. After the first row he has fewer than 200 grains, but the 64th square he has 18 million trillion grains, enough to cover the whole of India with rice a metre thick. The graph of global economic growth is the familiar “hockey-stick,” virtually flat until the beginning of the industrial revolution in the early 19th century, beginning to accelerate in about 1950, increasing 10-fold by 2015.5 As Hickel calculates, if the global economy grows at even a moderate 3% it will double every 23 years, quadrupling before the middle of the century. This might be acceptable—even desirable—but for a second problem with capitalism, that the earth’s resources—for example, clean air, rivers, seas, and much of nature—are seen as “free goods,” externalities in economic jargon. Fossil fuel companies pay nothing for filling the air with pollutants. Infinite growth and a finite planet are simply incompatible. A further problem with capitalism is that it creates huge inequalities. The wealthiest 1% of the global population owns half of the world’s wealth, whereas the poorest 3.5 billion adults own just 2.7% of the wealth. Hickel explains how capitalism has grown by enclosing common land and creating colonies. “The South,” writes Hickel, “has suffered twice over: first from the appropriation of resources and labour that fuelled the North’s industrial rise, and now from the appropriation of atmospheric commons by the North’s industrial emissions… atmospheric colonisation.” And the end of colonialism did not end inequalities: “the real per capita income gap between the global North and global South is four times larger today than it was at the end of colonialism.”