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2008 Andrew J. Sutter

DCROISSANCE: NOT THE QUESTION OF GROWTH, BUT WHICH

Andrew J. Sutter*

ABSTRACT: Is economic growth really desirable? Recent critiques of economic growth in the

Anglo-Saxon world tend most often to be based on environmental grounds. In Europe, andespecially in the school of thought known in France as dcroissance, opposition to growth rests atleast as much on humanistic grounds. This book review examines dcroissance first through acollection of trenchant essays by the late French philosopher Andr Gorz, and then through themovements leading philosophical journal, Entropia. A slightly shorter version of this reviewappeared in Japanese in the Growth themed issue (Summer 2008) of Nikkei BusinessManagement [Nikkei Bijinesu Manejimento] under the title Genseichouron ga tadasutsukurareta GDP seichou (Y. Sunada, trans.).

BOOKS UNDER REVIEW:

Andr GorzCOLOGICA159 pp.ditions Galile (Paris)

January 2008ISBN 978-271860757323,75

ENTROPIAvarious authors (periodical)#1 (Fall 2006): Dcroissance et politiqueISBN 978-2841901609#2 (Spring 2007): Dcroissance et travail

ISBN 978-2841901654#3 (Fall 2007): Dcroissance et techniqueISBN 978-2841901715#4 (Spring 2008): Dcroissance et utopieISBN 978-2841901807ditions Parangon (Lyon, France)15,00 per issue

*Registered Foreign Lawyer (California U.S.A.), Sutter International Law Office, Morioka-shi, Iwate-ken, Japan;Managing Director, Lyra Pacific Group, Tokyo, Japan. 2005-2008, Columnist, Nikkei Business Associ (Tokyo;semimonthly).2000-2003, Vice President, Sony Corp. of America/Strategic Venture Investment Department, Sony K.KBorn 1955, New York. Harvard College, concentration in physics; J .D., 1983, University of California, HastingsCollege of the Law.

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What kind of growth do we need? What do we lack that growth is supposed to

bring us? asks French philosopher Andr Gorz in his posthumous collection of essays,

cologica. His questions, and those asked by the contributors to the French journalEntropia, which Gorz helped to create, are the foundation of a new philosophical and

political movement in Europe known in French as dcroissance (roughly, de-growth

in English, and genseichou in Japanese).

Mainstream neoclassical economics (NCE) encourages constant growth, and

specifically growth in GDP. Criticism of this is nothing new. Many critics say that

growth is fine, but the theory or execution is wrong. Marxist critiques are in this category.

So are those that say NCE is fine, but that the neoliberal, free market reforms promoted

by the US dont work (and maybe arent even followed by the US itself). More recently,

new growth theorists claim that standard NCE theory doesnt take new knowledge and

innovation seriously enough. Their endogenous growth theory claims to show that

infiniteGDP growth is possible, thanks to the knowledge economy.

Another group of critics say that its physically impossible for an economy to

grow forever. Economist N. Georgescu-Roegen (1906-1994), who taught at Harvard and

Vanderbilt Universities, blamed NCE for ignoring the so-called entropy law of physics.

Because of this law, waste and pollution arent just occasional side-effects of economic

activity (so-called externalities), as most economists think. Instead, theyre a

fundamental and unavoidable part of that activity and increase as economic activity

increases. Other economists are reviving the 18th Century theories of Robert Malthus,

who worried that the earths resources cant support population growth forever. Such

theories as sustainable development come from these kinds of criticisms.

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Thedcroissancethinkers have been influenced by the entropy school. But they

say that the effects of growth need to be rolled back, not merely sustained at some

steady level or growth rate. Their motto is doing better with less. The opinions and

solutions proposed by the movement are very heterogeneous. Serge Latouche, an

economist who is one of the more prominent spokesmen for the movement, say

dcroissance is more a matrix of alternatives than a specific prescription. Still, some

themes occur often in the pages ofEntropia, including:

more local production of goods and services above all, local production of food more local energy production, using renewable technologies enhanced durability for goods, and less consumption transport that is less fast, less distant and less often policies facilitating time for life outside of work policies making it easier for citizens to decide on common goals and to work

together to achieve them

more political autonomy for local communities not a return to the Stone Age or rejection of all technology, but rather selection

of technology appropriate for the above goals.

Many writers also call for an exit from capitalism. But thats not necessarily what it

sounds like: since Marxism favors economic growth and one government for all the

world, dcroissance opposes that too. Although many of its thinkers originally come

from the left, they like to say thatdcroissanceis neither left nor right.

Gorz, who died in October 2007 at age 79, was by far the most profound thinker

in the movement. Born in Austria in 1928 to a Jewish father and a Catholic mother, he

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was forced to flee to Switzerland to avoid the Nazis. A few years after getting his degree

in chemical engineering, he moved to Paris and devoted his career to philosophy and

journalism. The philosopher J .-P. Sartre, who was his friend for more than 30 years,

called Gorz the sharpest mind in Europe.

cologica brings together five essays (including one fromEntropia) from 2005-

2007, and three more from earlier decades. Many of Gorzs long-term interests are

discussed here, especially the nature of work and the need for free time. He also describes

the conflict between growth and community values. Goods and services that are freely

shared dont increase GDP, even though they may benefit everyone in the community.On the other hand, pollution is good for GDP growth, since money must be spent to

deal with its effects.

In an interview included in the book, Gorz describes how reading an American

magazine article in 1954 got him interested in ecology. The article said that US

consumption needed to grow by 50% in 8 years, in order to justify US companies

investment in industrial capacity. It also said that since US consumers had no idea what

they would spend 50% more of their money on, it was up to experts in marketing and

advertising to create new desires and needs. It was obvious to Gorz that products would

have to break or become obsolete quickly, in order to encourage consumption. But, he

said, the need to create new desires also meant that consumption had to become

individualized and private for the sake of meeting corporate financial needs.

This story shows that for Gorz, ecology relates to more than just environmental

issues like opposing waste and pollution. Consumerism and advertising are part of

ecology too, because they fill up the world with unnecessary goods. Moreover,

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advertising and marketing focus peoples attention on their individual needs and desires.

So they interfere with peoples thinking collectively about their common goals and

common needs i.e., political action. That links politics to ecology as well. (Other

writers, such as Robert Reich in his recent book Supercapitalism, have noticed the same

connection between marketing and politics but about 50 years after Gorz did.)

Despite his age, Gorz was an enthusiastic fan of the open source software

movement, hackers and fabbers users of rapid prototyping equipment who produce

physical objects on a tabletop, instead of in a factory. For him, their activities show that

the nature of ideas is to be freely shared. He said such techniques and their usercommunities were signs that the exit from capitalism has already begun.

cologica offers an interesting critique of the knowledge economy and

intellectual property rights (IPR). To oversimplify Gorzs argument: knowledge is

essentially free, because it can be shared by an unlimited number of people at the same

time at essentially no extra cost. Also, even your best ideas are based on knowledge you

got from somewhere else (your college textbooks, for example). So in a certain sense,

knowledge belongs to society, not to individuals.

Sometimes knowledge is embodied in physical commodities, like machines,

CocaCola or Hello Kitty pencils. But even if you had infinite resources to make an

infinite amount of such stuff, youd also get an infinite amount of waste (as Georgescu-

Roegen pointed out). So if theres any infinite growth in the knowledge economy, it

must come from knowledge that isseparatefrom physical commodities.

Companies use legal tricks like branding, copyrights and patents, to make this

knowledge seem scarce. That way they can charge a license fee for access to it (what

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economists call a rent). But despite this disguise, the scarcity they create is

artificial. After all, people do manage to make unauthorized copies relatively easily

IPR isnt like some impregnable physical barrier.

Moreover, rents dont create value. For Gorz, real value is the result of labor.

(Adam Smith, the father of capitalism, would agree.) Software is not like cars. Theres

labor in the 100 millionth Toyota that rolls off the assembly line. But even if you could

argue that theres some labor involved in the first copy of Windows Vista, theres almost

zero labor in the 100 millionth copy. Yet it costs the same rent as the first. Instead of

creating value, Gorz says, rents just redistribute it out of the users pocket and into theowners.

Gorz doesnt specifically discuss endogenous growth theory, but rents from IPR

are a necessary ingredient in that theory. GDP statistics treat IPR license fees as money

paid for services, so of course such fees can contribute to growth in GDP. But Gorzs

analysis suggests that this sort of growth is just a game of shuffling money back and forth,

based on legal rules and other artificial restrictions; no new value is created. So infinite

growth would be just a kind of arithmetical trick.

Although Gorzs analysis isnt crystal-clear in every respect, it struck a chord

with my experience as an intellectual property lawyer. For example, patents dont give

you the right to make or use anything. Nor do you need a patent in order to make or use

that thing. A patent only gives you the right to sue someone else, to stop them from

making or using the patented thing. In that sense, a patent is a perfect example of creating

an artificial scarcity.

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Compared to cologica, the quality of contributions to Entropia is uneven. The

authors include Keynesian economists, former Marxists, scientists, sociologists, artists

and psychoanalysts. Each issue of the journal has a different theme. So far these have

included politics (#1), labor (#2), technology (#3), and the idea of utopia (#4). The tone

of most essays tends to be philosophical, passionate, erudite and impractical, though not

as dull as most Anglo-Saxon and Japanese academic articles. But each issue has at least

two or three articles that might interest a thoughtful corporate manager.

Several essays in issue #3 were particularly stimulating. Alain Gras describes the

historical accidents that made it possible for thermal power, rather than the water-basedpower that had been used for centuries, to be the driving force behind the English

industrial revolution and our current economy. Fabrice Flipo describes how European law

makes the environmental impact of IT, which is larger than you might think, less

transparent for consumers to understand.

P. Lannoye discusses why industrial-scale agriculture with many chemical inputs

was favored by European policy-makers. The purpose was to conquer overseas markets,

including by exporting to poor countries. For countries to be able to produce more of

their own food, they should emphasize different technologies that are more harmonious

with local plants and conditions. E. Garcia suggests that as petroleum becomes more

scarce, its top priority use should be for farm machinery. He also points out that even

large-scale conversion to solar power will not permit industrial civilization to expand the

way it has in the past century. We should expect the result to be a lifestyle more modest

and sober than currently, with a marked reduction in population.

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Dcroissancehas already had some practical impact in France, as has the related

decrescit movement in Italy. Gorzs ideas were a factor in the enactment of the 35-

hour work week law in France in 2000 (though because of politics, this was poorly

implemented). Protestors have blocked train lines to prevent the extension of the TGV

(shinkansen) line from France into Italy. And in January of this year, President Sarkozy

asked two Nobel laureates in economics to help devise an alternative to GDP that would

take more account of peoples well-being.

Gorzs questions at the beginning of this review seem especially relevant for

Japan. With a declining population, it is reasonable to expect to grow forever? I recentlyattended a talk where a Japanese economist warned that Japan lagged behind Western

countries in growth from organizational structure investment. When asked, he

explained that phrase means CEO compensation and fees paid to management

consultants. If Japans GDP doesnt grow because we dont spend money on such stuff, is

that a problem?

For now, Japan still has rich local cultures and a strong identity. Its decliningpopulation could be a blessing in disguise. It needs more food and energy independence

but is a world leader in organic and renewable technologies that could help to achieve

these goals. Spreading industrial and energy facilities throughout Japan might help

develop local economies. Also, a few decades from now, Japan might face new threats to

its national security from within the region. Producing more food, energy and other

necessities of life in many localities in Japan could have benefits from a military and

security point of view. Genseichou might indeed be a point of view that can rise above

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being left or right (as long as Japan dares to think differently from America). It

deserves to be thoroughly debated here.

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