ECONOMIC DE-GROWTH FOR ECOLOGICAL SUSTAINABILITY AND SOCIAL EQUITY”, Paris, 18-19 April 2008
De-growth: Addressing Cultural and Institutional Constraints
Igor MatutinovićGfK – Center for market researchZagreb, Croatia; GfK Group
2. The global capitalist system have the propensity to continue to grow until it exceeds the biophysical limits of earth ecosystems.
Potentially irreversible degradation of global ecosystems
Risks of international tensions and violent conflicts
Introduction: Initial Propositions
1. Capitalist economy is an autocatalytic system insitutionally designed for growth and dynamic change.
Range of solutions
1. Technological Fix: Improve energy efficiency, increase the share of renewable energy sources, and introduce new technologies
2. Behavioral Fix: Change production and consumption patterns & redesign lifestyles in capitalist economies
3. Managerial Fix: Improve global governance
4. Ideological Fix: Change the political and economic system
Behavioral Fix
RESOCIALISATION*
Reducing preference for material consumption
Incrasing preference for leisure
Decoupling well-being from material consumption
Culturally dependent changes
*Robinson and Tinker, 1997.
Decoupling of personal well-being from material consumption – more leisure for less work and lower
income!
major reduction of working week
earn & consume less
tax revenues decline
recession & sharp correction in capital markets
drop in profiltability, industrial production & GDP
capital escapeproduction relocate abroad
domestic production lags behind demandsocial services
enter in crisisprices go up and imports increase
unemployment rises
interest rates go up
capital escapeproduction relocate abroad
Putting a cap on material inputs*
Estimating sustainable rate of resource troughput
Auctioning tradeable resource permits to the industry
Letting markets drive the allocation and technological efficiency
Growth in GDP is possibleGrowth in income, profits and investments
Proceeds
Increase in Sustainable Economic
WelfareRedistribution
*Philip Lawn, 2004; 2005
Reduction of Working Week
Cap on Energy & Material Inputs
Reducing demand for consumer goods
Easening of human pressure on gobal ecosystems and
climate
DE-GROWTH
Reducing material troughput, waste and emissions
Mediated by Markets
_ _
+
Putting them together ...
Major Reduction of Working Week Cap on Material Inputs
Political problem
Not viable under regime of global trade
and capital flows
Redistribution: poverty problem in the South
Requires global governance for fossil fuels, material inputs, fisheries, fresh water, tropical forests
CHINA & INDIA
Dynamic growthOn the way to become fully industrialized major world economic powers.
Radical changes are required at the cultural and institutional levels!
Exploring constraints ...
Worldview
InstitutionsTechnology
Patterns of production &consumption
Human Biology
Environment
Waste & Heat
Human Subsystem
Resorurces
Systemic perspective ... Cultural constraints
{biological {ideational {institutional {economic}}}} HSP
(Salthe, 1996)
Substantial reduction/stabilization of material and energy consumption is constrained by:
• Capitalist institutions and Western life-styles getting global
• Huge gap in the material standard of living between advanced and industrializing countries.
• Dynamic growth momentum of China and India
• Population growth in the South
Summing up the constraints ...
1. To open up maneuver space for long-term behavioral and institutional changes, nation states would first have to abandon neo-liberal doctrine and gradually revert to international trade.
damp global economic growth
reduce global energy demand
more time for major societal adaptations ...
Policy recommendations ...
Thank you!
Economic and institutional globalization... predicted
Karl Marx, Communist Manifesto _____
“The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, and establish connections everywhere. The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization.”
“Because of biophysical constraints the economy sooner or later will stop growing. Therefore, at some point we will move to a different socioeconomic system whose characteristic are at present unknown and unknowable” (Gowdy, 1994).(International Journal of Social Economics, 8, 43-55)
Island of Cres, road to town Lubenice
Opportunistic life-style switchers
AND WHAT EVENTUALLY HAPPENED?
Cultural entailments of Western civilization
Modern Worldview
Institutional framework
IndividualismWorking ethicEconomic rationalityMaterialism
Capitalist institutionsMarkets dominate socioeconomic relationsPolitical democracy
Economy Technology
Impact on Ecosystems
AutocatalysisDynamic growthHigh productivityGlobalization
Autocatalytic loop between science and technology;Explosive dynamics
Intensive DiversifiedGlobal SystemicSixth Extinction
Worldview
Beliefs, symbols, values and segments of objective knowledge that are widely shared by a society.
The “core” group of advanced capitalist economies manage to reduce and than stabilize its total energy consumption.
Who else wants to be reformed to a steady state?
DEVELOPING COUNTRIES
Population GrowthDebt RepaymentPoverty Reduction
EUROPEAN TRANSITION COUNTRIES
Increase p.c. consumption
CHINA & INDIA
Increase p.c. consumption.On the way to become fully industrialized major world economic powers.