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Towards a Political Economy of Postgrowth

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Talk at https://www.ppe-conference.org/home/ on 7 April 2018: Starting out as a fringe movement almost 15 years ago, décroissance and its associated notions of degrowth and postgrowth have made inroads into both civil society as well as heterodox economics. Today we can observe a diversity of perspectives within the degrowth movement, that share certain core assumptions – namely the criticism of the fixation on economic growth, its measurement through GDP and exclusion of alternative understandings of well-being, as well as the absolute limits on economic activities imposed by a finite planet –, but differ in their economic analyses and policy suggestions. Conservative, social-reformist, sufficiency-oriented, anti-capitalist and feminist degrowth perspectives can be identified in the current discourse. This contribution seeks to find the connecting tissues beyond the core assumptions in order to outline a political economy of postgrowth. This new form of "PPE" (postgrowth political economy) will then be firmly placed in the specific German economic tradition of ordoliberalism. In fact, it will be argued that postgrowth economics constitutes the 21st century successor to ordoliberalism under the conditions of economic abundance, social inequality and ecological scarcity.

Talk at https://www.ppe-conference.org/home/ on 7 April 2018: Starting out as a fringe movement almost 15 years ago, décroissance and its associated notions of degrowth and postgrowth have made inroads into both civil society as well as heterodox economics. Today we can observe a diversity of perspectives within the degrowth movement, that share certain core assumptions – namely the criticism of the fixation on economic growth, its measurement through GDP and exclusion of alternative understandings of well-being, as well as the absolute limits on economic activities imposed by a finite planet –, but differ in their economic analyses and policy suggestions. Conservative, social-reformist, sufficiency-oriented, anti-capitalist and feminist degrowth perspectives can be identified in the current discourse. This contribution seeks to find the connecting tissues beyond the core assumptions in order to outline a political economy of postgrowth. This new form of "PPE" (postgrowth political economy) will then be firmly placed in the specific German economic tradition of ordoliberalism. In fact, it will be argued that postgrowth economics constitutes the 21st century successor to ordoliberalism under the conditions of economic abundance, social inequality and ecological scarcity.

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Towards a Political Economy of Postgrowth

  1. 1. Towards a Political Economy of Postgrowth Prof. Dr. André Reichel International School of Management | ISM www.andrereichel.de
  2. 2. Political Economy, Not Economics For an overview cf. Rothschild, K. W. (1989). Political economy or economics? European Journal of Political Economy, 5(1), 1–12. Political Economy • is concerned with the assumptions of policy and the results flowing from them • is a social science dealing with the interrelations of political and social processes • focuses on societal evolution and combines economic dynamics with political and social change • is doing economics from an interdisciplinary perspective
  3. 3. Political-Economic Actors Ulrich, P. (2009). Civilizing the Market Economy: The Approach of Integrative Economic Ethics to Sustainable Development (Discussion Papers of the Institute for Business Ethics No. 114). St. Gallen: University of St. Gallen. Business Actors: Producers, consumers Goals: Efficiency, profit Role: Upscaling, diffusion State Actors: Politics, administration, voters Goals: Social justice, balance of interests Role: Collectively binding decisions, codification Civil Society Actors: Citizens in joint, voluntary, cooperative action Goals: Public interest, critique Role: Social innovation, social reflection
  4. 4. Flashback: Ordoliberalism Bonefeld, W. (2012). Freedom and the Strong State: On German Ordoliberalism. New Political Economy, 17(5), 633–656. Ordoliberal beliefs • ‘Social irrationality of capitalism’: greed and antagonistic class interests endanger liberal values • Thus markets require the provision of an ethical framework to ensure freedom (of the entrepreneur, but also of the worker) • Governments as rule makers and rule enforcers on markets Central question (in Germany after WWII) • How can an economically and morally bankrupt society get back on its feet under fundamental economic scarcities? Ludwig Erhard’s answer: • Growth of the ‘Sozialprodukt’ Central question today • How can an affluent society deal with fundamental ecological scarcities in a situation of economic abundance?
  5. 5. Economic Growth https://www.economist.com/blogs/freeexchange/2013/08/economic-history-1 https://www.economist.com/blogs/graphicdetail/2014/11/secular-stagnation-graphics • Long-term, • steady state expansion of supply & demand, • measured in real GDP (Gross Domestic Product)
  6. 6. Economic Growth and Sustainable Development https://sustainabledevelopment.un.org/sdgs http://www.stockholmresilience.org/research/research-news/2017-02-28-contributions-to-agenda-2030.html
  7. 7. Economic Growth and (Un-)Sustainable Development Wackernagel, M., Hanscom, L., & Lin, D. (2017). Making the Sustainable Development Goals Consistent with Sustainability. Frontiers in Energy Research, 5, 18. https://doi.org/10.3389/fenrg.2017.00018
  8. 8. Décroissance, Décroissance! Latouche, S. (2009). Farewell to growth. Cambridge ; Malden, MA: Polity. Jackson, T. (2009). Prosperity without growth: Economics of a finite planet. London: Earthscan. D’Alisa, G., Demaria, F., & Kallis, G. (Eds.). (2015). Degrowth: a vocabulary for a new era. London: Routledge. • From »décroissance«, a term introduced by Serge Latouche: • Deliberate downscaling of production and consumption • that increases human well-being • and enhances ecological equity on the planet Postgrowth Degrowth Steady-State Economy (Herman E. Daly) Bioeconomics & Entropy Economics (Nicholas Gergescu-Roegen) »Everything that comes after the growth story« (Postgrowth Institute) Conservative Social-Liberal Reformist Sufficiency Oriented Anti- Capitalist Feminist Buddhist Economics (Ernst F. Schumacher) Conviviality (Ivan Illich)
  9. 9. Varieties of Degrowth Conservative Social-Reformist Sufficiency oriented Anti-Capitalist Feminist Diagnosis Economic, ecological and social limits to growth Fixation on GDP growth leads to multiple ecological crises Decoupling of growth and environmental impact is impposible, over-consumption is the main problem Capitalism as driver of growth, environmental degradation and »imperial(ist) lifestyles« Economic growth endangers the reproduction of social ties, deepens gender imbalances, and leads to degradation of self- sufficiency Means Self-restraint, deep culture change, cutting back on social security, strengthening civil society and its initiatives Eco-taxes, suffiency policies, forms of basic income, focus on alternative welfare measures (beyond GDP) Consuming less (not just »green«), lifestyles of sufficiency (»enoughness«), economic self- sufficiency, regional economic cycles Solidarity economy, economic democracy, basic and maximum income, governmental regulation of private investments De-commercialisation, local economies, and non-monetary self- sufficiency Ends Adaptation to unavoidable contraction Growth independence Planned, deliberate contraction Planned, deliberate contraction Gender-just deliberate contraction Actors Politics, consumers Politics (, civil society) Consumers, civil society Critical civil society, trade unions Critical civil society Muraca, B., & Schmelzer, M. (2017). Sustainable degrowth. In: Iris Borowy & Matthias Schmelzer (Eds.) 2017. History of the Future of Economic Growth: Historical Roots of Current Debates on Sustainable Degrowth, Routledge: London, pp 174-192.
  10. 10. Outlining a Postgrowth Political Economy Conservative Social-liberal reformist Sufficiency oriented Anti-capitalist Feminist • Ending public and private debt-fuelled growth • Complementary social security systems beyond market and state • Growth independence in public budgets • Decoupling of growth & quality of life • Social-ecological tax reform • Local bottom-up initiatives from civil society • Small-scale economic cycles in local exchange trading systems • Renewed civic engagement and empowerment • Complementing and substituting market relations with social relations • Cooperative action in the commons economy • Strengthening of reproductive care activities • Balance between commercial and non- commercial social services
  11. 11. Postgrowth Policies and the State http://seri.at/en/projects/completed-projects/implications-of-a-persistent-low-growth-path-a-scenario-analysis/ Friends of the Earth Europe. (2018). Sufficiency: Moving Beyond the Gospel of Eco-Efficiency. Brussels. usiness oducers, consumers ciency, profit aling, diffusion State Actors: Politics, administration, voters Goals: Social justice, balance of interests Role: Collectively binding decisions, codification Taxation • Cost-neutral eco-social tax reform • Reduction of environmentally harmful subsidies • Tax breaks on environmentally positive behaviour Labour • Reduction of working hours Regulation • Material-efficiency and eco-effectiveness • Negative environmental externalities as unfair competition Social and Economic Security • Wealth and resource taxation (not income) • Negative income tax (or other forms of basic income) • Non-monetary exchange systems
  12. 12. Business Actors: Producers, consumers Goals: Efficiency, profit Role: Upscaling, diffusion State Actors: Politics, administration, voters Goals: Social justice, balance of interests Role: Collectively binding decisions, codification ety joint, ative action rest, critique ation, social Postgrowth Policies and Business Bocken, N. M. P., & Short, S. W. (2016). Towards a sufficiency-driven business model: Experiences and opportunities. Environmental Innovation and Societal Transitions, 18, 41–61. Reichel, A. (2015). What’s Next? Wirtschaften jenseits des Wachstums. In Zukunftsreport 2016 (pp. 110–135). Frankfurt am Main: Zukunftsinstitut GmbH. Sufficiency oriented business models • Dematerialisation and tertiarisation of products into services • Extending product life, ensuring repairability and encouraging re- use • Learning partnerships with consumers for lifestyles of sufficiency Multi-value added • Accounting for ecological and social value added Managerial activism • Business as a political actor and change agent
  13. 13. Postgrowth Policies and Civil Society Helfrich, S., & Bollier, D. (Eds.). (2012). Wealth of the Commons: A World Beyond Market and State. Amherst, MA: Levellers Press. Habermann, F. (2016). Ecommony: UmCARE zum Miteinander. Sulzbach amTaunus: Ulrike Helmer Verlag. Re-skilling • Community supported agriculture, urban gardening/farming, repair cafés as re-skilling projects • Epistemic communities of sufficiency practice Vernacular economies • Local exchange trading systems (LETS) • Platform cooperativism • Alternative currencies (including social impact cryptocurrencies) • “Beyond money” transactions Social change agents • Social innovation in social practices • “Avantgarde” Busin Actors: Produc Goals: Efficien Role: Upscaling Civil Society Actors: Citizens in joint, voluntary, cooperative action Goals: Public interest, critique Role: Social innovation, social reflection
  14. 14. Double Decoupling as Middle Ground Göpel, M. (2016). The Great Mindshift (Vol. 2). Cham: Springer International Publishing. Material- economic wealth Ecological footprint Quality of Life 1st order decoupling Technological efficiency (»Green Growth«) 2nd order decoupling Lifestyles of sufficiency (Beyond Growth)
  15. 15. Postgrowth as the Economy of Freedom
  16. 16. http://www.andrereichel.de/ linkedin.com/in/reichelandre @andrereichel Towards a Political Economy of Postgrowth Prof. Dr. André Reichel International School of Management | ISM

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