1. Irmi Seidl
Hooked on conomic
growth: how to get rid of?

2. 2
Content
1. Terminology
2. Short History of economic growth
3. Growth – no (more) increase in well-being
4. Reasons for being hooked on growth
5. Starting points for a post growth society
22/24 maggio 2014 - Quale Economia, per quale Benessere

3. 3
Terminology
Growth
= GDP-growth
= market value of all final goods and services produced in
a country in a given period and traded on markets
Presentation will concern highly developed countries
22/24 maggio 2014 - Quale Economia, per quale Benessere

4. 4
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
1800
1810
1820
1830
1840
1850
1860
1870
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
2010
GDP-level/cap.
USA
Switzerland
Netherlands
England/GB/U
K
France
Germany
(Northern)
Italy
*In 1990 International Geary-Khamis dollars, Quelle: www.ggdc.net/maddison
2. Short history of economic growth

5. 5
Declining growth rates since 1960s; decades / per head
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CH
EU 15*
DE*
FR
IT
AT
SW
UK
USA
JP
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
*until 1989 only West Germany; Data: AMECO (http://ec.europa.eu/economy_finance/ameco/user)

6. 6
Short history of economic growth
„It is not by any means necessary that
economics should be growth-minded. I
can indeed myself remember a time it
was not growth-minded at all.”
22/24 maggio 2014 - Quale Economia, per quale Benessere
Growth and Anti-Growth, 1966
J.R. Hicks

7. 7
Short history of economic growth
„One day we will surely question
whether it is still reasonable and
appropriate to create more goods and
material welfare or whether it is not
more reasonable to waive this progress
and gain more leisure time,
contemplation and recreation.“
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Wohlstand für Alle, 1957
L. Erhard

8. 8
3. Growth – no (more) increase in well-being
Welfare: does not increase any more
Environmental problems increase
Public debt increases
Unemployment increases
Social inequality increases
22/24 maggio 2014 - Quale Economia, per quale Benessere

9. 922/24 maggio 2014 - Quale Economia, per quale Benessere
Happiness/well-being and GDP

10. 10
3. Growth – no (more) increase in well-being
Welfare: does not increase any more
Environmental problems increase
Public debt increases
Unemployment increases
Social inequality increases
22/24 maggio 2014 - Quale Economia, per quale Benessere

11. 11
High environmental costs of growth (Germany: 20%,
China: >100%)
No decoupling of growth and resource use (Rebound
effects > 50%)
Growth argument used against market-based
environmental policies
22/24 maggio 2014 - Quale Economia, per quale Benessere

12. 1222/24 maggio 2014 - Quale Economia, per quale Benessere
Wiedmann et al. 2013

13. 13
3. Growth – no (more) increase in well-being
Welfare: does not increase any more
Environmental problems increase
Public debt increases
Unemployment increases
Social inequality increases
22/24 maggio 2014 - Quale Economia, per quale Benessere

14. 14
Expansive public policies to stimulate economy
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Stimulus packets
2009-2010
in mrd. €
Stimulus packet I 70
Stimulus packet II 50
SUM 120
Sources: German Government, own calculations
GDP
2009-2011
in mrd. € Difference
in mrd. €
GDP 2008 2.489
GDP 2009 2.397
GDP 2010 2.497 (+4.2%) +100
GDP 2011 2.542 (+1,8%) + 45
SUM +145

15. 15
3. Growth – no (more) increase in well-being
Welfare: does not increase any more
Environmental problems increase
Public debt increases
Unemployment increases
Social inequality increases
22/24 maggio 2014 - Quale Economia, per quale Benessere

16. 16
Employment threshold: 1.8% CH, 1.2 - 2.4% GER
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17. 17
17
Unemployment of young adults
7.2
8.7
8.8
9.3
9.7
13.8
14.2
16.7
18.6
19.1
20.3
22.3
22.4
22.5
23.7
25.2
27.9
32.9
41.6
0 5 10 15 20 25 30 35 40 45
Switzerland
Netherlands
Austria
Norway
Germany
Denmark
Luxembourg
OECD-Total
Chile
United Kingdom
Finland
Portugal
Belgium
France
Poland
Sweden
Italy
Greece
Spain
Unemployment (15-24 yrs.) 2010, in %

18. 18
3. Growth – no (more) increase in well-being
Welfare: does not increase any more
Environmental problems increase
Public debt increases
Unemployment increases
Social inequality increases
22/24 maggio 2014 - Quale Economia, per quale Benessere

19. 19
Gini coefficient – (un)equality of distribution
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0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
0.40
0.45
middle 1970s middle 1980s middle 1990s middle 2000s 2010/12
Canada
Denmark
France
Germany
Greece
Italy
Netherlands
Sweden
Switzerland
United States

20. 20
20

21. 21
3. Growth – no (more) increase in well-being
Welfare: does not increase any more
Environmental problems increase
Public debt increases
Unemployment increases
Social inequality increases
22/24 maggio 2014 - Quale Economia, per quale Benessere

22. 22
Why do society, politics and the economy pursue
growth so ardently -
although hardly any current problem can be
solved, and new problems are created?
22/24 maggio 2014 - Quale Economia, per quale Benessere

23. 23
4. Reasons for being hooked on growth
22/24 maggio 2014 - Quale Economia, per quale Benessere
Major sectors of society, politics and economy are
existentially dependent on economic growth
No growth means structural crises of these sectors,
and hence political and societal turnmoil

24. 24
Old age assurance
Health assurance
Employment market
Consumption sector
Income equality/social justice
Enterprises
Finance markets, banks
Public finances, taxation
22/24 maggio 2014 - Quale Economia, per quale Benessere

25. 25
4. Reasons for being hooked on growth
22/24 maggio 2014 - Quale Economia, per quale Benessere
Main sectors of society, politics and economy are
existentially dependent on economic growth
No growth involves structural crises of these sectors,
and hence political and societal turnmoil
Only when these sectors are growth independent,
politics and society will give up their fixation to growth
Politicians und society will do everything to avoid such
crises

26. 26
26
J.W. Kingdon (2003)
1) Problem has political attention
2) Topic is on agenda of upcoming decisions
3) Existence of political decision possibilities, ideas,
concepts, supported by politically acting persons
5. Starting points for a post growth society

27. 27
Identify major growth dependent sectors
Identify, collect, develop approaches, proposition,
examples, good-practice-cases on how to
transform sectors to become growth-independent
Transforme these sectors

28. 28
28
 Growth of health expenditures ≥ Growth GDP
 Economically important sector
 17% of health expenditures by public households (GER)
Dependence on GDP-growth:
 To pay increasing premiums
 New employments in health sector
 Growth in health industry
Health sector
5. Starting points for a post growth society

29. 29
29
 Introduce new systems of premium payments (part
may be reimbursed if little use of health care)
 Increase individual responsibilities – also with financial
incentives
 Introduce new health care systems (managed care
systems)
 Support non-invasive treatments & palliative medicine
 Limit influence of lobbying
 Improve fraud control
 ….
5. Starting points in health sector

30. 30
5. Overall starting points for a post growth society
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- Getting growth-dependent sectors growth-
independent
- Ecological tax and finance reform
- Public participation (direct democracy) -> good
governance & healthy public finances
- Limitation of public debt

31. 31
5. Overall Starting points for a post growth society -2-
22/24 maggio 2014 - Quale Economia, per quale Benessere
- Restrictions to stock corporations (liability,
repurchase of stocks, limitations of acquisitions)
strengthen cooperatives and foundations
- Regulation of banks and financial markets; money
creation by central bank
- Provision of public goods to replace part of private
goods
- Setting strict ecological objectives

32. 3222/24 maggio 2014 - Quale Economia, per quale Benessere
A world without growth, … without change, is as
hard … to imagine as a world of everlasting
growth and change. Somewhere in the dim future,
… there may lie a world in which physical change
will be minimal. It will be a world of much greater
equality …, hopefully a much more humane and
less materialistic world. We shall not live to see it.
Meanwhile, let us give a boost to the old tax base
to get government revenues going again.
H.C. Wallich, Newsweek, 24 Jan. 1972