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Irmi Seidl - Hooked on economic growth: how to get rid of? - Colloqui di Martina Franca 2014

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Colloqui di Martina Franca 2014 "Quale Economia per quale Benessere"

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Irmi Seidl - Hooked on economic growth: how to get rid of? - Colloqui di Martina Franca 2014

  1. 1. Irmi Seidl Hooked on conomic growth: how to get rid of?
  2. 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. 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. 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. 5 Declining growth rates since 1960s; decades / per head 22/24 maggio 2014 - Quale Economia, per quale Benessere 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. 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. 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.“ 22/24 maggio 2014 - Quale Economia, per quale Benessere Wohlstand für Alle, 1957 L. Erhard
  8. 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. 9. 922/24 maggio 2014 - Quale Economia, per quale Benessere Happiness/well-being and GDP
  10. 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. 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. 12. 1222/24 maggio 2014 - Quale Economia, per quale Benessere Wiedmann et al. 2013
  13. 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. 14 Expansive public policies to stimulate economy 22/24 maggio 2014 - Quale Economia, per quale Benessere 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. 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. 16 Employment threshold: 1.8% CH, 1.2 - 2.4% GER 22/24 maggio 2014 - Quale Economia, per quale Benessere
  17. 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. 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. 19 Gini coefficient – (un)equality of distribution 22/24 maggio 2014 - Quale Economia, per quale Benessere 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 20
  21. 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. 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. 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. 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. 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 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. 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 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 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. 30 5. Overall starting points for a post growth society 22/24 maggio 2014 - Quale Economia, per quale Benessere - 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. 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. 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

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