A Policy A Day: Degrowth for Aotearoa

In the lead-up to the election, we are examining a policy a day. We're exploring a variety of policy areas, explaining the background and analysing some of the policy options, with a mixture of technocracy and values-based approaches. Inevitably, some opinion will make its way in and we make no apology for that - after all, we're voters too. A list of all the articles is available here. Enjoy!

Today's post is by Elliot Hurst

If we want a prosperous future for all those who call Aotearoa home, we need a society which functions without economic growth. A ‘degrowth movement’ has been building in Europe over the past decade, with a network of academics and activists making the case for economic transformation. So what is degrowth? And what is the relevance for Aotearoa and our political parties?

Degrowth is a call to decolonise our imaginations from the ideology of endless economic growth.

Degrowth challenges the notion that growth is necessary to ensure a good standard of living. On a real per capita basis, the New Zealand economy is 60% larger than it was 25 years ago in 1992. How much bigger will it need to be to provide those sleeping in their cars with adequate housing? Or to have enough money available to make our polluted rivers, lakes, and harbours thrive again?

The degrowth movement recognises that infinite economic growth is socially and ecologically unsustainable. Politicians may speak of green growth, techno-fixes, and the decoupling of economic growth from environmental destruction, but the reality is that our gobbling of resources has only continued to increase. Much of the impact of our lifestyles isn’t visible to us here; it is found in these drowning islands, burning rainforests, or unbreathable air. While some relative decoupling of resource use from economic growth may be possible, adequately address climate change while continuing economic growth is simply infeasible.

Our politics and policies need to set a new course towards ensuring a good life for all. From our current situation, this will require a reduction in economic production and consumption. A deliberate and democratic shrinking of our economy is not a vision of austerity; it requires new policies and ideas to guide a fair downscaling. This is the heart of the degrowth vision. The Research & Degrowth group in Barcelona has been developing degrowth proposals for new left parties in Greece and Spain, and it is not just wishful thinking – it is being discussed as a legitimate topic overseas. The rest of the article will explore degrowth policies for Aotearoa using those proposals as a starting point. Rather than evaluating a single policy, this post aims to describe how adopting a degrowth philosophy would create significant changes across a range of economic policy areas.

Government’s role in the economy
From promoting primary sector growth to expanding non-market spheres

Labour’s Future of Work commission points out that ‘if unpaid care was made a paid part of the economy, it ...could add as much as $23.3 billion or 10.8% [to our GDP]’. It is not clear what definition of “care work” they are using, but this seems like a serious underestimate. Just consider the consequences if all unpaid emotional support, cooking, free taxi services, and cleaning were to stop for a week. The way that ‘productive’ activities depend on unpaid care work is a key insight of the discipline of feminist economics. The conclusion is that we need a richer understanding of ‘the economy’, one that includes all of the work that is done to keep society running. The for-profit, market economy is just one of many diverse spheres of economic activity. Once we understand the diversity of work, we should find ways to support alternative methods of production and consumption. Policy-wise, support for alternative spheres of economic activity, including not-for-profit cooperatives or commons initiatives need to take priority over subsidising irrigation schemes or boat races.

A related point is relatively uncontroversial - stop supporting the fossil economy. The East-West link, spending billions to make the trucking of goods marginally faster is an obvious contender. And why are we still subsiding oil exploration? Investments in public transport, adequate housing, and cycle lanes allow people to live well while consuming less.

Economic Measurement

From GDP to sustainability indicators

For degrowth, it is the reduction of material and energy consumption that is key, rather than a lower GDP. So one of the most obvious degrowth policies is just to stop measuring GDP, and shift to an alternative range of indicators that better capture what we actually care about; for example, our ecological footprint, the number of children living in poverty, or the percentage of native species at risk of extinction. While not transformative in itself, this policy is a signal and spur for a change in political discourse. We currently attach an excessive importance to the government’s ability to increase one magic number, yet it seems to be a poor proxy for whether things are actually better for people. On this front, the Green’s Public Finance (Sustainable Development Indicators) Amendment Bill is a step in the right direction, compelling government reporting to include a range of sustainability indicators.

Employment

Good work for all with a fair share

One of the tricky issues to deal with as the economy shrinks is how to provide decent employment to anyone who wants it. As it stands, 128,000 people in NZ are unemployed, while many more are underemployed or stuck in insecure work. Traditionally, growth is the magic bullet for job creation, but more creative methods are needed in a degrowth economy. One simple proposal is to reduce working hours; work is shared more evenly, and people have more time to spend with whānau. Aotearoa led the world with a 40-hour working week, but currently, various trials of a 6-hour working day are being conducted in Sweden, and the New Economics Foundation (NEF) in the UK has made the case for reducing the standard working week to 21 hours. These reductions would both provide the opportunity for more people to work, and give people more leisure time. Of course, this move needs to be linked to a living wage and a universal basic income if possible. Extra time away from work can also be a boost to community participation, volunteering, and care work.

Debt Audit

Cutting the ties to growth

One reason our economic system requires growth is to pay off loans with interest; this is one of the most thorny challenges of moving away from growth. To address this, degrowth scholars propose a citizen debt audit, a democratic process to restructure or eliminate household and government debt. Restructuring would mean reducing the amount of debt that must be repaid. For public debt, there are precedents including the Millennium Jubilee campaign of wiping debt in the Global South, when paying this debt was preventing government spending in health or education. The heart of this process is an ideological shift away from insisting that all debt must be honoured. Instead, the debt audit reaffirms the sovereignty of democratic institutions over the financial system. It’s also about facing up to the simple reality that without growth, some debts can’t be repaid. This is somewhat outside of current government policy (or the Budget Responsibility Rules), and unlikely to be popular with our Australian banks. At a local level, bankruptcy exists precisely because we recognise that in certain circumstances it is unreasonable to insist upon paying off debts in full.

Taxes

Taxing the ‘bads’

Governments have the power to guide the economy through taxation. Taxing consumption and pollution is an important reorientation. This would include a tax on carbon and charging for other resources including water. In addition, higher tax rates for high incomes or taxes on wealth would provide the resources necessary for a universal basic income or guaranteed minimum income. These policies could be an important safety net in a changing economy. Without the panacea of economic growth, a more serious conversation about inequality and the distribution of wealth is needed. We have to share the pie better rather than just trying to make it bigger.

https://www.degrowth.info/en/2016/10/d-e-growth-a-small-change-in-the-slogan-with-large-benefits/

All degrowth policies are built on a deeper ideological shift in how we understand the economy, community, and a good life. Diverging visions of the economy are already found in the political messaging used by the parties. A strong, growing economy, with a government that ‘continue[s] to drive economic growth’ is the National message. NZ First sets out the policies necessary ‘if the New Zealand economy is to grow sustainably over time’. Meanwhile, Labour also seeks a stronger economy, and will ‘boost growth and jobs through our Regional Development Fund’. It is interesting to note that the Green party judges policy success by ‘improvements in the economy’, and envisages a ‘clean’ ‘carbon-neutral economy’ as the target - aligning with the Green party charter which states ‘unlimited material growth is impossible’.

What does a degrowth future mean at an individual level? It’s difficult to sketch out precisely - our lifestyles depend on many cultural factors beyond economics, and it also depends on where you stand in today’s society. Degrowth is built on the conviction that a good quality of life is possible for all, even with reduced economic consumption. For kiwis living in poverty, struggling to even get adequate nutrition, degrowth must be a life of greater prosperity and wellbeing. Meanwhile, for those in a more comfortable position, the biggest changes may be reduced hours of work, or shifts to different ways of working. It's also likely to include a reduced ability to buy the latest gadgets, and fewer overseas trips. Ultimately, degrowth does not dictate how to live. It is up to everyone to build the kind of lifestyles they want, within ecological limits. Continued economic growth is a more severe restriction on freedom than degrowth would be - except for a privileged few.

Degrowth is described as a ‘missile word’. It opens space for a radical understanding of economics and politics. The policies explored here are an incomplete vision for a thriving Aotearoa - so much depends on the values that we choose to live by. Max Harris’ promotion of values of care, creativity and community is probably a step in the right direction. For the more radical degrowth proposals, more work is needed before they become politically viable, but this can be done in many ways: from discussing degrowth to supporting local projects meeting needs outside of the for-profit sector, whether this is urban gardening, bicycle cooperatives, or community childcare centres. With ever more people questioning the ability of today’s economy to provide good livelihoods, housing, and a stable climate, degrowth ideas must be brought into the debate.

For more reading on degrowth - Prosperity without Growth (Tim Jackson) and In Defense of Degrowth (Giorgos Kallis) are good starting points.

Elliot Hurst is a researcher, writer, and activist currently living in Berlin. He has a background in environmental and water engineering. His primary engagement New Zealand politics is through the Green Party, 350 Aotearoa, Generation Zero, and treating friendly conversations as political propaganda opportunities.