Is De-Growth Compatible with Capitalism?

Alejandro Nadal

A serious campaign in favor of “de-growth” has been going on for some time and has made important contributions. This movement has opened new avenues for debate and analysis on technology, credit, education and other important areas. It’s an effort that needs support and attention, and we must applaud their initiators and promoters for their boldness and dedication.

De-growth is defined as “a reduction of production and consumption in physical terms through down-scaling and not only through efficiency improvements”. Kallis-Schneider-Martínez Alier explain that de-growth is a smooth, voluntary and equitable downscaling of production and consumption that insures human wellbeing and ecological sustainability locally as well as globally on the short and long term. Thus, de-growth is not limited to a technological dimension.

A conference in Barcelona presented several policy measures aimed at bringing de-growth to fruition. Some of these are related to macroeconomic policies but their effectiveness remains unclear. For example, monetary reform with the elimination of fiat money may or may not lead to de-growth or stable steady state economies.

But there is a fundamental problem with de-growth (or zero growth) theories: they perceive growth as stemming from manias, fetishism, cultural or psychological roots. The best example of this worldview can be found in Serge Latouche.

The problem with this perspective is that the cause of growth becomes psychological, a question of mentalities and even fashion. The idea that growth could originate from endogenous forces in capitalist economies is ignored.

Growth is not only a cultural phenomenon or a feature of a maniac mentality. It is the direct consequence of how capitalist economies operate. This is true of capitalism as it operated in Genoa in the sixteenth century, and it is true today with the mega-corporations that rule global markets. The purpose of capital is to produce profits without end, that’s the meaning of its particular form of circulation. Its purpose is not to produce useful things or useless stuff, its object is to produce profits without end and produce more capital. This is the engine of accumulation and it is fuelled by inter-capitalist competition.

In the words of Marx’s Grundrisse, “Conceptually, competition is nothing other than the inner nature of capital, its essential character, appearing in and realized as the reciprocal interaction of many capitals with one another, the inner tendency [presents itself] as external necessity. Capital exists and can only exist as many capitals, and its self-determination therefore appears as their reciprocal interaction with one another.” By the forces of competition, “capital is continuously harassed: March! March!” Thus, Marx’s analysis shows convincingly that capital can only exist as private centres of accumulation that are driven by (inter-capitalist) competition. This is why, in its quest to expand and survive (as an independent centre of accumulation) capital is continuously opening new spaces for profitability: new products, new markets. The corollary of this is that the only way in which we can get rid of “growth mania” is by getting rid of capitalism. It is not possible to have capitalism without growth.

Is there a technological fix out of this? In other words, can we have such an efficient technological infrastructure (in buildings, energy and transport systems, manufacturing, etc.) that even with growth the ecological footprint could be reduced? This remains to be seen, but one phenomenon seems to conspire against this: the rebound effect. As technologies become more efficient and unit costs become smaller, consumption increases. Either existing consumers deepen their consumption, or more people have access to the objects or services being put on the marketplace. The end result is that the positive effects of greater efficiency are cancelled by deepening consumption rates. And let’s not forget what happens when consumption stops or slows down: those centres of accumulation cannot sell their commodities, inventories grow, unemployment soars and we have recessions, depressions and crises.

From the side of production, for those individual centres of accumulation every gadget, every nook and cranny in the world, or any vast expanse of geographical space is a space waiting to be occupied for profits. From pep pills to tranquilizers, food and water, health and even genetic resources or nano-materials, to the anxious eyes of capital all of these dimensions are but spaces for profitability. Talk about investing in “natural capital” as a way out to the dilemma is devoid of any sense. It could very well be that, in the words of Richard Smith we either save capitalism or save ourselves, we cannot do both.

5 Responses to “Is De-Growth Compatible with Capitalism?”

  1. LennertMariaWeber says:

    This really is a dilemma the moralists, conversationists and the concept of “sustainable development” itself is facing. The belief/concept that the three types of capital (economic, ecological and social) are interchangable in a capitalist society. From a pure welfare point of view, this makes sense. The only way out at the moment seems to be (a) regulate the capitalist system as to internalize all externalized costs or even more to offset prior damage. Which could mean as an example that on every ton of CO2 you need to somehow (plant trees,etc) take 1,2 tons out of the system. Or (b) change the capitalist system so that the “need” for profit diminishes. Alternative monetary systems such as local currencies, which promote localized production and consumption, with a negative rate of interest so that an investment would still be profitable with zero net profits. Including risk, etc. Regarding Oppertunity Costs of Course. Don’t see this possible on a large scale though.
    Some feedback on these thoughts would be quite nice

    Great blog by the way. I really enjoy reading it

  2. Glenn Ashton says:

    This really is a rather pointless discourse – not surprising really, given its ephemeral nature.
    It may be an interesting academic exercise to examine the concept of de-growth but its a futile, time-wasting and entropic discourse given its pointlessness. Unless the commentator cannot perceive that the capitalist system will never, by its very nature, be capable of growth as de-growth – the two are mutually exclusive, no worse, they are a practical contradiction of reality – and wants to just jabber on about some sort of theoretical case in point, then have the discussion.
    Otherwise it would seem so much more useful to actually try to engage in looking at real solutions to the mess we are in than in wasting time on nonsense.

  3. Pierre Champagne says:

    There is a real solution that works within the market system and is more compatible with it than other environmental strategies. It is pragmatic, implementable, and free. It involves green growth in green sectors and degrowth in non-green sectors of the economy (doubling the greening effect). More importantly if combined with depopulation, it could produce net degrowth (a lower world GDP) with incomes (per captia GDP) being maintained at the same level or even increased.

    The trick is in TOTAL GDP vs PER CAPITA GDP. See the link above for the full explanation.

  4. david says:

    It seems that the author has ignored the basis upon which the process of capital accumulation takes place – who is getting screwed in the process? Oh, the worker who expends his or labour-power beyond what is necessary. This extra expenditure is the source of surplus value and thereby the basis of “capital.” And the short answer to the question of whether capital can be taken on a de-growth pathway is NO! The very idea contradicts the logic and structure of the system.