May 17, 2023 - 10:00am

For the last hundred years or so, a primary goal of most governments has been achieving economic growth – that is, boosting GDP from one year to the next. This was even true in the Soviet Union, where state-owned companies would boast about their production of key commodities like steel.

Yet economic growth isn’t universally popular. A sizeable contingent of academics and activists, mostly on the political Left, believes it’s something we shouldn’t be striving for. As Stian Westlake notes, this view became fashionable among British progressives in the late 2000s, with support from think tank reports such as “Growth Isn’t Possible”, as well as books like Tim Jackson’s Prosperity Without Growth.

A core tenet of the “degrowth” movement is that much economic activity is wasteful or even harmful, and we ought to focus on “human well-being” instead. As to what that might entail, some proposed measures include “scaling down destructive sectors” and introducing a “green jobs guarantee”.

One might be tempted to dismiss “degrowth” as a minor academic fad. But its influence should not be underestimated.

In December of last year, Nature – one of the world’s most prestigious scientific journals – published an article titled “Degrowth can work — here’s how science can help”. What’s more, three of the authors have been awarded €9.9 million by the European Research Council to study “post-growth” policies. Since the ERC’s money comes from the EU budget, it is European taxpayers who are footing the bill.

Now, a lot of questionable research gets funded and this project is at least described in intelligible English (which is more than can be said for some academic work). There may even be value in considering what a “post-growth” world might look like.

With that said, the entire “degrowth” movement seems to be based on a fallacy – that growth in GDP is the same as growth in the use of resources. Although this fallacy has been repeatedly debunked, it somehow refuses to die (perhaps because many “degrowthers” are motivated by opposition to capitalism as much as by concern for the environment).

It’s fairly trivial to show that GDP does not measure the use of resources. Between 1995 and 2020, real GDP per capita in Sweden increased by 49%. Yet over the same period, trade-adjusted energy use per person fell by 12%. So despite using substantially less energy, Swedes had access to almost 50% more goods and services. And it’s a similar story in many other countries.

What this means is that GDP can keep on increasing even as our environmental impact goes down. In fact, there’s evidence that pollution rises during the early stages of development and then falls during the later stages – as countries spend more money on environmental goods.

Of course, we can’t get complacent and assume that so long as the economy’s humming along, everything else will just work itself out. Safeguarding the environment requires sensible regulations, as well as incentives to encourage innovation. But “degrowth” really makes no sense, unless you actually want to be poorer.

Ironically, Britain has managed to achieve “degrowth” on one important measure: since 2008, output per hour has barely risen. Yet, as Westlake notes, this clear trend toward a steady-state economy has not been cheered by critics of GDP. One suspects that if they saw true “degrowth” in action, they’d be even less enthused.

Noah Carl is an independent researcher and writer.