The Report That Imagines a Rich World Without Growth

Can you imagine living in a society where the entire population, across the whole planet, received an annual income of 60,000 euros? That figure corresponds to roughly 5,000 euros a month, somewhat above the current average in North America, but far above the 290-euro average in sub-Saharan Africa. Well, that is the figure that the recently published Global Justice Report (GJR) considers viable for combating global inequality and its consequences while also averting global warming.

The report was produced by the team of economist Thomas Piketty, and it deserves special recognition because it strives to demonstrate that the fight against inequality necessarily goes hand in hand with the defence of the planet that sustains life. This runs against the grain of a long tradition that holds that the fight against inequality—as well as the economic question in general—is only possible through economic growth and at the expense of the natural environment; a way of thinking that still pervades most of progressive economic thought and, of course, conservative thought as well.

The keystone of the report is, in fact, the recognition that economic activity necessarily entails the consumption of natural resources and energy, which generates ecological impacts, most notably climate change. Thus, the only way for the global average temperature in the year 2100 to remain below 2°C relative to the pre-industrial era—and thereby avert a catastrophe with unpredictable costs—is to reduce economic activity starting today —that is, to reduce economic growth. In this sense, the report shares central intuitions of the ‘degrowth’ tradition, though its authors do not adopt the label. And it also contributes substantial nuances of its own.

To begin with, this is not merely a downward rescaling of economic activity, as would occur with an economic crisis, a pandemic, or a war. What it advocates is a general reorientation of the model of production and consumption, seeking a dematerialization of the economy, which means the growth of sectors that are low in material and energy consumption but highly intensive in providing well-being: for example, the education and health sectors would grow enormously. As the ecological economist Herman Daly noted, it is important to remember that growth and development are not the same thing, and that while the former refers to the monetary value of production, the latter concerns the services that directly provide us with well-being or happiness. The GJR focuses on the biophysical and social conditions that make the development of the world’s population as a whole viable; nothing more and nothing less.

In these pages, we have often discussed the paradoxical role that technology and productivity play under the capitalist economic system. The point is that although innovations make it possible to produce the same quantity of goods in less time, under capitalism this option is foreclosed. The reason is that the system's logic forces all agents to compete with one another and, consequently, to resort to technology not to produce the same amount in less time, but to produce more in the same time. The liberating option—working less while maintaining well-being—is thus blocked. In this way, over two centuries productivity has increased extraordinarily, but most of that increase has translated into more production and consumption rather than more free time. Only the struggle of the labour movement managed to offset this in part, securing that a fraction of those gains was devoted to reducing the working day. The GJR report builds on this idea by proposing that working hours should be reduced from the current average of 2,100 hours per year toward 1,000 hours by 2100. This would amount, roughly, to workdays of a little over four hours, or to workweeks notably shorter than today’s.

One of the central variables that calibrates the entire model is precisely what they call sufficiency, which has to do with consumption. With far shorter working days and with the growth of immaterial sectors such as education and health, consumption must necessarily be based on a change in habits: a more ecologically sustainable diet (with a 25% reduction in meat consumption worldwide) and even non-linear taxes where the first purchases of a good (such as a flight) are affordable, but subsequent ones less so. All these proposals respond to a single idea: shifting well-being away from the accumulation of material goods and toward universal access to services, free time, and economic security. Sufficiency also entails a rapid and forceful energy transition to decarbonise the economy, as well as a reforestation effort to restore the forest cover that existed in 1900. That is, this is not a degrowth that seeks to return to the parameters of pre-industrial societies, but rather a harnessing of accumulated knowledge and technology to “leap” toward a new renewable energy model.

For all this to be possible, the report stresses the need to combat income inequality both between countries (to allow the poorest to grow and converge toward a dignified standard of living) and within each country. Not only for moral reasons but also economic ones: the money needed to launch the program comes from heavy taxation of the wealthiest strata. The report does not appeal to money creation, but to redistribution, since the spending is financed at the outset by taxing those who have the most. Then, in turn, a common fund (belonging to all countries) is created to invest in sustainable companies and obtain the necessary financing: an idea with echoes of radical social-democratic proposals. In any case, this transfer of income and wealth from the upper strata to the base of society explains why the model reconciles near-zero economic growth in the richest countries with the fact that the majority of their populations can considerably improve both their incomes and their well-being. In the same way that economic growth currently does not “reach” a large part of the population, the absence of aggregate growth is compatible with an improvement in the individual well-being of the majority.

Although the report contains much more information and data, it is important to retain the overall picture: it is possible to imagine a world where the entire population has very reasonable minimum standards of living (health, education, free time), where well-being depends neither on economic growth nor on unlimited consumption of natural resources, and where inequality has been drastically reduced as a result of a major offensive against the economic elites. Thanks to this, the parameters of the Earth System can be kept within margins that, while not risk-free, avoid the points of no return. It sounds radical, and in a certain sense it is (which is not a bad thing, because it means going to the root of the problem), but any other alternative—such as carrying on as before—would mean venturing into very dark territory for human civilisation and for life in general.

Against that dark territory, the GJR report inscribes itself in the utopian tradition, but in its positive connotation: the kind that, as in William Morris’s News from Nowhere, made people dream of desirable worlds and mobilised them politically. The chief virtue of those classic utopias, from More to those sketched by Marx, is the desire to project desirable horizons into the future that, in the present, had to begin to be built. We need these utopian guides because they trace the perimeter of what is possible, and they chart a path that, although not perfectly defined—it never will be—is already clearly the road we must travel.