Prosperity without growth - is it possible?

28 May, 2025

Much of the literature about the post-growth world has been developed by scholars concerned about climate change and the environment more generally -- the assumption being that infinite growth in a world with finite resources is simply not sustainable. A subset of these advocate for "green growth"; that is, development of an industrial policy which would encourage transition to renewable energy sources and, hopefully, would allow for GDP growth while reducing carbon emissions.

Yet another subset of thinkers would be categorized as "degrowthers" -- those who believe a smaller economy (in exchange for less consumption, less CO2 emissions, and greater sustainability) is a desirable goal.

(If you are wondering: I would not categorize myself as a degrowther - I think low or negative growth will be the outcome of the population changes we are observing but I am not necessarily convinced that "degrowth" should be an end in and of itself.)

Degrowth raises certain questions. Much of the world is still very poor. It is far easier to create broad prosperity on a growing economy than a shrinking one. Is it possible maintain our current standard of living in an environment of negative growth, or will we need to become accustomed to a lower standard of living? And would "degrowth" strangle developing economies, which have relied on growth (and Western consumption of resources and manufactured goods) to lift their populations into the global middle class? These, incidentally, are the same questions that must be asked about a world with shrinking populations.

The degrowth advocates have done some interesting work describing how a theoretical low growth economy might work. I think considering their insights might be informative as we consider how societies might adapt to a population shock, which might have a similar effect. Here is an article, from The New Yorker, which describes some for their work and worldview. It is behind a paywall but I have excerpted key segments --

A decade ago, Peter A. Victor, an emeritus professor of environmental economics at York University, in Toronto, built a computer model, since updated, to see what would happen to the Canadian economy under various scenarios. In a degrowth scenario, G.D.P. per person was gradually reduced by roughly fifty per cent over thirty years, but offsetting policies—such as work-sharing, redistributive-income transfers, and adult-education programs—were also introduced. Reporting his results in a 2011 paper, Victor wrote, “There are very substantial reductions in unemployment, the human poverty index and the debt to GDP ratio. Greenhouse gas emissions are reduced by nearly 80%. This reduction results from the decline in GDP and a very substantial carbon tax.”

...

To ameliorate the effects of slower G.D.P. growth, policies such as work-sharing and universal basic income could also be considered—especially if the warnings about artificial intelligence eliminating huge numbers of jobs turn out to be true. In the United Kingdom, the New Economics Foundation has called for the standard workweek to be shortened from thirty-five to twenty-one hours, a proposal that harks back to Victor’s modelling and Keynes’s 1930 essay. Proposals like these would have to be financed by higher taxes, particularly on the wealthy, but that redistributive aspect is a feature, not a bug. In a low-growth world, it is essential to share what growth there is more equitably. Otherwise, as Beckerman argued many years ago, the consequences could be catastrophic.¹

In other words: fewer work hours and higher taxes in the most wealthy to fund education programs and income programs like UBI.

My initial opinion is that these ideas are, today, political unfeasible. But at least they are ideas - and if the post growth future takes hold then they may shape the future.

The whole article is worth a read, just beyond the paywall.

#adaptation #degrowth #economics