No inclusive development without a post-growth economy

By Crelis Rammelt

Environmental degradation and social injustice are deeply enmeshed with the growth economy. Applying green and inclusive lubricants to its mechanisms is not the solution. We must abandon growth itself.

We live in a world where the richest 1% of the population earns as much as the poorest 50%. In the last 40 years, the average income of the 1% grew 11 times faster than the remaining 99%. Meanwhile, claims that extreme poverty has been reduced can only be upheld by setting the bar ridiculously low. A more credible approach suggests that the number of people worldwide whose incomes prevent them from escaping poverty rose by 150% in the last 40 years. Despite overwhelming proof to the contrary, the idea persists that the poor will somehow catch up. Pro-growth proponents insist that this is precisely because the benefits of growth are unevenly shared, that growth must become inclusive. We are supposed to step up our efforts to improve the conditions under which the poor are assimilated in the (usually) booming global economy. Informal workers, who constitute 61% of the global workforce, do indeed face precarious working conditions, low pay and human rights abuses. But growth won’t resolve these problems, for the simple reason that it gains from them.

A similar case can be made against green growth. Just three years ago, the world economy discarded 61 billion tons of waste and absorbed 92 billion tons of natural resources (predicted to rise to 184 billion tons in 2050). This transformation of resources into waste is referred to as the ‘global metabolism’ and has expanded exponentially alongside economic growth for decades. World GDP growth also correlates strongly with biodiversity loss, energy consumption, consumption emissions and other ecological footprints. Pro-growth champions contend that we must not confuse past correlations with causation. We are supposed to step up our efforts towards the ideal of ‘absolute decoupling’: the contraction of our global metabolism while we allow economies to swell. However, when we increase efficiency in material use, we lower production costs, boost investment and thus expand rather than reduce our metabolism. Growth drove us into unsafe territory; it won’t drive us back.

Fiddling with the existing model of economic growth cannot meaningfully reduce poverty and safeguard the environment. The changes needed are much more fundamental – starting with the redistribution of a finite and unequally shared environmental utilisation space. If we don’t, inequality in its various forms will continue to reproduce vulnerabilities.

Inequality reproduces poverty

Here are a few examples. Free markets supposedly allocate goods and services to maximise everyone’s well-being. In reality, all sorts of luxurious desires coexist with, and lead to, intolerable deprivations. An estimated three billion people cannot afford a healthy diet, even if they spend most of their income on food. This problem arises from globally-integrated and deregulated markets that respond only to purchasing power, which is increasingly unequal. For instance, US meat consumption amounts to twice that of India and Africa combined. Higher incomes in the global North have led to net flows of meat and animal feed from the global South. Such disparities also apply to water, energy, land and other key resources. Income inequalities leave the poor with the scraps.

If markets fail the poor, states might jump in with the provision of basic public and merit goods, such as food stamps or subsidised farming inputs. But again, wider global disparities undermine access to these goods. Over the course of the 20th century, unequal exchange in the World system led to heavy debt burdens in the South, which strain the capacity of states to fulfil their duties to the poor. For example, every second, India’s rising health-care costs push two more people into poverty.

A final example. Individuals in high-income countries have a material footprint 15 times greater than those in low-income countries. High-income countries thus bear most of the blame for today’s ecological disruptions, which go on to produce material shortages. The affluent have appropriated their ever-increasing resources and discarded their ever-increasing waste at the expense of the poor. These injustices escalate as our economies begin to reach the limits of growth. The rising cost of material extraction instigates resource grabs that separate people from previously free services upon which they depended for food, shelter and livelihoods. The poor also lose access through indirect deterioration when the impacts of ever-increasing waste flows are externalised, e.g., through pollution havens that harm ecosystems in the peripheries. In the face of limits, the system becomes exceedingly exploitative.

These arguments lead to three conclusions. First, given the unsafe and unequal appropriation of nature, it is only fair that the rich take on the bulk of the effort of restoring safe and fair conditions. Second, the only way they can effectively accomplish that is by shrinking their oversized economies: green growth offers no escape from this imperative for degrowth. Third, further shrinking on the part of the rich is needed for the poor to grow their material standards of living to a minimum level of dignity and resilience. Inclusive growth offers no escape from this imperative for redistribution via degrowth.

Growth is written in capitalism’s DNA

What is the implication of all this? Wealthy nations must release their exploitative grip on nature and materially downscale by 40-50%. To borrow the doughnut economy metaphor, we need degrowth to trim both the biophysical transgressions of the outer-ring and the social shortfalls of the inner-ring. But we must take another step! As discussed, wider inequalities reproduce vulnerabilities. How we allocate and distribute the entire environmental utilisation space will determine whether or not we can rectify social shortfalls. Degrowth therefore means far more than a downscaling of over-consumption to make space for bare minimum material claims. It also entails downscaling profit-seeking investments that drive socially and ecologically destructive accumulation through exploitation, appropriation and externalisation.

This call for degrowth does not fit the dominant growth-based economic system – i.e., capitalism. Let me repeat here that this system grows because it ignores environmental boundaries and undermines social justice. However, we can’t simply get rid of growth. It is written in capitalism’s DNA. Virtually no entrepreneur or corporation can ignore this without facing foreclosure or bankruptcy: it’s grow or die. Degrowth therefore implies a systemic transformation, and a thorough redistribution of wealth.

Vested interest will obviously resist. While the poor have been dispossessed by this ever-expanding system, the wealthy have gained both economic and political power. Weakened by debt and tax evasion, states in the global South compete to attract capital by lowering their environmental and labor standards. Corporations thus increase their ability to externalise costs and minimise liability. All of this subverts democratic processes and blocks anything sniffing of structural change.

So where do we go from here? As development scholars, we must start by abandoning the growth doctrine and redefining SDG 8. Aggregate economic growth, even of the ‘green’ and ‘inclusive’ kind, is entangled with socio-ecological harm. Only when it frees itself from these entanglements can development hope to become socially, ecologically and relationally inclusive.

This article is based on the paper “Inclusive is not an adjective, it transforms development: A post-growth interpretation of Inclusive Development”, Environmental Science & Policy, October 2021”

Note: This article gives the views of the author, and not the position of the EADI Debating Development Blog or the European Association of Development Research and Training Institutes

Crelis Rammelt is an assistant professor in environmental geography and development studies at the Department of Geography, Planning and International Development Studies, Faculty of Social and Behavioural Sciences. He is also teaching at the Institute for Interdisciplinary Studies, at the UvA Faculty of Science. His research and teaching focus on forging links across disciplinary divides—mostly in the areas of political ecology, post-development, degrowth and systems science. Crelis has also been involved in establishing the Dutch degrowth platform Ontgroei and leading an action research and social justice programme with practitioners in Bangladesh.

Image: Gerd Altmann on Pixabay