When your car is malfunctioning and you take it to a mechanic, you hope that they’ll diagnose the problem and give you some repair suggestions and costings. You don’t expect them to discourse lengthily on the wider transport system or on government priorities vis-à-vis roads and other infrastructure. It’s not their job.
I’d like to suggest that economists should likewise be seen as the mechanics of the political economy. I’m interested in their opinions on the pros and cons of different policy instruments for achieving desired political and social goals, using the technical skills developed in their discipline. I’m not interested in their opinions about what political and social goals are desirable – matters on which I don’t consider them to have more legitimate authority than anyone else.
I mention this in the context of a tweet from Branko Milanovic, an expert on the economics of global inequality (whose work was previously discussed on Small Farm Future here), in which he attempted to ridicule the ‘doughnut economics’ thinking of heterodox economist Kate Raworth, and by implication the wider tradition of alternative, degrowth-oriented economics.
Milanovic tweeted “Here is a list of some things that Doughnut economists could advocate if they seriously believed that the planet is in danger and that world GDP must not increase and yet abject global poverty must be reduced
Reduce work week to 2 days
Increase highest marginal tax rates to 80%
Double indirect taxes on all polluting goods
Triple the price of oil
Double subsidies to all renewable sources of energy
Sell (very expensive) meat only two days a week
Ban cheap airplane companies and double the price of air flights
Introduce a £1000 tax for all travel by car & airplanes outside the UK
Introduce UBI of say £200 per person per week
Define the goal of halving GDP and real incomes by 50% in 10 years
He added: “Then they should create a movement that would try, through political action, to implement these measures and find out how much support they get from rich countries’ populations.”
Well now, I’ve already documented my own issues with Raworth’s economics, but writing as someone who does seriously believe that human wellbeing (if not ‘the planet’) is in danger, that it’s probably not a great idea for world GDP to increase, and that abject poverty must be reduced, those suggestions all make a lot of sense to me. However, I’m not a fully paid up member of the economics tribe, so I’d be interested to hear the analyses of Milanovic and other economists concerning the detailed implications of these policy measures, which I’m sure could help sharpen the debate over how to improve equity, wellbeing and sustainability. I’m not, however, much interested in the fact that Professor Milanovic considers these measures absurd.
I’d like to reformulate Milanovic’s approach along the lines suggested by Raworth of being ‘agnostic’ about economic growth. So let’s take the last of his suggestions. Instead of defining the goal of halving GDP and real incomes by 50% in 10 years, I’d like to define the goal of halving (or, better, quartering) greenhouse gas emissions in 10 years, while reducing economic inequality to a global Gini value of, say, 30 over the same period. I’m happy for this to be done with any high-tech whizz-bangery Professor Milanovic cares to choose, so long as we hit our 10-year targets – though to my mind this implies it would have to be technologies that are available to roll out at scale right now, so vague talk about the future possibilities of thorium or fusion reactors, or emerging CCS technologies and suchlike won’t cut it. If it can be done while increasing GDP, then great. I struggle to see how that would be possible, but I’m open to suggestions from economists toiling down in the garage of the global political economy as to how they might pull it off. I’m not, however, open to suggestions from economists that the goals I’m proposing are inappropriate, since the grounds of these goals are not economic and therefore fall outside their disciplinary ambit.
Economists do like to weigh in on normative issues of this kind nonetheless – and here is where, for me, they cease being potentially useful mechanics and start to become priests, magicians or quacks. Still, the nature of the dogma, the magic or the quackery is interesting for what it reveals about contemporary ideology, so let us probe it a little further.
The first level of magical thinking is the one purveyed in Milanovic’s afterthought: people won’t vote for ‘degrowth’ policies, or at least people in rich countries whose votes count most for the way the world works won’t vote for them – so the idea is dismissed as absurd. However, if we make the uncontroversial assumption that human wellbeing really is seriously threatened by the existing structure of the global economy, then where is the absurdity? Not with the degrowth, but with the politics. Much as I acknowledge that the unenlightened short-term self-interest of a rich minority of the world’s population does create genuine obstacles for implementing a more sustainable political economy, the real force of Milanovic’s point here is surely a push to rethink the politics. I plan to write some more on this soon, but I’m unimpressed by the notion that current voter support is some kind of litmus test for policy plausibility. The fact that contemporary politicians are still playing petty power games and trying to buy off voters with absurd, undeliverable promises is an indictment of our current political maturity and an index of the difficult path ahead. It’s not an argument against degrowth.
Various other levels of magical thinking were amply demonstrated by respondents to Milanovic’s tweet on the thread linked above. One is the basically ecomodernist notion that economic growth and prosperity are necessary in order to create the surplus needed to invest in environment-saving technologies – in the words of the Tweeter ‘Econartist’, “Invest in renewable and nuclear tech big time, decommission coal, electrify the transport system, explore the myriad of proposed geoengineering solutions – anyone who tells you this can’t be done or that it’s too expensive is a charlatan”. Well, call me a charlatan but the problem here is that there’s no compelling evidence that ongoing global economic growth funds reduced emissions or other environmental positives…though doubtless we’ll soon be seeing projections on the imminent downturn of the environmental Kuznets ‘wave’. You get the sense that there may just be a stray vowel somewhere near the start of ‘Econartist’s’ Twitter handle.
Another strand of magic invoked by Econartist is the notion that exogenous environmental constraint on human action is some kind of Malthusian fallacy. Malthus-as-bogeyman is widely invoked nowadays – usually to purvey the tautological argument that since Malthus posited exogenous (or even just actual) environmental constraint on human action, and since as-we-all-know Malthus was wrong (and had nasty politics to boot), then clearly any argument that invokes environmental constraint on human action is Malthusian, and therefore wrong.
Luckily I find that in my day job as a grower it’s possible for me to say things like “The weather’s been poor this year – I expect we’ll get a lower crop yield” without being dismissed by my fellow growers for my Malthusianism. But when you’re far away from directly experienced environmental constraint – like on Twitter, for example, or in the average university – it’s easy to invoke Malthus-as-bogeyman and/or the magic of human ingenuity to banish the danger of the natural world intruding on one’s anthropocentric reveries. This debate from a while back here on Small Farm Future convinced me that if we want to insist on invoking Malthus-as-bogeyman then we need a carefully circumscribed definition of Malthusianism. Following Andrew in that debate, I’d suggest that it should be the notion that the uncontrollable passions of the lower orders result in an excess of population over available resources. To extend an anti-Malthusianism further than that strays into the kind of magical thinking that assumes a priori that human ingenuity inevitably banishes all non-human constraint. It clearly doesn’t…and furthermore it fortunately doesn’t need to (which is why I find Tom X Hart’s recent tweet to me that “the left is anti-nature” a depressing sign of the needless techno-mythologism into which too much of the left has sunk).
Finally, the issue that the growth folks never seem to confront is where it ends – and this is where the numbers themselves start to get magical. In 1967 global GDP was 16.1 trillion at constant 2010 US$, and in 2017 it was 80.08 trillion. Current average global economic growth averages about 2.3% per annum, which is pretty much the minimum necessary to avoid recession in the existing capitalist world economy. Projecting that forward over the next 50 years suggests a global GDP in 2067 of about 255 trillion, a global economy about 16 times the size of the 1967 one (the data are here). Where’s all that economic activity going to come from? In view of the lack of absolute decoupling between economic growth and environmental degradation, what environmental effects would that kind of economy have? No wonder the growth thinkers are getting so enthralled by space travel – more magic.
I suspect the main reason we’ve become so enamoured of economic growth is that it’s the only way of addressing the growing scandal of global inequality without fundamental political change. It doesn’t address global inequality very well, since most of the additional income created by economic growth goes to the already well off (for example, as Milanovic documents in his book Global Inequality, 44% of the increase in income between 1988 and 2008 went to the richest 5% of people). This inequality is systemic, as recognised long ago by ecological economics pioneer Herman Daly in his Steady-State Economics:
“We are addicted to growth because we are addicted to large inequalities in income and wealth. What about the poor? Let them eat growth! Better yet, let them feed on the hope of eating growth in the future! We have been growing for some time, and we still have poverty. It should be obvious that what grows is the reinvested surplus, and the benefits of growth go to the owners of the surplus who are not poor” (pp.103-4)
But the neat thing about the ideology of growth is that it’s easily deployed to dismiss the ‘elitism’ of its alternatives, along the lines that while most growth-induced income increases indeed go to the already well-off, nobody can conscionably oppose the small gains that go to the poor. So, for example, there were about 118 million fewer people earning less than $1.90 per day in 2013 than in 2012 – who can oppose that trend, even if the very rich were rewarded disproportionately more?
Certainly, this is a line that Milanovic spins, as here:
“One can hardly overestimate [the importance of economic growth] in poorer countries as a means of making the lives of ordinary people better. The disparagement of growth that surfaces from time to time comes mostly from rich people in rich countries who believe they can dispense with more economic growth. But these people are either deluding themselves or are hypocritical.” (Global Inequality, p.232)
…a point Milanovic proceeds to substantiate with several fairly specious arguments, including references to the secessionist and isolationist waves convulsing the politics of the west. Here, his arguments have already been overtaken by events, since – if we assume that people voted on the basis of rational calculation – support for the likes of Trump and Brexit must have involved a preference for political autonomy over economic increase.
But, more importantly, with such arguments Milanovic and the cadres of growth-promoters stray from the domain of their economic expertise into wider realms of political opinion where they have no firmer technical grounding for their views than anyone else. So I return to my original challenge. I’d like to see a world with a minimal drawdown of fossil fuels and other polluting and unsustainable resources, and much reduced inequalities in wealth and income. How to achieve that politically poses tricky questions that economists have no particular expertise to answer. How to achieve it economically is an arena where they can doubtless contribute. Milanovic’s list above strikes me, speaking as a non-expert, as a pretty good suite of economic policies for starting down the road to sustainability and equity. What I’d really like to see from him and other economists is in-depth analysis of the various pros and cons of each policy for delivering the world I and many other critics of economic-growth-at-all-costs would like to see. His thorough derision of all those policies holds no particular interest for me over that of any other online opinion-monger, with which the market is currently quite saturated, and the price therefore low.