What might an economy without growth look like?

There has been lots of speculation over the years about how a postgrowth economy might work – one that has given up GDP growth as its primary metric of success. Detailed modelling of a postgrowth economy is more rare, and the leader in the field is Peter Victor.

managing-without-growth

Victor has spent years creating and running sophisticated computer models of his native Canada, testing different scenarios. The goal is not to reduce growth for the sake of it, but to reduce the damaging side-effects of growth, such as debt, inequality, pollution or CO2 emissions. At the same time, it’s important to maintain employment levels, reduce poverty and deliver a decent standard of living.

An impossible task? Many would assume so, but Victor’s experiments show that there are policies that could work in combination to deliver a thriving way of life without endless economic growth. The work is detailed in his book Managing Without Growth.

Drawing on a summary of Victor’s work in The Economics of Arrival, the most important elements of a steady state economy would be:

  • Better measures of success than GDP, which lead us towards a more holistic vision of human flourishing.
  • Reining in consumerism and status goods, which would reduce material consumption. Controls on advertising could play a role here
  • Investment in public goods and shared facilities.
  • Balanced trade, stable government spending and zero net investment.
  • Green infrastructure, including renewable energy and low carbon transport.
  • Carbon pricing, and a shift from taxing income to taxing consumption and environmental impact.
  • A stable population.
  • Shorter working hours and more leisure time.
  • A more controlled approach to technological change, with preventive and green technologies preferred.
  • Expanding work in care and human services. These sorts of jobs are seen as less productive through a GDP growth lens, but benefit wellbeing.
  • Poverty reduction through redistribution, and potentially a guaranteed basic income to provide a social safety net.

When these policies were modeled for the Canadian economy, Victor found that unemployment fell to 4%. Greenhouse gas emissions fell in line with international targets. There was a reduction in poverty and living standards went up.

This is obviously far from the final word on how a low or no-growth economy could be run. But it shows that it is feasible, and that the end of growth doesn’t need to mean poverty, unemployment and stagnation.

At Joy in Enough, our vision is to see an economy in service to life – not an economy geared around increasing wealth. Growth cannot be an end in itself. As Victor has shown, this is not naïve or unrealistic, however politically difficult it may be. It is possible, it is sensible, and we can advocate for it with confidence.

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