29 Apr Episode 108: How Our ‘GDP’ Obsession Drives Climate Crisis and Inequality
Citations Needed | April 29, 2020 | Transcript
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Nima Shirazi: Welcome to Citations Needed a podcast on the media, power, PR and the history of bullshit. I am Nima Shirazi.
Adam Johnson: I’m Adam Johnson.
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Nima: “Economists’ forecasts for GDP growth in 2020 vary widely,” says The Economist. “Algeria’s GDP growth falls to 0.8% in 2019,” one Reuters headline reads. “GDP — the broadest measure of economic activity — grew at an annual rate of just 1.9% during the third quarter” NPR warns. Everywhere we turn for economic news, the Gross Domestic Product — GDP — is held up as the key proxy for prosperity and sound fiscal policy.
Adam: Since its codification as the gold standard for measuring prosperity at the Bretton Wood conference in 1944 during the creation of the the International Monetary Fund — the system that would more or less create the Global North-dominated economic order as we know it today — the GDP has been the most popular metric used by American and British media when measuring a nation’s prosperity.
Nima: The GDP and its close cousin, the Gross National Product — the GNP — have, of course, not been without its critics for decades, but prying it from its top position as the most important policy goal has been an impossible task, and despite many labor activists, environmentalists and economists leveling critiques at its myopic, capitalist ideology, the metric has remained central to how the media and lawmakers determine fiscal policy.
Adam: But what is the GDP exactly? How did it become the go-to proxy for prosperity in Western media? What are its ideological inputs, and how did post-war notions of colonialism and extractivism help cement its place in our collective mindset? And what, more importantly, do activists argue we should replace it with? On this episode of Citations Needed we will explore these questions and examine how centralizing Gross Domestic Product by its very design obscures climate crisis, labor abuses, racism, drudgery, and a whole host of society’s ills.
Nima: Later on the show, we will be joined by Dr. Jason Hickel, economic anthropologist, author and fellow of the Royal Society of Arts. He is the author, most recently, of The Divide: A Brief Guide to Global Inequality and Its Solutions.
Jason Hickel: The richest one percent of the human population pocket 22 percent of total GDP, which is extraordinary, I mean, almost a quarter of the outputs of the global economy, and all of the associated human ecological damage, goes into the pockets of millionaires, of the very richest. If you think about it, somehow we’ve all been persuaded to step on the accelerator of growth at extraordinary ecological costs during the middle of a crisis of ecological and climate breakdown, all to make rich people richer.
Adam: So let’s begin by talking about what GDP is. So we’re going to start off doing a 10th-grade rhetoric essay by saying, “Webster’s Dictionary defines GDP…” Generally speaking, the GDP is defined as the “aggregate measure of production equal to the sum of the gross values added of all resident and institutional units engaged in production and services (plus any taxes, and minus any subsidies, on products not included in the value of their outputs).” The IMF defines GDP as a, quote, “measure of the monetary value of final goods and services — that are bought by the final user — produced in a country in a given period of time.”
Nima: Okay, so what does that actually mean? GDP — the Gross Domestic Product — is the total market value of everything made and sold within the borders of a country, regardless of the nationality of who’s doing the earning money from the sale. The related term, GNP — or Gross National Product — refers to the value of everything made and sold by a country’s residents, regardless of where they live in the world. So for instance, if someone living in Nebraska earns money from a foreign investment in France, that value would be included in GNP but not GDP, while the value of goods produced by a French company that has a factory in Nebraska would be part of GDP but not GNP.
Adam: GDP is the sum of consumption which is investment, government spending and net exports. It is often you’ll see it adjusted for purchasing power, which is called GDP PPP, which is purchasing power parity which basically, for lack of a better explanation, adjusts the relative value of currency so its applicable across different countries.
Nima: So GDP is something that you see in headlines all the time and definitely right now during our current global crisis, global health and economic crisis, we see this all the time. For instance, back on March 21, 2020, Forbes had the headline, “COVID-19’s Worst Case? 10.6% Jobless Rate, $1.5 Trillion GDP Drop.” About a month later, on April 18, World Economic Forum noted, quote, “The IMF sees GDP per capita shrinking across 170 nations due to the coronavirus pandemic, but the projection ‘may actually be a more optimistic picture than reality produces.’ The IMF noted that even a short-lived outbreak would drag the world into a 3% GDP contraction.” And then on April 20 Marketplace reported, “What’s going to happen to GDP?” And they quoted Jay Brydon, acting economist at Wells Fargo as saying this, quote, “We think you’re looking at an annualized contraction somewhere between 20 and 25%.” End quote.
Adam: Overall, the rise of the GDP as the gold standard happened without really a lot of debate or fanfare, again, internally, there was conversations amongst economists, there has been for decades, I don’t want to downplay that, there has been criticism from environmentalists, there’s been criticism from labor activists, certainly from the Global South, certainly from indigenous groups, a lot of the criticisms you’ll hear today are not new, we did not invent them but what is curious or what is notable is the degree to which these criticisms have never really bubbled to the surface to really challenge the orthodoxy of GDP, which still, going on almost 70 years later, is still the primary metric with which we measure the economic or prosperous properties of a particular country.
Nima: But how did we get here? First, a little bit of history. The assessment of national wealth can really be traced back to Ireland in the 1650s, when Oliver Cromwell’s government sought to cleanse the best lands of Catholics and redistribute them to the occupying British troops, thereby establishing a permanent repressive military force on the island. The survey of Irish land by army physician William Petty, done solely for the purposes of theft and reallocation, is the first known attempt in Western history to create a total inventory of a nation’s wealth.
But fast forward to the Great Depression. The U.S. government had no national figures on unemployment or production. But in 1932, Simon Kuznets, a professor working with the National Bureau of Economic Research, was tasked by the Commerce Department with creating a data set to assess the state of the national economy. A year and a half later, Kuznets presented a vast volume of data on income to Congress, which helped standardize the GNP, Gross National Product, metric — what is produced and sold by Americans regardless of where they live. Now, Kuznets — who would go on to win the Nobel Prize in Economics decades later, in 1971, for his, quote, “empirically founded interpretation of economic growth which has led to new and deepened insight into the economic and social structure and process of development” end quote — now he wasn’t too keen on the GNP as a useful measurement of economic health for a nation. In fact, he warned Congress against adopting this metric for exactly the reasons it is misused, overused and exploited in our politics and the press today.
Adam: Kuznets would warn, quote, “Economic welfare cannot be adequately measured unless the personal distribution of income is known.” Unquote. This measurement ignores inequity, assuming all gains are the same, not accounting for who’s doing the buying and who’s not. It’s literally all about the knowable exchanges of money, no under-the-table earnings or services are accounted for, nothing that isn’t on some official ledger somewhere. It also, noted Kuznets, masks the toil it takes for labor to literally do the job, simple statistics cover-up the suffering of work itself. Kuznets called this the, quote, “reverse side of income, that is, the intensity and unpleasantness of effort going into the earning of income.” Unquote. So the human cost, the drudgery is glossed over for this sort of glossy end number, the metric pays no mind to power imbalances or inequality or inequity. One $5,000 pair of shoes is the same in the economic measurement as 50 $100 pairs of shoes. It’s just a huge pot of money with no regard to the extraction of natural resources or the operation of social systems that explain it. For example, earnings are tallied, regardless of what they cost people in health or welfare. Our guest today actually, Jason Hickel, puts it well in his book, The Divide and I’m going to read a quick segment from that, quote:
GDP was intended to be a war-time measure, which is why it is so single-minded — almost even violent. It tallies up all money-based activity, but it doesn’t care whether that activity is useful or destructive. If you cut down a forest and sell the timber, GDP goes up. If you strip a mountain range to mine for coal, GDP goes up. If you extend the working day and push back the retirement age, GDP goes up. But GDP includes no cost accounting. It does not measure the cost of losing the forest as a sinkhole for carbon dioxide, or the loss of the mountain range as a home for endangered species, or the toll that too much work takes on people’s bodies and minds and relationships. And not only does it leave out what is bad, it also leaves out much of what is good — for it does not count useful activities that are not monetized. If you grow your own food, clean your own house or take care of your aging parents, GDP says nothing, for these activities don’t involve transacting money. It only counts if you buy these services.
Nima: Right. So while buildings and equipment and products can depreciate in value, which then you know brings GDP for a country down, there’s no corresponding measurement for people working themselves sick or working themselves to death. The sicker we are, the more medication or therapy that we pay for, the longer hours we work and less time we spend with our families and loved ones, the more we spend on child and elder care, all of that is seen as a gain to GDP, not a loss, the more we extract from the ground, the water, our air, the higher our assessment of our own national wealth goes, despite us literally depleting our own resources. Now, Simon Kuznets, who again, helped standardize this kind of metric, saw all this coming back in the ‘30s. In his own report to Congress, he warned, “The welfare of a nation can, therefore, scarcely be inferred from a measurement of national income as defined above.” So there are inherent limitations to using GNP or GDP as some sort of metric in economic health for a nation. It says nothing about who has what wealth, who spends what money, there is no determination of context or equity in this metric. Now, up until 1991, the federal government here in the United States, namely the U.S. Department of Commerce, featured GNP, Gross National Product, so meaning Americans, not people within the United States only, use that metric in its quarterly reports to measure the so-called health of the economy, but in August of that year 1991, the Commerce Department’s Bureau of Economic Analysis made the official switch over from GNP to GDP for its quarterly reports, calling it the quote, “appropriate measure for much of the short-term monitoring and analysis of the U.S. economy.” End quote.
Adam: There’s a growing movement of people who are, again, pushing back against this, not that they haven’t always been there, but there’s an increased call to do this. In 2011, the Institute for Policy Studies wrote an article called “Measuring Progress” by Daphne Wysham, which discussed the creation of the State of Maryland under then Governor Martin O’Malley, introduced what was called a Genuine Progress Indicator, or GPI, that brought different metrics to the well-being. The GDP assessed what, quote, “was left behind” under gross product, “Is the landscape more or less toxic than before? Is the air and water cleaner or dirtier? How well-educated is the populace?” We’ll discuss other ways in which people are trying to create alternative metrics, but this is popular, this is used in Canada, France and other countries. Bhutan has a Gross Domestic Happiness Product, this sort of veers to me, at least personally into kind of like, bullshit land, I don’t know how you measure happiness, I think things like education, you know, it’s also illegal to be homosexual in Bhutan, so I’m not sure how they measure that and their happiness index.
Nima: So that might not be the finest metric to start using right now.
Adam: I like where their heads are at, but I want to be careful not to get too into the hippie-dippie bullshit of, I don’t know, you veer into Demolition Man territory where you swear like, ‘Are you happy?’ I don’t know, I don’t really care if you’re happy.
Nima: Have a joy, joy day.
Adam: Yeah, I’m more concerned if you have food, shelter, education. We’ll talk about those with Hickel and we’ll talk about those later on, but there are people who have attempted to create alternative systems and one of the major critiques of the growth fetishism is this movement called degrowth, which is an effort to prioritize a reduction of growth, with a very firm commitment to decolonization and anticolonialism and anti imperialism. Degrowth is, according to its advocates, an understanding that we need to, quote, “form of society and economy which aims at the well-being of all and sustains the natural basis of life. To achieve degrowth, we need a fundamental transformation of our lives and an extensive cultural change.” So this is basically saying we need to move away from this obsession with growth into something that puts us sort of more in ecological balance. Now that may seem, again, that may also seem a little hippie-dippie, but it’s also kind of inevitable. It’s based on the realities of climate change and consumption and how much raw shit we can exploit in this Earth and I think that, to talk about climate change as this kind of thing that we can tech our way out of or create green energy, I think is, is a bit of a red herring and I’m excited to talk to our guests about this because I really do think to criticize growth fetishism or the GDP as a sort of central metric of our media, we need to really begin to talk about what we’re leaving out and I think much of the degrowth discourse does that.
Nima: We will now be joined by Dr. Jason Hickel, economic anthropologist, author and Fellow of the Royal Society of Arts. He is the author, most recently, of The Divide: A Brief Guide to Global Inequality and Its Solutions. Dr. Hickel will join us from London in just a moment. Stay with us.
Nima: We are joined now, by and I think I can say this now, friend of the show Jason Hickel. Jason, thank you so much for joining us once again on Citations Needed.
Jason Hickel: Hey, thanks for having me.
Adam: So we spent the intro briefly talking about the origins of the Gross Domestic Product, the GDP, as a kind of central axiom of post World War II capitalism, I want to sort of lay out here, I want you to kind of give a quick explanation of how the GDP became this kind of holy unquestioned most important criteria for economic policy and human well-being by extension, and what the centralizing of the GDP says about the ideological inputs in its creation, and how those inputs inform every facet of global economic policy today.
Jason Hickel: Well, so I think the first thing to understand here is that capitalism itself is intrinsically growthist or expansionary, right? It’s one of the only intrinsically expansionary economic systems in world history. And so that pressure for expansion has always been there, whether or not you’re measuring it. Now, it’s only really in the 1930s that governments fully get on board with this idea of singling out a metric of expansion and beginning to pursue that. So that’s quite a unique shift in the history of capitalism and this starts in the 1930s. During the Great Depression, it was initially a progressive project and that’s important to understand. Simon Kuznets, an economist was drafted in and the idea was to create a metric that would measure all of the economic activity in the economy, so that they could manage to find a way out of the Depression in terms of money supply and wages and so on. But Kuznets was careful to warn from the outset that ideally we should have a metric that emphasizes economic activity that contributes to human well-being and deemphasizes that which does not or which actively causes social harms. But then something happens in the 1940s, World War II strikes, and the game begins to change because suddenly, those concerns that Kuznets had, about let’s only measure what’s useful for well-being, go out the door as governments are scrambling to get a handle on the total amounts of monetary and productive capacity in the economy, to fight the Nazis, basically right? So for the war effort. And it’s that more aggressive version of GDP, that really gets enshrined as the main indicator of economic progress in the wake of the war. So during the Bretton Woods Conference in 1944, GDP is brought in as a main measure of economic health and progress, and is spread around the world from there. And the Cold War actually played a really important role here because you had this kind of epic battle between, you know, the West and the USSR, and GDP and GDP growth rates really came to adjudicate success in this battle in some key ideological respects, like what system can grow GDP the fastest? And so in some ways GDP growth became kind of symbolically important during this time but it also had real material benefits for each regime in the sense of the more they could grow their GDP, the more they could invest in military capacity, and dominate the world, right? So, so that became crucial as well, but then it really gained steam around the rest of the world beginning in the 1980s with the impact of structural adjustment programs around the Global South by the World Bank and the IMF, where governments were made to abandon the focus on social spending and human welfare and economic sovereignty and so on, and focus, you know, instead entirely on pursuing the conditions for GDP growth. And so from the 1980s onward, then our world is kind of locked into this ideological agenda, poor countries and rich countries alike, pursuing growthism. And what’s interesting about this is that it really does have this incredible hegemonic status because both political parties on the left and the right are focused single-mindedly on this objective of increasing the GDP. Of course they bicker about how to distribute the yields of growth but on the question of growth itself, there’s no daylight between them. It’s the one thing that political parties agree on regardless of their ideological side and that’s remarkable that an indicator that effectively measures the welfare of capital and not the welfare of people has come to the a proxy even on the left for human progress, so in some ways, this is like an incredible coup on the part of those who accumulate capital, because ultimately, you know, an indicator that, that measures their well-being has been adopted by the rest of us unthinkingly as an indicator that measures the welfare of all of us, right? So, which is really a coup when you think about it, I mean, that’s, like, ideology in the strict sense.
Adam: Yeah, that’s what’s so fascinating about these three letters is it is such a loaded ideology that is, you know, people have obviously criticized it over the decades, right? But those criticisms have never really bubbled to the surface of any meaningful counter narrative. The ideological inputs go virtually unquestioned in any kind of popular context, you don’t see presidential candidates criticizing it, you don’t see me that really corporate media criticizing, it’s sort of taken for granted.
Jason Hickel: Totally taken for granted, which is amazing. I mean, especially given the piles of evidence we have against it now. I mean, there’s a real scientific consensus building, and this has been around for almost 100 years now. I mean, ever since Kuznets originally launched his first measure of national accounts, you know, he himself was careful to warn in the U.S. Congress itself, that we should never use this as a measure of human progress, or human welfare, or social progress or whatever it might be. I mean, it’s just too dangerous.
Nima: And they’re like, ‘But it really works for us. So we’re going to do that.’
Jason Hickel: And what’s interesting is that even in terms of the historical evidence, there is literally no evidence of an automatic relationship between GDP growth and human welfare in any way that you measure it. You know, what really matters is not GDP itself, but how the yields of growth are distributed and for a fair distribution of the yields of growth, you need progressive political parties and so the real drivers of human progress in history hasn’t been sort of that GDP itself was sort of produced universal healthcare and high life expectancies and vaccines and so on, no, I mean, this comes from social movements demanding access to sanitation in the 1870s, to universal healthcare and education beginning in the early 20th century and those are the real drivers of human progress and welfare, I mean, this is what drives life expectancy up. And so yeah, it’s a profound fallacy that somehow remarkably remains almost entirely unquestioned in the dominant culture. To some extent that’s beginning to change slowly. Since 2009, you know, you have a number of major economists like Stiglitz and Amartya Sen and so on, coming out saying we should probably stop using GDP as a primary measure, let’s think about supplementary measures we can use that are a bit more holistic, et cetera.
Jason Hickel: I mean, but this is kind of like a, it’s like a soft critique really of growth but nonetheless, an important one, and it does give you a sense for, you know, the evidence really is piling up against this indicator now. It really is time that we abandon it.
Nima: Yeah actually, to that point, you mentioned the kind of growing scientific consensus and recently more than 11,000 scientists signed on to a statement saying basically, in part, quote, “We need to shift from pursuing GDP growth and affluence towards sustaining ecosystems, improving human wellbeing, and reducing inequality,” end quote. So, to what extent do you think degrowth is now really starting to form that consensus and if it’s maybe doing that too slowly, what are maybe some of the objections to those who view degrowth as potentially destructive and is that just because growth is so kind of beaten into us already that it seems hard to provide a counter or a challenge to that at this point?
Jason Hickel: Yeah. Well, I think there’s actually two things going on here. One is the critique of GDP and the other is degrowth, and these two things are actually different, although they proceed from some of the same initial concerns. So at this point, there’s a very strong scientific consensus that there is no automatic correlation, causal relationship between GDP and human welfare, especially for rich countries. We know that in rich nations, the relationship between these two breaks off entirely after a relatively low level of GDP. So you have countries like Portugal that have 66 percent less real GDP per capita than the U.S. and yet they have higher life expectancy, higher social indicators across the board, right? And so huge amounts of American output and all the ecological damages and human damage associated with that is effectively wasted from the perspective of human welfare. That’s extraordinary.
Adam: Oh, good. It’s going somewhere, though. I assume it’s going to some guy’s mansion somewhere.
Jason Hickel: Yeah, exactly. Well, this is another crucial issue, like one of the reasons there is no relationship is because so much of what we produce in the economy goes to rich people, where it doesn’t benefit their actual well-being or certainly not social well-being in any meaningful sense, the richest 1 percent of the human population pocket 22 percent of total GDP, which is extraordinary, I mean, almost a quarter of the outputs of the global economy and all of the associated human ecological damage goes into the pockets of millionaires, of the very richest. If you think about it, like somehow we’ve all been persuaded to step on the accelerator of growth at extraordinary ecological costs during the middle of a crisis of ecological and climate breakdown, all to make rich people richer. In some ways it kind of reminds me of what was happening in feudalism if you think about it, right? We know that feudalism was an ecological disaster in a lot of crucial respects and one of the reasons for that was that feudal lords put peasants under pressure to extract much more from the land and from the forests and the pastures than they actually needed for their own subsistence because they had to pay it in tribute to the Lords and we effectively have the same system in place today, where we’re basically plundering the Earth, all to pay tribute to a global elite, way beyond what anybody actually needs in terms of sustenance and human welfare and flourishing itself.
Nima: Yeah, I think one of those things that we hear all the time is, ‘Oh, but if you really raise taxes on the most wealthy, then, you know, you’re stifling innovation and success’ and yada yada yada, but a multibillionaire who loses 99 percent of their wealth will still have more money than they could ever actually spend. You’re not going to amass an armada of 16,000 yachts and somehow there’s a vanishing point of utility to having this kind of wealth, so I think it just speaks to just the amassing of so much wealth that literally is not even being used, not that that would be okay if somehow they were using it, but really this is going nowhere.
Adam: Well, I mean, Egyptian pharaohs used to bury themselves with all the treasure. So who cares?
Jason Hickel: It’s amazing because it’s actually just profoundly irrational and what’s amazing about capitalism is that it sells us this idea that it is rational and efficient at distributing resources and income but the fact is that it’s actually deeply irrational and inefficient when it comes to distributing resources and income and the existing ecological crisis is an example of a profound market failure in that respects. I was doing these calculations recently where I calculated that simply taking a third of the income of the richest 1 percent would be enough to raise everyone in the world, in the Global South, above a high poverty line of $7.40 a day, eradicating poverty forever, and a small fraction in addition to that would be enough to run high-quality, universal public healthcare for everyone in the world and you would still leave the richest 1 percent with more than $130,000 per person, on average in annual income, more than anyone could ever, ever reasonably need. That’s extraordinary when you start thinking about the scale of the excesses they have.
Adam: But of course, their wealth is driven by precarity and poverty so it’s this weird thing where if you raised their standard of living, they wouldn’t need to keep creating their widgets, it’s probably why they want to keep them all poor. The question I have is when we’re confronting climate change, which obviously is the sort of elephant in the room here, climate crisis, as well as of course, the ecological disaster you speak about and you talk about this in your new book, which we will promote later, which is that there’s—the parallels between this and I think the coronavirus pandemic, they’re not obviously one to one, but there are many similar parallels, which is that you see this tension between Wall Street and the Trump regime versus scientists who are like, ‘No, these are just facts,’ and I don’t want to fetishize science too much, but generally speaking, scientists from China, Iran, United States, Europe, Africa, they’ll all say, ‘Yeah, this is like what it is.’ You can’t really negotiate with the virus, it is what it is, right? And obviously, there’s debates about the degree of the severity of climate crisis but obviously, 100 percent of scientists are like, ‘No, this is a thing that exists’ and yet we keep negotiating with this inevitability, similar to the way Trump keeps negotiating with this virus as if saying, we’re going to open up the economy is just going to make it so like as if the virus is ISIS and I guess my question is, to what extent do you see parallels in terms of, you’re saying, ‘Okay, here’s what the science says, here’s just a matter of fact,’ and again, we can debate the nuances but the general end point is that the current rate of growth is just not sustainable. It’s not only not sustainable, it’s going to kill us if we don’t radically change it very soon and this is becoming, I think it’s fair to say, a merging consensus around the climate crisis. To what extent do you think that this kind of soft denialism, this, ‘Oh, well, we can’t afford it or the Green New Deal is too expensive or we have to sort of worry about how it’s going to affect markets,’ to what extent is this just fucking delusional? This is the same thing as Trump saying he’s going to open up the economy on Easter.
Jason Hickel: I mean, it’s amazing. It really shows kind of the power of growthist ideology, I think, and to me, it kind of reminds me of what was happening during like the Copernican Revolution. Okay, so you had these medieval astronomers who for a long time, insisted that the earth is the center of the universe. And because of that assumption, then they have to somehow explain the bizarre things they are observing the sky, which is that the planets move in really strange ways that don’t seem rational, right? And so they have to come up with these outlandish theories to somehow make their prior assumption make any sense at all. And then, once they realize that the sun was the center of the solar system, the Earth was just a planet, then suddenly everything else made a lot more sense, like all of their mathematical problems became just much easier to solve. And I think that’s basically the same issue that we’re facing right now, which is that once we accept that we don’t actually need more growth, that we can build an economy that delivers high levels of human flourishing and improve people’s lives and advance human progress without growth, then it suddenly becomes easier to accomplish all of our ecological goals, right? And there’s now a strong scientific consensus around this. And this is why I draw the analogy with earlier scientific revolutions, because it’s not just the 11,000 scientists that you mentioned before, but also, just one year prior to that there was 300 scientists from across Europe who wrote a letter to the European Commission, pointing out that, you know, Europe no longer needs more growth to deliver human flourishing so they need to pursue post-growth economic policies. Just the other day, there were 170 academics in the Netherlands who submitted a similar kind of letter to the government there calling for post-growth policy, but perhaps most importantly, is the IPCC itself, right? So the UN’s Intergovernmental Panel on Climate Change, the only model they have for keeping us under 1.5 or 2 degrees of global warming, which is the Paris Agreement goal, the only successful model they have for that is that we ultimately reduce material use and energy use in the global economy. Okay, so scale down energy use and material use, which makes it much easier for us to accomplish a rapid transition to renewables. If you don’t do that, the only theoretically possible way to prevent climate collapse is if we have some kind of magical net-negative emissions scheme that so far has no proven feasibility or scalability, right? So if we take those technological fantasies off the table, and these are fantasies that are, that have a lot of currency among growthist policymakers, right?
Jason Hickel: If we reject those fantasies, as scientists increasingly do, and accept the fact that we need to have zero emissions by 2050, then suddenly it becomes very clear, and the IPCC is clear about this, the only way to do that is to scale down energy and resource use and that’s effectively what we mean by degrowth. And this is crucial, degrowth does not mean that we’re aiming to reduce GDP. We reject the fetishism of GDP. And so, you know, in a post growth economy, why would we also want to measure our objectives with GDP? No. I mean, clearly the objective of degrowth is to scale down energy use and material use. Now we accept that that is likely to cause, you know, because if you’re scaling down total industrial activity, this is likely to cause a fall in GDP and so the next step becomes, how do you organize the economy in such a way that that is not a catastrophe? Because, let’s admit it, right now in our existing economy, when you do scale down GDP accidentally, like in a recession, this is utterly catastrophic, right? Debts pile up, firms go bust, people lose their jobs, poverty goes up, et cetera, et cetera. So somehow you have to be able to come up with policies that allow you to deliver human flourishing despite declining industrial activity and the key single most important policy is probably to shorten the working week and redistribute necessary labor. So, you know, so as we scale down, say, the SUV industry, for example, and the advertising industry, and the arms industry and other obviously socially unnecessary and ecologically destructive industries, how do you prevent that from causing a crisis of mass employment? You shorten the working week and redistribute necessary labor, and that should come along with wage increases so you’re effectively shifting income from capital to labor. So you have a fair distribution of existing income, and you deliver productivity gains back to workers in the form of higher wages and more leisure, rather than sending productivity gains to the pockets of capitalists basically. So it’s really not very difficult to do and effectively ecological economists have robust policy proposals for what this would look like. It’s not very difficult, and this would not require some kind of centralized command and control economy, I mean, this is effectively a market society, just as we’re familiar with, but it’s one that’s more efficient and fairer.
Adam: You actually note, I think an interesting part is you say that you think that the climate crisis or the climate activist world sort of made a miscalculation by focusing on fossil fuels rather than growth, because it doesn’t get to the sort of key driver of what creates the need for fossil fuels. I want you to talk about that for a second, I’m sort of fascinated by that line — it makes sense — but I want you to sort of expand on it a little bit, if you don’t mind.
Jason Hickel: Oh, yeah, sure. Yeah. I mean, look, I think one of the problems with the dominant sort of mainstream narrative about climate action is that all we need to do is switch to renewable energies and everything is going to be fine. We can kind of carry on with business as usual in terms of the global economy. But unfortunately, that’s a fantasy in a couple of key respects. And this gets me back to the IPCC models, right? The problem with the underlying logic of our economy is that pursuing GDP growth means increasing energy demand every year, effectively, right? And as you increase energy demands, then it becomes harder to supply that with renewable energy. It’s like you’re making your job much more difficult than it needs to be. So if you think about it, with business as usual growth, we’re going to almost triple the size of the global economy by the middle of the century, in the very same period of time that we’re supposed to be reducing emissions to zero. So somehow we have to not only transition the entire existing global economy to renewables in the next 30 years but we have to do that somehow three times over in the same period of time, in this limited period of time that we have left, I mean, it’s utterly mad, given the stakes of the problem, that is a crazy proposition.
Nima: That’s called a bad potential solution.
Adam: Yeah. Because there’s this weird underlying and you saw this again with coronavirus, and Sarah Lazare wrote about this in In These Times, where there’s this weird kind of, everyone assumes there’s this deus ex machina that will just happen, and that there’s this room somewhere full of experts working on this magical green machine solution and this kind of techno-utopianism, I really do think informs the kind of Davos crowd mentality when it comes to climate change that in the back of their minds, they think, and Thomas Friedman sort of outright says this, who unfortunately has an ungodly amount of influence over these doofuses, that there will be this sort of magical solution that will come along and maintain our standard of living and our growth, but we’re not sure where it is or who’s doing it, but there’s some sort of almost godlike market force that will manifest it.
Jason Hickel: Yes.
Adam: And this is an underlying subtext of a lot of what people talk about. I think one of the reasons why coronavirus caught everyone off guard in the West is that they assumed that there was some floor somewhere in some building where people were working on this and there wasn’t.
Jason Hickel: Yes. I think that’s exactly right. Yeah. And this is the key thing, right? Like, let’s not dismiss the importance of technology and the energy transition. We know that’s important and we know that technological innovation is going to be crucial to this fight but the problem here is that still you’re effectively making your job more difficult that needs to be, right? In order to give our technology a chance to really prove itself, as it were, to really bite, to really be effective, then we need to stop swamping our innovation gains with growth. And that’s what’s happening right now. We’re rapidly expanding renewable energy capacity, and yet emissions are still going up. Why is that? It’s because all of our additional renewable capacity additions are being swamped by net energy demand growth, right? We’re just wiping it all out because we’re pursuing growth. Why would you do that to yourself?
Nima: Well, it’s like Bill Gates keeps giving away millions of dollars and keeps making more money somehow.
Jason Hickel: Yeah, exactly. So that’s one reason that I’m, you know, that I’m worried about kind of the dominant climate narrative. But the other reason is that, you know, we have this assumption that clean energy technology, that clean energy is somehow impact-free and that’s true, because, you know, I mean, in some respects, the sun and the wind are obviously, impact-free, they’re sort of innocent. But the technology that we need to capture that and turn it into usable energy is not impact-free. I mean, this requires an extraordinary amount of material extraction for wind turbines.
Adam: And some coups in South America here and there.
Jason Hickel: Exactly, yeah because the vast majority of these materials are going to come from the Global South, are already coming to Global South, and the more you have to ramp up your demand for this and the more pressure there’s going to be on Global South communities, and here’s the thing is that look, I mean, it’s really progressives that are pushing hard for the energy transition, but in order for this to be consistently progressive in its values, we have to accept that we want the supply chains to be just and ecological and it’s impossible to maintain those conditions of a just and ecological renewable energy supply chain while at the same time insisting that energy growth continue to rise year on year forever, for no particular ends.
Adam: And this leads to my next question, which is that, let’s say, you know, people, whenever you talk about the climate crisis and this sort of distribution of sacrifice, right? There’ll be people in the Global South, even maybe some capitalists in the Global South who say, ‘Okay, a bunch of white liberals in Europe and the United States, they had all this growth and all this ecological disaster that created their wealth, and now they want to pull the ladder up behind them and say, ‘Oh, sorry, guys in India and China, you know, now we have to institute all these sort of harsh ecological austerity.’’ And you write about this a lot that this has to be decolonial, anticolonial, it cannot be pulling up the ladder, say for example, China, right? In 1993 China had, according to the World Bank data, 750 million people living below $1.10 a day and now it has, you know, only a few million, right? For better or for worse, lifted hundreds of millions of people out of poverty. Now that was largely at the expense of some ecological disaster. So what do you say, and you see this a lot with even Venezuela who say, ‘Oh, they don’t diversify the resources. They just have oil energy.’ It’s like, yeah, well, they’re poor, like, what do you want them to do? You know, it’s there’s sort of, there’s this kind of, you can kind of veer into sort of environmental patronizing of the Global South, so how do you calibrate that? What do you say to people who say, you know, now that you’ve had your lunch, you don’t want anyone else to have it?
Jason Hickel: Yeah, no, I mean, no, I think equity and justice have to be absolutely the core of this, right? And so if you look at the way that ecological impact breaks down in terms of per capita consumption of nations, then what you see is that the vast majority, in fact, virtually all of our ecological crisis is being driven by excess consumption in high income nations, right? So there’s actually one indicator we use for this and it’s called material footprint, which basically, it tallies up all of the material stuff that an economy churns through every year. And what we see is that if everyone in the world consumed at the level of the average person in the Global South, then we would have no ecological crisis right now. If everyone consumed at the level of high-income nations, then we would be four times over the safe ecological boundary for material consumption. And, you know, it’s abundantly clear that high-income nations are the principal drivers of this ecological crisis and they’re the ones that the degrowth scientists are calling for, to scale down their material and energy use. Now, lots of poor nations, especially low-income nations, actually, effectively under-consume energy and materials, they have to actually increase their consumption that, you know, they’re going to be permitted effectively to increase their consumption of energy materials to improve human well-being. So it’s got to be a kind of balancing act between growth that is going to be necessary in poor nations and degrowth for high-income nations where additional GDP actually doesn’t contribute to well-being at all. That’s the crucial note you have to strike I think.
Adam: In your mind, what’s the accountability mechanism for that?
Jason Hickel: You know, to the extent that ecological economists have detailed proposals worked out for what a degrowth or post growth economy could look like, you know, that’s easy enough. The political question becomes much more difficult, like how do you organize the accountability process for this kind of thing? And that’s, you know, I don’t really have an answer for that.
Adam: Because a lot of the Green New Deal kind of veers into sort of nationalists, the Green New Deal is sort of a lofty thing but it has no account for decolonization or reparations to the Global South, and so it takes on this kind of weird national socialist flavor, not not to call it Nazism necessarily, but a sort of, I mean, that in a literal sense, a sort of socialism, but a very limited jingoist socialism.
Jason Hickel: No, I think that’s absolutely right. Yeah. So um, there are a few Green New Deal proposals that I think really avoid this nicely. One is the Green New Deal for Europe proposal, which was put together by DiEM25, which is the political party that’s being run by Yanis Varoufakis in Europe, that is an amazing document because it is ecologically coherent, it calls for post growth principles and it is organized around the principle of global justice, so it really considers this kind of this very holistic view of the transition. There’s also an effort underway right now being led by Naomi Klein, and others, and allies, to build a kind of global people’s Green New Deal, which would do something very similar, would take account of the principles of ecological justice and make that really, you know, central to it. I think that this has to be, you know, this has to be central to the way that we consider this transition. Interestingly, this is also at the center of Bernie Sanders’ plan for the Green New Deal and it’s a real pity that that’s no longer really on the table, but hopefully somebody will pick it up. But no, that has to be really, you know, really core to this. And here’s the thing is that in some ways, I regard degrowth in the Global North as fundamentally decolonial in character, because we have to be aware that 50 percent of the total material stuff and energy that the Global North consumes actually comes from the Global South with significant social and ecological costs and so the more you can scale that back, the more you can effectively release Global South communities from the pressure of what is effectively a form of colonization, and has always been for the past 500 years. I mean, the North has always relied on extraction of labor and materials from the South and that’s true today, just as it was in the 16th century. And so some kind of degrowth proposal must also be a kind of effectively decolonial. Now, people will immediately ask, ‘Okay, if Global South economies rely on selling their resources to the Global North, then aren’t you going to make them poor in the process?’ But I think that’s a very strange way to think about it, in fact, it has a kind of colonial mindset embedded itself, which is basically —
Nima: ‘We are so benevolent that we’re allowing them to give us all their things and we just take it.’
Jason Hickel: Yes, effectively, ‘Colonization is good for the colonized, it’s good for the well-being of the colonized, and we should do it more if anything,’ I mean, this is a classic colonial narrative that has been around for the past 500 years. ‘Slavery was good for the enslaved,’ ‘colonialism was good for the colonized,’ et cetera, et cetera. It’s a completely backwards way of thinking about it, and in fact in the immediate post-colonial era in the ‘50s and ‘60s and ‘70s, Global South nations were effectively building their own economies in a kind of self-sufficient sovereign sense as much as possible and that’s what we should be aspiring to. Of course, that project was reversed by decades of structural adjustments in the ‘80s and ‘90s and that’s what we’re left with today, where Global South economies are effectively dependent on being plundered by Western capital, and that’s precisely the kind of arrangement we want to get away from. So the notion that we need to persist in the plunder of Global South communities is totally vile. I think that we have to reject that and be able to imagine the possibility of an economy that does not rely on that kind of extractivism.
Nima: Yeah, I mean, as you’ve noted, this is such a trap, right? I mean, it’s like this colonial trap, where, as you’ve written, quote, “A nation’s bargaining power at the World Trade Organization depends on the size of its GDP,” end quote. So the metrics to determine any sort of inclusion in the world economy to anything that is expected is already set up by the wealthiest nations and so inevitably playing this game is going to further colonization, is going to further this idea of ‘Oh, well, those nations are still developing down there, and we’re just wealthy up here but we have to keep extracting, because then they’re going to have a lower GDP if we don’t.’ So, you know, what do you think are ways that that can be shifted? Are there Global South movements? Are there ways that policymakers and leaders down there, and maybe certainly not even quote-unquote, “leaders,” whatever that means, but, you know, are there people-led movements that are kind of trying to shift this change the way that wealth and health and growth are even thought about? Progress?
Jason Hickel: Yeah, no, there’s, I mean, there definitely are movements, in fact, there’s, I mean, there’s progressive movements across the South that are calling effectively for a fair global economy and have been calling for that for decades now. You know, it’s not just the World Trade Organization but also the World Bank and the IMF where voting power is explicitly linked to effectively GDP, right? So the bigger your economy, the more contributions you can make to the corporations — the World Bank and IMF are corporations — the more voting power you get in those bodies, and these are the bodies that determine global economic policy effectively. And it’s crazy that you have this kind of overt plutocracy at the very heart of global economic governance. It’s a kind of madness. But here’s the point I want to get across is that there’s this very destructive idea out there that global economic growth, global aggregate economic growth is necessary in order to reduce poverty and this is fundamentally not true. What we have to understand is that the Global South contributes the vast majority of the labor and the resources and energy that go into the global economy every year, and yet the poor 60 percent of humanity, receive only five percent of all new income from global growth. So that’s not even a trickle down, that’s like vapor. The first step should be that we need a fair global economy that allows, you know, the people of the Global South to claim a fair share of the yields they produce in the economy, which will, you know, allow you to eradicate poverty very quickly, without the need for any additional growth at all, without the need for aid and charity and so on. I mean, this is fundamentally a matter of, of justice and so it’s crucial that we understand that this kind of global economic justice is a really crucial part of climate policy, ultimately, because if we’re going to shift to a post-growth economy, which we know we need to do to address our climate goals, then we can eradicate poverty at the same time, by distributing income more fairly and that’s got to be really central to our mission here.
Adam: I’d be remiss if I didn’t talk about the sort of allure and kind of what I think is creeping ecofascism, which obviously touches on sort of vaguely similar themes in the same sense that national socialism touches on socialism where it sort of gestures towards something but does it in a deeply sinister and horrible way. There’s even kind of like an ad hoc, sort of hippie Malthusianism that we saw with coronavirus, where when production stopped, there’s all these viral threads about how we’re the virus and nature is fighting back and this is, I think, sort of depressingly popular that when you talk about degrowth, you talk about climate crisis, the response is a sort of misanthropy or a response about something fundamental to human nature versus the system itself. What do you say to that? What do you say to people who are listening who maybe flirt with those themes, or are attracted to the kind of eco fascist response to climate change and what are people in your space and climate crisis activist spaces, what are they doing to kind of push back against that and explain that the problem is not some intrinsic current of humanity, but it’s, in fact a system itself?
Jason Hickel: Yes, yeah. Yeah. No, I think those narratives are really horrible. And I feel so depressed every time I see them circulating online, you know, they’re horrible, but they’re also just absolutely wrong, right? Like, humanity is not the virus. Capital is the virus here. And again, I think that this is actually true in a kind of a very clear sense, which is that capital is programmed to replicate itself, to turn everything it touches into more capital, which is exactly what a virus actually does, right? It colonizes a host and then forces the host to produce more of itself and that’s, I mean, you couldn’t get a better analogy for capital. So it’s not humans that are the problem here, it is, it’s an expansionary economic system that is organized around appropriation and plunder and inequality. Now, there’s a big faction of people out there that, if you ever get up and give a talk about ecological crisis, then immediately someone’s going to put up their hands in the question and answer and say something about ‘Isn’t this ultimately about population, like overpopulation?’ This always comes up and the thing is, of course, population contributes ecological impacts, but that is by far not the important driver here because the vast majority of the people in the world do not contribute meaningfully to ecological breakdown at all. It’s almost exclusively rich countries and specifically the global rich within all of our societies that are the main problem here. If you look at historical emissions, and give everybody in the world a fair share of safe emissions under the planetary boundary of preventing climate change, then what you’ll find is that the vast majority of humans on the planet, across the Global South are still under their safe, fair share. It’s only rich nations that have really contributed to the excess emissions that are now driving climate breakdown. So the idea that this has to do with humans in general is just empirically incorrect. It is about a relatively small class that has appropriated our atmospheric commons and huge amounts of our ecological commons for the sake of elite enrichment and if we’re not pointing that out, then we’ve actually fundamentally missed the point. It is about inequality and processes of colonization and that has to be really central to our analysis.
Nima: What are you working on now and what can we look forward to in the hopefully near future from you?
Jason Hickel: Yes. I’ve been working on a new book, and it’s called Less is More and it’s coming out with Penguin this year. So keep an eye out for that book. It’s kind of a popular and accessible, digestible account of what a post-growth, post-capitalist society would look like. How do you organize an economy that is not growing and do it in a way that delivers high levels of human well-being and human progress at the same time? It’s exciting because it’s possible and to me, this is like, yeah, it’s an exciting moment to paint an alternative future for us. So check that out, keep an eye out and let me know what you think.
Nima: I think “exciting because it’s possible” is going to be my new motto. I love that.
Adam: Yeah, I want to make sure we’re not sowing cynicism here. There are alternative systems that people propose that are very doable. This isn’t pie-in-the-sky stuff. This is basic math so I want to emphasize that to our listeners, we are not telling you to go, to avoid sharp objects, and to go into the basement, there’s hope, there’s alternatives. It’s just a matter of political will.
Nima: Well, that will do it for this amazing conversation. Dr. Jason Hickel, economic anthropologist, author, Fellow of The Royal Society of Arts, senior lecturer at Goldsmiths, University of London, in addition to many, many other amazing accolades, the author of the recent book The Divide: A Brief Guide to Global Inequality and Its Solutions, lookout for Less is More later this year. Jason, thank you again for joining us today on Citations Needed.
Jason Hickel: Yeah. Thanks for having me on.
Nima: Yeah, it’s always great to talk to Jason on the show. He has certainly reached friend-of-the-show status, every time he’s on I feel like my brain starts to expand to the point of exploding and yeah, I don’t know, maybe I’m just not a numbers guy but it is always amazing to talk to him. I think this obsession with GDP that economies have to keep growing, right? If this year is not better than last year, if this quarter is down on last quarter, then everything is being ruined and economies are suffering, that the GDP, Gross Domestic Product, is synonymous with what we call the economy is just this canard that I think, you know, we can’t talk about enough because we assume that the economy or GDP is this thing that needs to always expand, like expand, expand, expand, expand. If it’s not, then everything is getting terrible and there are certain metrics along the way, right? Like, you know, unemployment or wage gaps, things like that but when you just are measuring fucking GDP, there’s no accounting for whether that is spending money on dialysis or on slot machines. There’s literally no context.
Adam: One of the things he points out in his writing quite often is that it’s not as if GDP has no bearing on aggregate well-being, but it’s not a direct, it’s not interchangeable, which is to say the countries with relatively low GDP per capita, like Portugal or Costa Rica, have very high standards of living relative to other countries. Countries like Cuba have a higher life expectancy than the United States. Countries like Portugal have a higher life expectancy. They have higher rates of literacy, more educated, now, you know, there are other things here and there, but there’s not a direct correlation between GDP and well-being at all.
Nima: Right. All it means is spending money. How much money is a country or are a people spending? That is literally what it means, how much money is being spent, but if you don’t have to spend that money on things that are going to keep you healthy, then that’s not going to be included.
Adam: Yeah, because if I paid Sisyphus $500,000 a year to roll a rock up a hill, up and down, that would go into the GDP, right? But it isn’t doing anything. It’s like health insurance companies. They’re entirely parasitic. Health insurance companies don’t do anything. They don’t make anything. They don’t create anything. They don’t save lives. They don’t build a longer-lasting light bulb or a faster train. They are literally just a parasitic industry, but its valuation contributes to our GDP, but it doesn’t do anything, socialized medicine wouldn’t really do that, like I said it would be government expenditures, but it would be, you would take out the insurance, which is basically just a sort of weird shell game, right? And I think that’s kind of the thing I find fascinating. Now one thing we didn’t touch on with the interview with him is that ‘grow or die’ is the ethos of every business school. It’s what they teach you in Business 101 that if you’re not growing, you’re dying, right? You can’t just remain the same and it’s the thing that informs every investment banker, every businessperson, there’s some, I guess, some logic to it, which is to say that your investors always want more and more money, that’s how you get investment in the first place.
Nima: Well, right that it’s like a stockholder ideology.
Adam: Right but the problem is that, you know, that’s bad for companies and that mentality is bad but it’s really, really bad when it comes to countries or societies that you have to consistently keep growing for its own sake, without any understanding of what’s being left behind or what’s being destroyed in the process and I think that, again, you don’t want to sound Captain Planet about this, but there’s a cost to these things, this infinite growth mentality, this kind of sky’s-the-limit, 1990s Thomas Friedman mentality that we can just sort of keep growing and becoming infinitely wealthy has (a) born out to not be true and (b) comes at a tremendous cost, and that bill will, unlike the deficit, which is a fake bill that will come, the bill for climate crisis and the destruction of ecosystems that will come due.
Adam: And that will have to be paid at some point if we don’t pump the brakes on this and so, to me, the most important question is the waterfall of responsibility, which is who begins to sacrifice first and it’s very important, it’s essential that we make it the Global North, and not do what we always do, which is do what we do with budget with deficits and debt discourse where we sort of blame poor people or blame the Global South and say, ‘You need to stop having children or you need to stop consuming.’ It’s super important that any kind of degrowth or transition to a degrowth society is radically and very explicitly decolonial and anticolonial and that’s the thing that scares me the most. It scares me the most that it won’t be, that you’ll get this kind of nationalist, Elizabeth Warren, green military approach that I think can be utterly disastrous.
Nima: It also doesn’t take into account that the economy is not just what people are spending, but rather, what is all around us. I mean, again, the environment, our climate, our planet, and the social systems that bind us together, that allow us to have family and friends support, that allow us to take care of our loved ones, of our parents and our grandparents and our children and grandchildren, these are all part of a real economy and yet, when we hear in our press and our politics of The Economy, it is literally about money exchanging hands, and that money is almost always exchanged from the poor to the already rich and I think that that really is at the heart of what we’ve been talking about today and what Jason was certainly talking about during our discussion about changing that dynamic, changing what the definition of an economy really is, will get us much more solidly on the path against this ‘grow or die’ and much more toward a degrowth mentality where maybe not only can we survive, but there may be just a little more justice.
Before we go, a quick note on our recent news brief about the 10 Worst Covid-19 Takes, I mentioned an oft-repeated stat that “Just 100 companies [are] responsible for 71% of global emissions,” according to the Carbon Majors Report report by the organizations CDP and the Climate Accountability Institute. The stat, albeit widely reported that way in the press, is deceiving in its media shorthand. And thanks to Citations Needed listener Spencer Roberts for keeping us honest on this. This is an official correction. So here’s the deal: The frequently referenced Carbon Majors Report doesn’t actually assess global — meaning all — emissions, but rather only emissions by fossil-fuel producers. Their impact is expectedly massive. These emissions, according to the World Resources Institute, account for roughly 74% of all global greenhouse gas emissions. Other major contributors to the global total are agriculture and forestry industries, for example. So, a more accurate stat would be that, over the past 30 years, “71% of *fossil fuel* emissions are *traceable* to just 100 corporations” and that these account for more than half — 52.7% — of all emissions globally. This is still a devastating and damning stat, but we still think it’s important to make the distinction between fossil-fuel emissions and total global emissions. Those should not be conflated. So, again, thanks to Spencer Roberts, and to other intrepid listeners out there: If you catch us saying something on the show that’s inaccurate or badly framed or poorly articulated, please do let us know. It’s kind of our whole thing and it really is important to us. Okay, there you go. Citations given.
That will do it for this episode of Citations Needed. Cannot thank you all enough for listening, again, at this time stay healthy, stay safe. You can follow us on Twitter @CitationsPod, Facebook Citations Needed, become a supporter of our work through Patreon.com/CitationsNeededPodcast with Nima Shirazi and Adam Johnson if you are able to and an extra special shoutout goes to our critic level supporters on Patreon. I am Nima Shirazi.
Adam: I’m Adam Johnson.
Nima: Citations Needed is produced by Florence Barrau-Adams. Associate producer is Julianne Tveten. Production assistant is Trendel Lightburn. Newsletter by Marco Cartolano. Transcriptions are by Morgan McAslan. The music is by Grandaddy. Thanks again, everyone. Take care of yourselves. We’ll catch you next time.
This episode of Citations Needed was released on Wednesday, April 29, 2020.
Transcription by Morgan McAslan.