Degrowth, steady state economics and the circular economy

Missing Points in the Development Dialogue

Degrowth, steady state economics and the circular economy: three distinct yet increasingly converging alternative discourses to economic growth for achieving environmental sustainability and social equity

Criticisms of the neoclassical economic framework and perpetual growth in GDP terms are not a new phenomenon, although recent years have seen increasing interest in alternative and ecological discourses including degrowth, steady state and circular economics. Although these may initially appear as distinctly different discourses, they are highly compatible and comparable, sharing similar, often nearly identical principles and policy proposals. A more collaborative, joined-up approach aimed at integrating alternative discourses is required in order to build a coherent, credible, well-supported alternative, as there is more uniting than dividing these critical voices, particularly in the face of mainstream political and economic debates that are shaped by neoclassical economics.

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Commentary

  • Ernest Garcia says: October 5, 2012 at 10:51 am

    Following Peter Söderbaum’s suggestion of becoming commentators of other participants, here are some remarks on your paper, which has a lot of inciting insights. This comment is about the idea that it would be possible to reconcile sustainable growth, zero-growth and degrowth:
    – In a purely theoretical level, this conciliation doesn’t seem easy, but it could be conceived.
    – On the other hand, from a sociological point of view it is rather implausible.

    The theoretical synthesis can be formulated more or less this way: Overshoot imposes a period of controlled degrowth (decreasing stock and throughput) until a sustainable level is reached. Then, this sustainable level must be maintained as a near constant, homeostatic, steady-state stock of population and capital. Improvements in resource efficiency (by means of circularity, biomimesis or whatever) allow then for more service obtained from a constant or decreasing throughput. So: degrowth ends in steady-state; and steady-state allows development (growing service or economic value) by means of resource efficiency.

    The sociological scepticism doubts of controlling degrowth and stopping it at an optimum sustainable level as feasible political targets. And it considers highly implausible that a steady-state society could experience a lasting dynamics of quick development and ininterrumpted improvement. For good reasons, a steady-state society tends to be also a slow society.

    [As the conference runs online, comments can be enlarged beyond the prudent limits of an oral question, but the essential of my point has been already stated; so you can ignore the perhaps redundant and excessive explanation that follows. Apologies if it implies inordinate excess].

    The degrowth notion is drawn from the perception that the planet’s carrying capacity has either been reached or that we are so close that overshooting it is no longer avoidable. Thus, the inevitable establishment of a new balance at a sustainable scale will take place through a more or less prolonged phase of demographic and economic decline. Degrowth is a necessary perspective once demographic and economic expansion have been pushed to unsustainable limits. Alternatively, even if the limits were not yet overshot or if the overshooting point could be temporarily postponed by means of technological innovations or political changes, a planned and conscious degrowth would be desirable, for it would minimise the costs of the transition: the only alternative possible to an organised voluntary degrowth, one that would occur in the near future and would have lower costs, is a chaotic degrowth imposed by nature, further away in time but with tremendously huge costs.

    The idea of a steady state was reintroduced in the first half of the 1970s. Herman Daly described the steady state as a three-dimensional economy: stock of people and artefacts, throughput of energy and matter which maintains the stock, and service or immaterial flow of wellbeing. Each dimension is aligned with an “economic policy criterion”: the stock has to be kept constant at a sufficient level; the throughput must be minimised; the service has to be maximised. Years later, in the 1990s, Daly introduced the set of concepts and rules that had underpinned the steady state under a different, more ‘fashionable’ heading: sustainable development. According to this shift, steady state is the only feasible and consistent form of sustainable development.

    This shift moves along two lines. One is built from a conceptual distinction –which as far as I know comes from Boulding- according to which growth is when a thing becomes bigger and development when a thing gets better. This differentiation allows us to describe improvement as development (obtaining more service) without increasing the physical scale (without growth); and this was precisely the logic of the 1970s steady state. The other one is derived from an apparently unproblematic assumption: since the service is an immaterial flow, it can be increased indefinitely, without any top limits. And the service notion in the economy of the steady state is not too far from that of economic value in the most conventional theories: it is true that its semantic field is broad and vague, half way between a generic idea of life enjoyment and a notion of wellbeing or, simply, of utility; but, whichever the case, through this point, steady state and development come together in harmony (at least in theoretical harmony). The efficient use of natural resources, i.e. eco-efficiency, would make possible an indefinite increasing of service; in other words, the growth of the economic value; or, in other words, an indefinite continuation of “economic growth” without an increase in the physical scale; or, still in other words, more development without a radical reconstruction of the meaning of this term.

    The question then is that approaching steady-state to sustainable development implies putting farther away steady-state and degrowth. Let us remember a thesis which has appeared in recent debates in Barcelona (II International Conference on Economic Degrowth for Ecological Sustainability and Social Equity 2010): degrowth is the transition to a sustainable steady state. Then, if the steady state is interpreted -as argued by Daly- as sustainable development, we would come to the following presumably equivalent conclusion: “de-growth is the transition to sustainable development”. An ironic confusion after years of controversy! An in-depth and detailed discussion about the historic conflicts and disagreements between the two concepts is in order.

    From the viewpoint of intellectual history, the comparison can at least be tracked down to the criticism raised by Georgescu-Roegen (1977) on the steady state concept. This critique was based on the assertion that the inevitable entropic degradation of materials (the irrevocable dissipation caused by the use) made complete recycling impossible and, accordingly, also rendered impossible the indefinite extension of a steady state economy driven by renewable energy sources. And so, in the end, the steady state would also be unsustainable.

    Although Georgescu-Roegen’s criticism undermines to a certain extent the theoretical strength of the steady-state concept, its impact was rather limited. Surely because of the unclear scientific statute of the so-called “fourth law” (which, apparently, we would say, is a bad physical law but a good economic one, with all the endlessly conflictive implications that scientist dualisms of this nature entail). And also because the practical scope of this line of criticism is rather limited: the supporters of the steady-state can always readjust their models in terms of quasi-sustainability, arguing that while an indefinite extension remains impossible, the deadlines can be long enough in historical terms.

    Without denying the importance of discussions about the entropy of materials, I think that the degrowth/steady-state duality should also be explored along other lines in order to clarify, as much as possible, to what an extent both ideas are (or are not) compatible. These are some of those lines:

    a) It is possible that the differences between underlying philosophical principles may have significant implications. For example, an assertion such as “nothing can grow indefinitely in a finite environment” (nothing grows forever) is at the basis of many of the arguments that advocate the need for zero growth, in particular of the reasoning behind the steady state. However, the general principle associated with concerns about the social effects of the law of entropy would be this other one: “nothing lasts forever”. It is not particularly surprising that the discourse inspired by the second of these philosophies often have a more pessimistic and melancholic tone than those constructed from the first one. The sensitivity to the effects of exponential growth processes heightens the perception of the limits to the increase in scale. Thinking about the social consequences of the law of entropy causes us to perceive limits not only to the scale but also to the duration (Maybe, at this point, Daly followed Boulding’s footsteps rather than Georgescu-Roegen’s, his other master, and that carefully following this track might bring light to some aspects of an intellectual disagreement that is still dragging on).

    b) In a way, the thesis that a degrowth process should lead to a socioeconomic situation more or less close to a steady state is trivial. All pre-industrial societies have been steady-state societies, roughly speaking: societies in which the physical scale has changed fairly slowly, both as regards the population and the stocks of artefacts, in which magnitudes have been oscillating rather than constantly rising, etc. But they are also societies in which technological, structural, cultural and even political changes have been relatively infrequent. Therefore, the thesis that the characteristic acceleration of industrial capitalism is linked to economic growth might be plausible. And that degrowth, consequently, must also entail deceleration. The old objection according to which the steady-state is likely to be rather boring lies on sound foundations. (Of course, the objection is old, but not final. Comforting boredom may indeed be desirable, should it be possible). Basically, the point I want to make now is that the idea of a steady state seems to be associated with structural, institutional and cultural features which could hardly be described as “development”: the suggestion according to which the steady state could be a state of rapid and continuous improvement without increasing physical magnitudes seems too abstract and, ultimately, lacks credibility from a historical and sociological point of view. What is slow develops slowly. Improvements in life by way of eco-efficiency are possible (and desirable), but it does not seem reasonable to expect them to be ultrafast, let alone inexhaustible.

    c) It would be interesting to explore the relationship between growth and institutions, the question of what restrictions and conditions would be imposed by the stability of the physical scale upon social and cultural dynamics and organisational forms. Some analogies can be found in biology, for example in the ideas of D’Arcy W. Thompson about the relationship between growth and form. However, it is more urgent and possibly more productive to delve into the non-linear dynamics of development in institutions (for instance, the effects of counter-productivity underlined by Ivan Illich), and to give a boost to the old concerns about the optimum scale of cities and other structures of social life –a classic subject but one that has almost been dropped from modern social sciences. In trying to give contents to the proposals for controlled de-growth and a more or less stable situation, these issues –understandably marginalised in an era of rapid change impelled by markets and political adaptations implemented as we go along– become central again.

    In conclusion: Degrowth, steady-state and even sustainable development can go together in many practical fields, sharing some policies and sharing many criticisms to the mainstream views. I agree to the convenience of exploring and reinforcing these lines of conciliation. However, giving solid grounds to these practices, reinforcing them, demands been most cautious in proclaiming their intellectual reconciliation. There are too many unanswered questions, too many unresolved issues, too much friction and too much distance between abstract formulas and sociological concretions… Little can be said beyond the assertion that upheaval in an era of very intense growth and subsequent de-growth will come to an end with a relatively stable historical phase. And the lines of differentiation, from the metaphysical postulates previous to the models to the options relative to technological change and specific organisational forms, are numerous and potentially important.

    Ernest Garcia

 

 

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