How an Economy Without Growth Might Work
Tim Jackson presented his work on post-growth economics at our second Symposium.
PUBLISHED2. SEPTEMBER 2022
READING TIME4 MIN
At the outset, Tim Jackson argued that, aside from the question of whether slower growth is desirable, we are in fact heading towards a post-growth world. According to Jackson, empirical evidence suggests that the economy is already slowing down, with far-reaching consequences for goods, financial and labour markets. If the falling trend in labour productivity continues, going back to the post-war Keynesian consensus (growth plus redistribution) is not an option.
Still, the idea of developing a post-growth macroeconomics appears almost marginal within the economics profession. This is why Jackson argues that thinking about growth must start with a rethinking in economics. Instead of taking growth-dependency as a given, economists ought to find solutions on how to overcome this challenge by systematically studying how growth dependency is related to economic and political power, financial markets and social norms. Only then can policies be crafted to address the long-term implications of already declining growth, in particular rising inequality. In addition, Jackson argued that under certain conditions credit growth would be possible even in a stable economy.
He elaborated on ways of how to lay the foundations for economic well-being in a post-growth economy using the labour market as an example. Here, one solution could be to simultaneously decarbonize utilities and invest more in labor-intensive areas. One prime example of a low-carbon, labor-intensive area is the healthcare and social care economy, which will see ever more rising demand due to demographics. Reversing the trend towards financialization and rent-seeking in the health and social care sector propagated to the benefits of shareholders would result in less inequality.
Jonathan Barth (ZOE Institute) agreed that economists still tend to shy away from the nitty-gritty of redesigning economic analysis and reconsidering its assumptions. In his view, a post-growth world implies that we need a new means to provide the critical material basis of societal wellbeing. In doing so, we should take a closer look at taxing to only flows but also stocks. Katharina Beck (Financial Policy Spokeswoman Bündnis 90/ Die Grünen) mentioned that the new wellbeing indicators in the annual economic report point towards a new post-growth paradigm in politics. She also underlined that differentiation in the growth-debate is key as certain areas of the economy will need to grow even in a post-growth economy.