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Growth For What: The Shaky Promise Of Green Capitalism

A fighter jet using biofuel
Erwin Scheriau/APA/AFP via Getty Images

Rarely do the two sides of such a well-discussed issue talk so evenly past each other as when it comes to the question of “degrowth.” On the pro-growth side, degrowth is understood as a primitivist injunction to wind down the human civilizational project at the cost of billions of lives. Meanwhile, degrowthers maintain they’re calling attention to the simple existence of ecological limits, as well as the easily confirmed fact that we’re bumping our social head on them right now. In terms of a standard political spectrum, there might be as much variation within these categories as between them, with green-growth socialists and libertarian doomers troubling a clear division. And yet, these rhetorical ships don’t pass in the night, they try to joust in the daytime, too far for either one to land a clean blow. What then is at stake when we argue about degrowth?

If there’s a misunderstanding at the heart of the conflict between growers and slowers, it’s about the concept of value. The former take the metrics underlying GDP for granted, assuming a correlation between output so measured and general wellbeing, while the latter tend to distinguish the genuine usefulness of goods and services from their price, which is caught up in a set of profit-maximizing capitalist social relations and might well have nothing to do with the positive social signal we associate with value. For example, if a wealthy man spends an afternoon picking up trash at the park or playing tiddlywinks with his grandson, he adds not a dime to the GDP; if the same man pays day-laborers to dress up as game animals so he can hunt them for sport, he’s a job creator. Such critiques have haunted the measure since its introduction, but alternatives—such as Gross National Happiness, the Better Life Index, and the Human Development Index—have not attracted legitimacy. The result is a debate about the direction of a number that maybe half the participants even find valid in the first place.

Still, attempts to brand the degrowth argument (more accurately, in my read) as “agrowth” or something similarly agnostic have not taken hold either. As a relatively radical position, degrowth gets more oxygen than it might under a different name, and it’s probably best to understand it as a provocation more than a policy prescription—the three authors of The Future is Degrowth quote descriptions of the idea as both an “umbrella term” and a “missile word.” I haven’t found anyone in the degrowth camp who argues the true maximalist (that is, minimalist) position that we used to call “anti-civ,” and relatively few advocates of old-school Malthusian population control. Rather, they tend to see an empirical link between growth and environmental exhaustion, what ecologically focused Marxists call the “metabolic rift” that opens between endlessly accumulative capitalism and the earth’s cyclical nature. If the two are incompatible, our terrestrial species can only jettison the first. Degrowth declares from the outset a willingness to let capitalism die so that humans might share and meet our crisis responsibilities as a species rather than as an antagonistic tangle of classes.

For those with a fundamentalist faith in the price system, however, climate change presents a crisis and an opportunity. Like a prince gone to rescue his princess, capitalism faces a defining challenge: if the market system can handle a global, existential threat such as we’re embroiled in, it confirms its place once and for all as the valuer of values, the end of line, the deserved winner of the 20th century’s ideological pageant. “Innovation and economic growth are, in fact, inextricable,” writes economist Alessio Terzi in his new book, Growth for Good: Reshaping Capitalism to Save Humanity from Climate Catastrophe. For Terzi and the green growers, not only is capitalism our answer, it’s the only answer capable of producing the negative carbon emissions necessary to maintain earth’s habitability. Though the system hasn’t demonstrated the ability to do that and the posited necessary technology is deeply speculative, capitalism is the innovative system because there are strong incentives channeling that inventiveness toward solutions. “Degrowth,” on the other hand, Terzi writes, “would tear down the entire system and require a complete restructuring of society.” He means that in a bad way.

With so much observed and theorized about the topic, there’s no claim that either side makes that doesn’t have a refutation from the other. If Terzi claims capitalists are compelled to invest in climate adaptation and carbon sequestration, Adrienne Buller reminds us in The Value of a Whale: On the Illusions of Green Capitalism that, with financialization, investment meaning market exposure to a phenomenon is increasingly detached from investment in the sense of the provision of capital for a useful project. Venture capitalists gambling on the “Goddess Nature Token” are investing in the way that they’re compelled to by the impersonal trammels of growth, but not the way we might want them to as stewards of our collective resources. An open-minded reader can swim back and forth between the de/growth arguments indefinitely without finding a solid place to stand, much like a drowning polar bear. 

Terzi’s account is particularly useful because he refuses a conceptual alliance with pro-growth ecosocialists, opposing what has been called the “Climate Mao” or “War Communism” strategy as hopelessly inefficient and a possible Modern Monetary Theory plan to crowd out capricious private spending with new democratically controlled state dollars as economically illiterate. Terzi agrees with the left wing of degrowers that capitalism requires growth to exist, and that’s the kind of admission that gets the argumentative lances closer to striking distance. He lays down a green capitalist pro-growth line that doesn’t shrink from the capitalist part, that doesn’t concede any need for a fundamental restructuring of society, and in fact rules out such a transformation. Against this background, the image of degrowth sharpens.

Competition is a cornerstone of Terzi’s account, it’s the mechanism that connects growth and prices: Capitalists compete to capture growth, chasing production efficiencies and racing to meet unmet consumer demand. The result is a decentralized price system that’s uniquely able to produce and distribute goods and services in a rational way. If you take out growth, you sabotage competition and wreck our ability to price stuff, leaving society without a way to arrange production and distribution. Of course capitalism can endure recessional years of actually existing degrowth, he writes, but the incentive has to be there. Remove that and the whole thing comes down. Here he cites not Fred Hayek but Karl Marx and Rosa Luxembourg, who also understood competition and growth as fundamental to capitalism.

Instead of trying to score the de/growth debate in its particulars—impossible to do at all in this kind of essay, never mind well—I will spend this final third in the slash, on a problem with the division between growth and degrowth. Vladimir Lenin also believed competition for growth was the basis for the capitalist system, but, working in a dialectical tradition, he understood that system as self-destructive. Decades after his death, Lenin was credited with saying that when the communists are ready to hang the capitalists, the capitalists will bid against each other for the rope contract. Or, as it’s sometimes phrased: “The last capitalist we hang will be the one who sells us the rope.” The microeconomic incentive to growth for individual players need not translate into macroeconomic growth for the capitalist class. If they’re willing to grow the world to death because the markets goofed on weighing the pollution variables, then why wouldn’t a green capitalist or two be happy to sneak up behind the fossil fuel industry and slit its throat if there were something in it for them? After all, that’s what the oil industry has done to their competitors for a century.

There are some good reasons to expect economic contractions during any kind of green energy transition. Fossil fuels play a huge role in production and circulation, and cracking down on their use in a way that even the green capitalists concede is required will extinguish whole sectors. Solar microgrids are an innovation, but they’re also a direct threat to existing electricity providers, leaving their overall effects on GDP ambiguous. Many of our leading 21st-century capitalists have gotten rich thanks to strategies Terzi views as unsporting if not abominable, like marketing and monopoly. Popping their knavish Zuckerbubbles might hit national balance sheets hard, though that would still be a symptom of capital becoming more socially useful. Abolishing the weapons industry would be devastating for American exports, but it would be great for humanity, and not just in terms of carbon.

If government spending jumpstarts green industry—as Terzi concedes it will probably have to, considering the petro-capitalist lock-in—then this new ropeseller bloc seems likely to back radical pro-climate politicians who will support redistributive economic policies to soften the blow of transition, similar to the way the fossil fuel industry has propped up the American right. This is the kind of competition Terzi is counting on, and if he’s right about that then it’s reasonable to hope history is more cunning than the economist is, that the incentive to grow might do its part to undermine the growth system as we search for a new way to value values.

I’m not convinced Terzi is right. I don’t think capitalism is very competitive in the way that he and the orthodox textbooks imagine it is, partly because I’ve heard Shell economists explain how they’re hedging their position by buying green tech startups while continuing oil and gas exploration. Regardless, his perspective is helpful. If a growth fundamentalist like Terzi can countenance recession in the name of growth, then perhaps degrowthers can find a friend or two on the other side—ropesellers who are principled, shortsighted, iconoclastic, or simply opportunistic enough to invest in the destruction of their own system. That’s growth even I could believe in.