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‘Degrowth’ is Cool Because We Cannot Drink GDP Or Eat Money!
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By Brototi Roy:
It’s that time of the year again. The annual Rail Budget is already out, and the Union Budget of the new government is just hours away from being presented by Arun Jaitley. The common man is geared up to talk figures and percentages, of deficits and inflations; all set to listen and comment about the growth of the world economy, the national gross income, the growth percentages per sector in India, and the changes that the budget will bring. I remember, as a little child every year on the day the budget was presented, I would come back from school and every television in the block would be tuned in on the same channel. I remember my dad calling home during lunch hours to ask about the highlights (this was the era before smart phones), and I remember the lengthy debates on the growth targets and prospects of the new financial year over dinner with family and friends. And I don’t think I would be much out of track to say that the situation is more or less the same in most Indian homes.
We start valuing GDP and the economy’s growth long before we have any formal knowledge about what GDP actually stands for, what it consists of or what its limitations are. And believe me, GDP has a lot of limitations, which any first year undergraduate economics student in India could elaborate on. But, it has been so ingrained into us that we are unable to even consider that growth in GDP is not the ultimate answer to all our economy’s problems. Sure, we applaud Bhutan for developing the happiness index, but we still claim that a “double digit” growth by the Modi government will solve all our problems.
Hence, it was very refreshing for me to attend a conference last September that spoke of the new, but rapidly spreading concept of “degrowth”. The Degrowth Movement, started as a social movement in France in 2001, and accepted as an academic research area in 2008, has been gaining impetus over the years. It was very inspirational to realize that many stalwarts of our society, from academia, civil society, the corporate world and media, are questioning the relevance of the power given to GDP.
However, it is essential to note that “degrowth” doesn’t imply “negative GDP”. Degrowth can be defined as reduction in the production and consumption processes to increase human well-being and reduce environmental and ecological degradation.
According to Dr. Vandana Shiva, an eminent environmental activist and recipient of the prestigious Sydney Peace Prize in 2010, GDP is a narrow concept which excludes the services of homemakers, and subsistence farmers, and does not take into account externalities.
Dr Jayati Ghosh, a renowned economist from JNU, stated that we must look for a new indicator that captures the policy maker’s attention, as an alternative to GDP, whose consumption and work patterns do not disrupt ecological systems. Ashish Kothari, founder of Kalpavriksh, discussed the concept of “radical ecological democracy”, which is a grassroots concept of local self-governance in villages, taking decisions based on social justice and equity.
As I heard more and more speakers put up alternative perspectives, I realized GDP growth is one of those terms that we all talk about, but don’t really seem to grasp the concept. In today’s world, where climate change cannot be disputed any longer and global warming is causing such natural disasters all over the world, do we really need to hunger for “double-digit” growth without looking at the consequences it will have on the environment and the ecology? Shouldn’t we instead be looking for alternatives that increase the well being of the society and result in holistic development of the citizens without compromising the planet? I live in the world’s most polluted city, which is also the heart of the world’s largest democracy, and I wonder why can’t we shift our focus to a more sustainable way of progress; what is the growth for anyway?
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Aditya Singh
This post feels good. How touchy. Except that there is no need to club GDP along with Growth and pit it against Environment as mutually exclusive. Thats why a lot of us are all chips in for clean energy. We don’t want emissions. But there is no need on your part to demonize growth and GDP and business and industry and glorify poverty.
Figures and percentages and deficits and inflations and massive excel sheets and charts and graphs and statistics and large mathematical equations and servers and computer programs say that crime rates in the world and environment is negatively correlated with the average income of the citizens. Unfortunately.
By the way, i would be glad if you could see this video – https://www.youtube.com/watch?v=FAA_So0d01w
😉
Prashant Kaushik
you might get a job with an NGO or at JNU or with some Left Party in Bengal, but the rest of we Indians, roughly 40-60 crores, have only one way to feed our self and that is by earning money via a private job or by doing some business. Most of us have neither rich parental property, nor easy sit-back Government jobs, nor estate farmlands.
If we dont have jobs, means we wont get much to eat.
So while your utopian theory and France inspired movements might preach something else, but in practical realms, we do eat and drink GDP because every single percent rise in GDP means millions of new jobs being created.
A high GDP means more jobs, stronger Rupee, easy loans, less inflation, low prices, more funds for Welfare schemes, cheaper petrol.
Its a win-win situation for all. Yes some might win more and some might win less, but this is still a lot better than an attitude of ‘Lets all stay hungry and poor together’.
Brototi Roy
Mr Prashant Kaushik and Mr Aditya Singh, if you had read the article, you would have realized that I am not glorifying “poverty” and that Degrowth does not stand for a reduction in growth. It actually stands for a new way of looking at prosperity and well-being that doesn’t rely on the virtual figures because if you look at GDP closely, you would realize that an increase in GDP doesn’t necessarily mean that the ‘economy’ is prospering. Relief funds for natural disasters improves GDP just as much as opening up of a new school or hospital does. Degrowth talks of a society where people are self reliant and although the term was coined in France, in its core it is basically the Gandhian philosophy of self sufficiency.
gk
Nice article. Economic prosperity has nothing to with GDP. The West has invented such tools to mislead developing and under-developed nations. Trickle down economics is not going to solve problems for India.
The real intention behind the insistence on these numbers is to use them to corner nations and force them to ‘reform’ for West’s profit. The western economic model relies on appropriation of resources and exploitation of resource scarcity. This is sustained by consumerist culture where the educated individual knows little about economics and does not question the status quo as his basic amenities are fulfilled by the heavy taxing welfare state.
The real issue is not growth but the perversion of what growth and prosperity means. The centralized fiat currency system is the problem. It delegitimizes, demotes other forms of capital. Hence it favours those who already possess wealth, those lucky to be in front of the queue, those who have access to power/information. The have-nots have to borrow from the ‘haves’ in-order to ‘develop’ their condition and catch up with the ‘haves’. As all trade is reduced to a bidding war, the one with more money will grab all resources and the loser have to rely on the ‘investments’ and ‘spending patterns’ of the winners for making their livlihood.
Brototi Roy
Thank you for your comment. I am glad atleast someone could understand the issue here. Although an increase in GDP is instantly associated with a rise in growth of employment opportunities, reduction in poverty etc, that isn’t really the full picture. Construction of a new firm’s contribution to the GDP is equivalent to the money spent on clearing a forest, or cleaning an oil spill. And at the crux of it, Degrowth is not about reducing growth, but looking at a new way of defining prosperity and well-being.