Normally I’m the type to skip straight past the finance section in the news, eyes glazed over. But in the second half of 2022, as whispers of economic crisis and global recession got louder, I figured I should try to get my head around what was happening in the world of economic markets and reserve banks.
This article is not the place to get a detailed analysis, but it seems the issue is a “supply crisis” where not enough stuff is being made (“supply”) to meet the consumer demand. This is due to a mix of factors including: covid enforced factory shutdowns that slow down production of all kinds of objects, natural disasters affecting food harvests, sanctions against Russia affecting oil and wheat markets. With few options at hand, governments through reserve banks are raising interest rates to stop the flow of credit into the economy and therefore restrict people’s spending (“demand”) power. The combination of the two seems likely to stop economic growth around the planet, bringing about a “global recession” – which will have further flow-on effects to the economy if companies lose profits, lay off workers, who then have less money to put into the economy, etc. Of course, the losses will ultimately be most felt by those who had the least to begin with, who also had the least power to control how any of this happened.
I don’t know enough nor do I have the desire to write an analysis of our economic situation and government responses. But what I do want to point out is that if we take a step back, we can see that the “supply crisis” is hardly an overnight development.
Look at the causes I just mentioned. Natural disasters? We have known for a long time that the resource extraction demanded by our ever-growing economy is likely to lead to increased natural disasters, but we had neither the desire nor the ability to stop. The wave of disasters we have seen in recent years (and the costs) seems likely to continue, and to plan for the future not accounting for this seems extremely foolish. Our food system, meanwhile, is hardly sustainable anyway – prices are kept low by environmentally unsustainable farming practices, but at the same time vast amounts of perfectly edible food is wasted at each step of the supply chain. It is quite likely we will have continuing issues regarding food production.
What about energy prices? Well for one our energy use is driving us towards environmental crisis no matter what the price. Our extraction and distribution of these valuable resources is also driven by the greed of a few unscrupulous companies rather than a proper analysis of human need. Then there’s the Russia situation. The fact that our own lives have been affected by sanctions placed on Russia’s war-mongering government leaves us with the unpleasant but unavoidable conclusion that it is our global demand for fossil fuels that has in fact financed Russia’s invasion of Ukraine and the extreme imbalance of power that has developed in that country. You can extend that analysis to Iran, Qatar and Saudi Arabia – all oil exporting countries who have been in the news for human rights abuses in 2022.
Then there’s the manufacturing issues. The situation we are in, where global manufacturing is concentrated in a few countries, didn’t happen by accident – it was a deliberate move by companies to move operations to where it was cheapest by avoiding environmental and human rights legislation. When the cramped and unsafe environments created for maximum efficiency turn out to be perfect for spreading disease and their closure affects the world; it’s not an unfortunate accident – it’s the direct result of decisions made by those companies.
I could list other examples, but my point is that if we look at the situation holistically we see that our “supply crisis” has been going on for a long time and will continue to for the foreseeable future – we just happen to be at a point in the turning of the wheel where we Western humans are the ones on the receiving end of an ever-destructive system.
We will probably continue for a while to hear about various responses to our current situation, but there is one possibility you are unlikely to see mentioned by any mainstream voices. That is the idea of “degrowth” – that maybe the real problem is not our economy contracting, but our economy growing.
You won’t hear it because in our religion of economic growth, degrowth is the ultimate blasphemy. Economic growth is our only metric to measure the progress of humanity, the governance of nations, whether a job is a worthwhile use of our time, the value of objects, whether we are useful and successful individuals.
But economic growth is hardly a universal good. It in fact is permanently running a race against our use of our planet’s finite resources. It continues to drive increasing greenhouse gas emissions, even as the world has come to see the necessity of decreasing these for the sake of our climate. It has relied on and perpetuated an exploitative and unjust global political situation. It has removed the human scale from our economy (a word once derived from the Greek term for “household”) – taken basic needs like food and housing and turned them into scarce commodities by the invisible magic of financial markets. It has developed technologies that crush the possibility of artisanal work, but then forced us to slave our lives away in esoteric and obscure jobs that we’re never sure are contributing anything meaningful to the world. At times it actually takes rational individuals and lures them into its own insanity – people investing their money in crypto-currency and Non-Fungible Tokens in full knowledge that these things have no real-world value.
In contrast to this, degrowth is a philosophy that has the possibility to intervene in our perpetual financial crisis and to liberate us from the madness of insatiable economic growth. But in a world thoroughly indoctrinated in the religion of economic growth, it is not one we are likely to hear from political parties or corporate media. Imagine the popularity of a politician promising us all less money and less fancy new gadgets. The voices proposing degrowth are left on the fringes, written off as crazy while inwardly cursing the fact that our coercive system forces our complicity if we want to survive.
But degrowth is still possible – at a societal level and at the very least on an individual level. We can work less hours, buy less stuff, share more, refuse to be a passenger on the kamikaze flight of economic growth. Then we can personally enjoy some of the advantages that come from living in pursuit of real life needs and joys rather than abstracted monetary growth. The less time we spend in service to the mighty dollar, the more time we have for the things we really care about – raising good families, working on the causes we most believe in, following our passions and curiosities. By figuring out what we really need; and how we can build resourceful networks and communities to support each other; we can free our lives from the worst dictates of economic growth and be a witness to the rest of society that another way is not only possible, but beneficial.
At the very least, those of us living for degrowth have little to fear from the fallout of a global recession. It is a life spent building a different kind of wealth, one that can not be suddenly crushed by the irrational and indifferent hidden hand of financial markets.
Degrowth is quite possibly going to be the ultimate destination for a system built on an uneasy foundation of environmental and human exploitation. If that happens, we as a society will have to choose between the destruction of financial crashes or a situation where the losses are equitably distributed and where it is humans, not the abstracted “economy”, that we act to protect. In a world of permanent financial crisis, voluntary degrowth may help us to find a way out