The Growth Debate: How the Economy Can Change

Status: 02/03/2022 07:16 a.m.

Can the economy develop further? If so: is it sustainable? Due to climate change, these questions are being asked more and more. There are very different approaches to the economy of the future.

As early as 50 years ago, a group of researchers published a report for the Club of Rome entitled “Limits to Growth”. In it, they described that the economic system would collapse if humanity continued as before. The use of fossil resources and the associated CO2 emissions would cause climate change. To stop this from happening, there must be changes in the economy. It is also about the foundations: because whether the economy can grow indefinitely or not – there are different opinions on this subject.

Post-growth economy: An economy without growth

Economist Niko Paech is convinced: not only can we move to an economic system without growth, but we must. He is a supporter of a post-growth economy. The basic requirement would be that people are willing to own less. If it worked, it might look like this: A 40-hour week would be over, 20 hours of work would be enough. People have to cleanse their lives of things they don’t need.

Since everyone would have to work less, everyone would have more time to do or repair themselves. Everything that is needed then should not be bought by one person and then owned, but shared among many people. All in all, according to Paech, this leads to a better quality of life. So much for the principles of the idea. Sounds too good to be true? For a scientist, this change has long started.

Practical examples on a small scale

An example of a small-scale post-growth economy is solidarity farming, for short: Solawis. The Solawi Vorderpfalz in Schifferstadt is one of many today. There, two families run a farm and grow vegetables and grains in a sustainable way. A regular group of customers pays Soławi money for a year and also takes risks – such as a failed harvest. The group helps farm operators to grow and in return receives a crate of vegetables every week.

In this way, Solawi can grow sustainably and also benefit from varieties that are not necessarily commercially available. In addition, consumer and producer groups are growing together and economic growth is no longer the focus. Others also belong to this growth-free economy, such as repair shops or loan services.

Prosperity of time instead of material prosperity

According to Paech, more and more people are joining this alternative lifestyle. It must be clear that all of this is only possible if people are willing to have less: “Converting an economy to a post-growth economy requires that people with less material wealth, with less real purchasing power, be somehow able to fight for a living. “Paech believes that it is possible if there is a rethink. Instead of material wealth, people could get rich by having more time. Paech calls it the prosperity of time.

For him, the question no longer arises whether people want to live in a non-growth economy or not. “We have no way of continuing with the current development model in the north. Resources are scarce and the absorption capacity of the ecosphere is insufficient. A related economy of growth also cannot be stabilized, ”says Paech. “By design or by catastrophe, sooner or later we will experience a more frugal and no longer thriving economy.”

Economic growth as a matter of justice

Many economists do not accept this idea of ​​an economy without growth. Estelle Herlyn also has no future in this. He heads the “Competence Center for Sustainable Development” at the FOM Hochschule für Oekonomie & Management in Düsseldorf. It also wants to shape a sustainable economy. But it is clear to Herlyn that economic growth is the only way to supply a growing world population: “It means that for this reason alone, what is produced worldwide in the form of commodities, food, and so on must eventually be increased again. Because growth is a world imperative. “

Moreover, according to Herlyn, poverty and differences between countries can only be compensated for by growth. Even Germany as a single country cannot simply decide that it does not want to develop anymore. Most countries in the world want to develop. Exiting this competition as a single country would mean: “It would quickly lead to serious economic losses. You will lose your market share, you will no longer be an innovative system. This is the difficulty. After all, you are doomed to thrive right now in this competitive environment. “If so, the world would have to decide together that it no longer wants to grow economically. But it is far from there, explains Herlyn.

Sustainable development of companies

According to Herlyn, what is really needed is global political authority that provides incentives, for example through the global price of CO2. The enormous flow of money from the Global North to the Global South would also be important for financing climate protection and development. But this is not to be expected.

Therefore, it counts on non-state entities and the companies themselves that are already involved, want to finance climate protection or compensate for their CO2 emissions. “You can think of it much further, well beyond compensation,” says Herlyn. “In the future, we have to manage that we pay for the natural resources that have been used, for the natural capital that has been used, and that we have to compensate somewhere and rebuild natural capital elsewhere.” In concrete terms, this would mean, for example, reforestation and the protection of rainforests. Herlyn believes it’s also a way to deal with the biodiversity crisis. Only companies are currently voluntarily on the way. Competitive pressure makes it difficult for many people to get involved in climate protection.

However, for both ideas, a sustainable economy and a post-growth economy, one thing is clear: restructuring is necessary – and it will not be easy.

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