Less Is More Rogue Economists Champion Prosperity without Growth


Part 2: Preaching a New Frugality

According to Niko Paech, a 52-year-old economics professor in the northern German city of Oldenburg, we continue to apply these remedies until GDP is back on track, even in the midst of a crisis. But, he adds, treating GDP as a measure of the prosperity of modern societies is downplaying the problem and is "a measure of environmental destruction."

Paech advocates a shrinking economy and preaches a new frugality. He has been wearing his striped brown sport coat for 25 years, and no matter where he is invited, he always takes his bike or the train. In fact, he has only flown once in his life.

Paech attacks what he calls our "autistic faith in progress." He is not interested in criticizing a few greedy executives for destroying a supposedly good system. For Paech, the system itself is broken, and instead of repairing it, he wants to rebuild it from the ground up. He no longer believes in reconciliation between the environment and the economy, and in the notion that a level of prosperity achieved through credit can simply be continued through green growth. And unlike many members of the environmentalist Green Party, Paech adds, he is "extremely conservative."

His message is simple: that we should be giving up and sharing some of our wealth. The labor market he envisions is full of thriving repair and maintenance shops. He wants to see our society become more civilized with less: less material, less energy, less waste and less pollution. He also believes that resources should be managed more effectively. We should produce the kind of clothing, he argues, that can be handed down from one generation to the next instead of throwing things away after wearing them just a few times.

The post-growth theorist explained to a perplexed journalist for the website of Bild, Germany's top-selling tabloid newspaper, that Germans are not role models when it comes to environmental protection because they have merely outsourced their dirty production. For Paech, wealth that can no longer be stabilized without growth is merely "the result of comprehensive environmental depredation."

The most important argument against growth skeptics like Paech is technology. Influential US economist Julian Simon, for example, predicted that technological advancements could bring us 7 billion more years of growth. The hope is that better and more environmentally friendly products will essentially eliminate the limits on growth. For example, the PR strategists of the Initiative for a New Social Market Economy (INSM), a German umbrella lobbying group supported by free-market-inclined politicians of all stripes, use the slogan "Less CO2 needs more growth."

But disconnecting growth from more consumption and environmental degradation is still just a dream. According to a study by the parliamentary commission on growth, prosperity and quality of life, which summarizes the current state of research in the field, growth with declining absolute resource consumption currently exists "as good as nowhere" in the world.

There are now alternative methods to measure growth, such as the National Prosperity Index developed by Hans Diefenbacher, an economist in the western German city of Heidelberg. He simply treats the negative impacts of economic activity as a reduction in our welfare. So far, his work has been largely ignored. But now even the divided parliamentary growth commission referred to his model in its final report, in which it recommended a new way of measuring growth, using an indicator called "W3." This method would not only provide information on wealth, but also on social matters, economic participation and the environment.

Leading 'A Subversive Double Existence'

But can an economy without growth truly exist? The question gives rise to great skepticism, as it does on an evening in the back room of a bar in the northern German city-state of Bremen. Niko Paech is talking to members of the Catholic Guild of St. Ansgar, a group of highly educated retirees who are relentless in their questioning.

How can you pay for our social systems when people are working 20-hour weeks, they ask? But we already can't pay for those structures today, Paech replies. In his system for the future, he explains, people would lead a sort of "subversive double existence." They would share and recycle, thereby outsmarting an industry geared toward nonstop renewal. People would only work 20 hours a week, but they would also have 20 hours of "market-free" time to provide for themselves.

But such slimmed-down jobs would hardly be enough for many people, says an older man. He hears that a lot, says Paech, especially when he speaks at union functions, where he is routinely grilled by his audience. Besides, says the economist, all the hype about jobs in our supposed knowledge society is in fact questionable. "What exactly are we doing?" he asks. "As we anxiously invoke competitiveness, we train younger and younger delegators with touchscreens to manage the dirty work, forcing Indians to whom the work is being outsourced halfway around the world to work extra hours so that we'll continue to be flooded with consumer goods." By now, some of his listeners are nodding in agreement.

Paech recently spoke at an event sponsored by Volkswagen, the German automotive giant. "I was in the lion's den, being showered with malice," he says. At a certain point, he asked what the workers did during the economic crisis, when so many saw their hours reduced under the Kurzarbeit program, the "short-time work" program that the German government used during the crisis to avoid layoffs by encouraging companies to reduce workers' hours while making up for some of the workers' lost salaries and benefits itself. "We worked in the garden, did things in the neighborhood and fixed things," they told Paech.

Translated from the German by Christopher Sultan


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frosty46 05/03/2013
1. Less Is More: Rogue Economists Champion Prosperity without Growth
Good article with sound points. The planets number one problem is stupidity and good luck with correcting that. Population reduction would be a grand starting point to correction. Sound wind, solar and hydro powers must be exploited to the fullest( too bad no one listened to President Carter). We here in America can not even begin to use logic for anything but weapons construction so we are at the mercy of greedy politicians and vast rightwing crime families. We have tried elections but the rightwing has total control over vote counting so--------------- Do not mean to be so depressing but at 66 I have little hope of any changes.
titus_norberto 05/03/2013
2. Just stating the trivial...
Just stating the trivial, I've been saying the same for years in many posts… I've been saying the same thing for years in many posts, the problem with Harald the weasel is that he is more interested in making money selling a BOOK saying exactly the same thing you can say in a POST for free… Harald simply states the problem without proposing a solution, which is not TRIVIAL to say the least, and has moral connotations… Do we control population growth or we grow more AUSTERE people ? Are we right discarding nuclear energy in an energy starved world ? What are the limits of an infinite growing economy ? Is it "purchasing power" rather rationing the solution ? I see Harald on the side of the problem rather than on the side of the solution… But without attempting to solve the core problems (it would be ridiculous to attempt it) it is clear to me that the STARTING POINT to A solution is for developed economies developing an economic model not requiring permanent GROWTH to achieve full employment.
gearecon 05/05/2013
3. Evolution of our economic system or revolution?
Can we grow towards another economic system by evolution or do we need a revolutionary change? Reading the article you might think revolutionary change is the only way out. I don't think a revolution is necessary, bringing in just a bit more fundamental common sense into our system will help the evolution towards more stability. We do not need to earn what we do not spend (nr 1 cause for cyclical recession) we just have to work less whenever there is less demand, not by massive unemployment but by working all a little bit less. see also: http://gearedeconomy.blogspot.nl/2013/01/geared-economy.html for some more sober proposals for change
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