The paradox at the heart of capitalist growth

Stockmarket Charts Photo” by Negative Space is marked with CC0 1.0.

There is an extraordinary paradox at the heart of capitalist growth in rich economies, which is important to understand. Here’s how it works:

First, capital seeks to privatise and enclose key goods that we need in order to live – healthcare, housing, energy, transport, etc – making these things increasingly expensive for us to access. This is done explicitly in the name of growth.

Remember, GDP only measures things with market prices. When you push a public good into the market, GDP goes up. So privatising healthcare systems, privatizing public housing stock, all of this is great for “growth”…

But who benefits from that growth? The people who own the privatized goods. Their income goes up. For the rest of us, we’re stuck with a rising cost to access these essentials. In other words, we’re poorer, even if our income is unchanged, and even as GDP per capita is rising.

Then they tell us the solution to this is… more growth. “We need more growth to meet people’s basic needs!” So we all have to produce more stuff in sectors that we don’t necessarily need to expand just in order to access things that we clearly do need to survive.

Indeed, this is the engine of growthism. The privatisers and austerity-mongers know this. They seek to induce an artificial scarcity in order to compel people to constantly increase their production for capital, which is of course the primary beneficiary of this treadmill.

But we could just as easily do the opposite. De-enclose and de-commodify key social goods in order to make them universally accessible to all. This would allow people to live well without needing constant growth in order to do so.

This would liberate us from the growth imperative and free us to think more rationally about the economy. What sectors do we want to improve? And what sectors are clearly destructive and should be scaled down? In other words, growth of what, for what end, and for whom?

Needless to say, in addition to improving social outcomes this approach is extremely powerful when it comes to climate mitigation, as we describe in this Nature Energy piece, and could keep 1.5 degrees within reach.

Originally tweeted by Jason Hickel (@jasonhickel) on 20/03/2022.