Why Degrowth is a More Scientific Approach to Economics
“Degrowth Economics is like the ‘Earth is flat’ group. Total Garbage”
That’s what an economist from a reputed university in the United States told me last year, when I asked her if I should pursue a Master's degree in Degrowth. I was already accepted into the program and was yet to confirm my spot.
Her advice? If you really want to contribute to solving climate change, go for a “more scientific” discipline that would help develop innovative technologies instead. While my background leans towards scientific disciplines, I was increasingly drawn to degrowth ideas, and here she was basically saying degrowth is a bunch of unscientific nonsense. Talk about an identity crisis! It felt like I had to pick sides.
Confused, I spent the next week untangling the knots between science, modern economics, and degrowth. Is degrowth really unscientific? Why? What does ‘being scientific’ mean in economics anyway? Here I present some insights I gathered and the conclusions I arrived at.
The Scientization of Economics
During the early 18th century, as Newton’s discovery of gravity was making groundbreaking progress in the field of physics, economists grew a rather strange obsession, to make Economics as prestigious as physics. This phenomenon even has a name, “physics envy.”
The attempt to make economics more like science can be traced back to the development of classical economic theory in the 18th and 19th centuries. Adam Smith, often considered the father of modern economics, attempted to develop a systematic and scientific understanding of economic phenomena in his influential work "The Wealth of Nations."
During the 1870s, economists like William Stanley Jevons and Léon Walras developed their theories and illustrated them, clearly imitating Newton’s laws of motion. Just like the force of gravity brings everything to rest, they came up with the construct of market equilibrium, which is achieved by various market forces, such as price vs demand/supply of goods or interest rate vs demand/supply of capital.
In the 20th century, economists such as Milton Friedman and Lionel Robbins further attempted to make economics more like science by adopting the methods and assumptions of the natural sciences, including the use of mathematical models and statistical analysis.
In 1932, Lionel Robbins, in his book "An Essay on the Nature and Significance of Economic Science," defined Economics as ‘the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.’ According to him, economics followed basic principles of ‘deduction from simple assumptions reflecting very elementary facts of general experience’, and were ‘as universal as the laws of mathematics or mechanics.’
How “Physics Envy” Destroyed the Planet
There have been a number of critiques of economics' aspiration to become more like a science. One concern is that the adoption of the methods and assumptions of the natural sciences has led to the oversimplification of complex economic phenomena. Many economic models make assumptions about human behavior that people are rational and make choices that are in their own self-interest, which may not reflect reality all the time. This can lead to inaccurate predictions or a distorted understanding of the real world. These simplified assumptions give validity and are fundamental to the growth models guiding real-world economic systems.
Another major concern is that the reliance on mathematical models and statistical analysis has led economics to become too focused on technical details and has lost sight of the broader social and political implications of economics. Factors that cannot be quantified or easily modeled, such as cultural and historical context, power dynamics, and environmental and ethical considerations, are left out entirely when policies are made solely on the basis of statistical models and their predictions. This reductionist approach towards economics has given birth to several dangerous assumptions and public policy goals, that are leading planetary life into abyss.
For example, the oversimplification of economics has led to a narrow focus on GDP growth as the primary measure of economic performance. This further leads to an emphasis on short-term gains at the expense of long-term environmental sustainability and human well-being. GDP growth may be boosted by exploiting natural resources, such as oil and gas, without considering the long-term costs of resource depletion and climate change. They conveniently ignore the negative impacts of growth, such as pollution, and often treat the environment as an externality, which means that the costs of environmental degradation are not reflected in the price of goods and services.
Another assumption they make is that market forces alone can efficiently allocate resources and correct for externalities without any government intervention. This assumption has led to under regulation and given rise to ecological degradation. The distribution of the costs and benefits of growth is also left unchecked, giving rise to inequality, unequal exchange, and continuation of colonial practices.
The Dangers of the Growth Imperative
But, perhaps the worst assumption these models make is that economic growth can continue indefinitely, regardless of its impact on the environment or the use of natural resources. That human ingenuity, scientific advancements, and technical innovations can beat any potential hurdle in economic growth, and we can continue to increase global production forever.
"Anyone who believes in indefinite growth in anything physical, on a physically finite planet, is either mad or an economist." - Kenneth E Boulding
The pursuit of economic growth has become the universal goal of public policy and economic decision-making, increasing overall prosperity and improving living standards. However, this focus on growth has also led to the over-exploitation of resources and humans and destroyed the environment.
One way the growth narrative has contributed to the over-exploitation of resources is by promoting the extraction and consumption of natural resources faster than they can be replenished. This has led to environmental degradation and the depletion of natural resources.
In addition, the pursuit of economic growth has also been criticized for leading to the exploitation of human labor. Some have argued that the focus on growth has led to the creation of low-paying jobs, poor working conditions, and a lack of protections for workers.
Economics Has Done a Bad Job of Mimicking Science
Economics is a social science, while the natural sciences (such as physics, chemistry, and biology) study the physical world. Economics is often concerned with understanding and predicting the behavior of human beings and organizations, which can be complex and unpredictable. In contrast, the natural sciences typically deal with more predictable and regular phenomena governed by relatively stable laws and principles.
Probably the one assumption that sets economics apart from natural sciences, is that the economy can grow infinitely on a finite planet. Nothing in nature grows forever, even the cancer cells that multiply seemingly endlessly, end up killing their host and degrade. In fact, if we look at the laws of thermodynamics, the ideology of infinite growth with finite resources falls flat on its face. The entropy rule suggests that the processes of industrial transformation irreversibly convert high-order natural resources to low-order materials, and given we have finite resources, the growth simply can’t continue forever.
I’ve never formally studied economics, I come from a science background, and from what I could gather, modern economics is not a science. Their models rarely make any non-trivial predictions about how actual systems behave, they simply suggest how they should in an ideal world. That is simply ideology, mere social constructs. The term ‘social science’ is perhaps best described as an oxymoron.
What Happens When Actual Scientists Think About Economics?
The earliest critics of the growth model actually came from scientists.
In 1972, Donella Meadows (Ph.D. in Biophysics from Harvard) worked with her team at MIT to develop a sophisticated model, World3, to simulate 5 parameters under business-as-usual conditions.
The findings were published in the book, Limits to Growth, stating that “if the present growth trends in world population, industrialization, pollution, food production, and resource depletion continue unchanged, the limits to growth on this planet will be reached sometime within the next one hundred years. The most probable result will be a rather sudden and uncontrollable decline in both population and industrial capacity.” Recently Yale reported that the current empirical data is broadly consistent with the 1972 projections.
In 1971, Nicholas Georgescu-Roegen (a mathematics graduate from the University of Bucharest) argued that all natural resources are irreversibly degraded when used in economic activity because of the entropy law. Given that natural resources are exhaustible, human activity, in the long run, will have to “decrease” to a scale that can be supported by solar energy.
Influenced by Georgescu-Roegen, a French philosopher André Gorz (chemical engineering graduate from EPFL) first coined the term degrowth in French (décroissance) in his 1977 book, Ecology as Politics. He argued that perpetual growth was physically impossible, and that ecological realism demands that we consume less.
Soon after, the idea of degrowth gained significant momentum. Even some economists realized how absurd modern economics is and started thinking about alternative theories. Economist Harman Daly, a student of Georgescu-Roegen, saw economics as a biological organism instead, rather than following laws of motion. In his paper, On economics as a life science, he drew two diagrams, one for biological organisms and one for economies, showing how they both have matter and energy flowing through them, leaving degraded waste behind.
“As a student at Rice University in the 1950s, he was interested in both the sciences and the humanities. He decided to study economics, thinking it would give him a foot in both. He soon discovered that this was not the case and that mainstream economics instead had “both feet in the air”. His life’s mission became to change this — to give economics a grounding in both the sciences and the humanities, in particular physics, ecology, and ethics.” Dan O’Neill about Herman Daly
This trend of scientists seeing through the cracks of the economy and realizing degrowth is the answer, continues in the 20th century. In 2018, over 200 scientists wrote to the EU institutions, insisting they explore possibilities for a post-growth future. They demanded that they focus on well-being instead of growth, use better indicators to indicate progress than GDP, and actively discuss the economic transition. Today, some of the main proponents of degrowth also began as physical scientists… Julia Steinberger has a PhD in physics (daughter of a Nobel Prize Winning physicist) and Giorgos Kallis has a PhD in science too.
Degrowth - a more scientific approach to economics
Perhaps, degrowth is nothing but a more scientific way to approach the question of how the world should function, ensuring well-being for all living and non-living things. As Federico Demaria puts it, degrowth challenges the hegemony of growth and calls for a democratically led redistributive downscaling of production and consumption to achieve environmental sustainability, social justice, and well-being for all.
Degrowth is not articulated as an alternative economic model or a system. It doesn't really demand to make changes to the current economic processes, to do less of them, or slow down. Rather it aims to detach itself completely from the economy as a system of representation and calls for the re-ordering of social and ecological values and develop a matrix of alternatives.
“Degrowth is not presented as a programme, an ideology or another economic theory, but as a symbolic challenge to policies that herald growth as an end in itself; degrowth is not to be turned into a blueprint or an end in itself, but to remain a means for fostering a spirit of critique, for questioning the priority accorded to economic values and principles” - Valérie Fournier
Now when I think of it, maybe the neoliberal economist I spoke to was partly right, equating degrowth movement to flat earth groups. Both tend to challenge deeply rooted notions (growth and gravity, respectively). The only difference is, flat earthers challenge a scientific fact while degrowthers challenge a social construct. Constructs can be demolished, and replaced by new constructs, more rooted in empirical reality. And the fact that degrowth is realized and backed by so many scientists, makes it a vital construct to root for in all its complex and chaotic glory.