Now progressives want to shrink the global economy

Humanity is threatened by multiple Armageddons.

Climate change, new strains of COVID-19, influenza and other viruses, President Vladimir Putin’s madness and China’s Pacific ambitions threaten severe weather, droughts, coastal flooding, unnavigable rivers, disappearing island nations, mass migrations, disrupted global supply chains, lost access to commercial fertilizer, Famine, even more extreme poverty and world war.

Enter the left stage of the degrowth movement. She slams modern economics for linking human progress to GDP growth, arguing that climate change and poverty could be better addressed by shrinking the global economy — by perhaps a modest 0.5% a year.

This has not stood up to the experiences of market economies and the geopolitical challenges democracies face from autocracies – China, Russia, Iran, Saudi Arabia and others.

From 2005 to 2019, developed countries enjoyed GDP growth and significantly reduced carbon emissions.

Green power will prove more expensive than fossil-fuel generation because, even if it’s cheap to come by, it requires expensive fossil fuels and battery backup to deal with heatwaves slowing windmills and cold weather affecting the grids burdened. All of this gets worse as heat pumps replace gas stoves and electric vehicles replace internal combustion engines.

EVs are more expensive to manufacture because their batteries and electric motors require a lot of lithium, copper, cobalt and other metals. Global production capacities are often located in politically and geographically unfavorable places – in the Congo, in Latin America and in China.

Without growth, the adoption of these technologies will require a dramatic reduction in living standards, already depressed by inflation, trade sanctions against Russia and decoupling from China.

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If the pathogens afflicting humanity stagnated, we would eventually have all the vaccines and medicines we need. But they’re not, and rapidly manufacturing the treatments needed to fight new iterations of COVID-19, other viruses and bacteria is costly.

Even if NATO spends over $1 trillion a year on defense, Russia, China, Iran and others spend enough to wreak havoc that could end badly for democracy.

Unless we surrender to disease, surrender to dictatorship, give up our liberties, and allow millions of others to die or be enslaved, the United States and its allies must spend more money and labor, not less, on health care and defense. For this to happen, economic growth must be politically acceptable.

Social and economic justice politicians do not believe warnings about the dangers posed by increasing autocratic power. These views are not popular with the broader Democratic Party. But if the US and other rich countries committed to shrinking their economies to lower emissions, the left would likely succeed, introducing dramatically redistributive taxes on income and wealth to address public health and safety challenges and a to avoid impoverishing the bottom half of their population.

In general, the degrowth movement advocates smaller homes, less meat, and more free time—activities whose benefits a simple GDP calculation fails to capture. But indicators of wealth such as infant mortality and leisure improve as per capita income rises, and these are dividends from free-market dynamics.

To cut GDP without losing ground would require abandoning capitalism and markets in favor of government planning. It is doubtful that personal liberty and democracy could survive it all, and autocracies and sympathetic countries – like China and India – are burning more coal these days, not less.

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The degrowth people are remarkably silent about realistic policy prescriptions for downsizing advanced industrial countries while treating the poor in the developing world equally.

This process would require cutting the Organization for Economic Co-operation and Development’s GDP by much more than 0.5% per year, while allowing developing countries to continue to grow to improve the conditions of the poor, low-carbon technologies to acquire and mitigate coastal flooding and unbearable heat.

The development of access to technology and growth depend on trade with and growth in developed countries, but degrowth activists rightly point out that much of North-South trade is based on resource extraction.

A move away from this trade would result in fewer developing country food imports from countries like Ukraine and North America and prodigious producers from developing countries like Brazil, less reliance on commercial fertilizer made from natural gas and potash mines from countries like Russia and Canada, and massive donations from CO2 require avoidance and mitigation hardware from richer countries.

As developed countries shrink their economies, it would be naïve to expect such generosity, and alternative food supplies through sustainable local agriculture is a nostalgic fantasy.

Before the Industrial Revolution, per capita growth was very slow – maybe 0.2% or 0.3% per year, even with late medieval innovations like the three-piece plow and harness – but in 1800 the world population was only 1 billion.

Today, with a world population of 8 billion, it is ridiculous to think that developing countries could produce enough food relying on cow dung fertilizer. Anyway, cattle exhale CO2 and the degrowth people might want us all to become vegetarian.

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• Peter Morici is an economist and Emeritus Professor of Economics at the University of Maryland and a national columnist.

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