Who Is Pitching "De-growth"? The Harvard Business Review

At some point, we'll realize the GDP-Growth Club is about as ridiculous as the Flat Earth Society. The big difference is one is inherently nihilistic, while the other is populated by people who wear tinfoil hats.

The GDP brigade with their fetish for perpetual exponential growth as the solution to all our problems includes every government in Canada, provincial and federal. Ditto for governments across the developed world and the emerging economies. It's part and parcel of the neoliberal model they embrace.

It came as a bit of surprise to find an article promoting "de-growth" in the pages of the Harvard Business Review. The article is written by two business profs, Bothello (Concordia) and Roulet (Cambridge).

...with today’s the climate crisis, debates around degrowth have been reinvigorated, and many major figures such as Noam Chomsky, Yanis Varoufakis and Anthony Giddens have, to varying degrees, expressed support for the idea. 

For others though — especially business leaders — degrowth is completely unthinkable, not least because of the anti-capitalist and anti-consumerist roots of the term. The prevailing view is that growth is an economic necessity, and any threat to that not only undermines business, but basic societal functioning. For instance, the CEO of H&M Karl-Johann Persson recently warned about the dire social consequences of what he perceives to be a movement of “consumer shaming.” Framed in these terms, the resistance of multinational CEOs and entrepreneurs alike is predictable, as is the reluctance of politicians to promote degrowth policies that would potentially prove unpopular with key constituents. The economist Tim Jackson provides a concise assessment: “Questioning growth is deemed to be the act of lunatics, idealists and revolutionaries.”

Strike Three for perpetual exponential growth.

First, given the finite nature of our planet, infinite economic growth — even of a different variety — is a logical impossibility. Secondly, innovation and improvements produce, in many cases, unintended consequences. One of which is the Jevons paradox, where individuals compensate for efficiency through increased consumption. For instance, more energy-efficient refrigerators lead to more refrigerators in a home. 

The third and most fundamental issue is that the degrowth movement has already begun: at a grassroots level, consumer demand is actively being transformed, despite political and corporate reticence. A recent YouGov poll in France highlights that 27% of respondents are seeking to consume less — double the percentage from two years prior. The number of people eating less meat or giving it up altogether has been rising exponentially in recent years, too. Similarly, the movement of Flygskam (literally “flight shaming” in Swedish) has had early successes in reducing pollution: 10 Swedish airports have reported considerable declines in passenger traffic over the past year, which they attribute directly to Flygskam.

As one door closes, another opens.

Flygskam has been a boon for train travel, bolstered by a social media movement called Tågskryt (“train brag”). Meanwhile reduced meat consumption has been accompanied by an explosion in meat substitutes that produce one-tenth of the greenhouse gases compared to the real thing. Accordingly, degrowth reshuffles competitive dynamics within and across industries and, despite what many corporate leaders assume, offers new bases for competitive advantage.

The authors identify three strategies for business to adapt.

First, firms can pursue degrowth-adapted product design, involving the creation of products that have longer lifespans, are modular, or are locally produced. Fairphone, a social enterprise, eschews the built-in obsolescence of larger mobile device manufacturers and produces repairable phones that dramatically extend their longevity. Similarly, the start-up The 30 Year Sweatshirt sells high-quality, durable products that run counter to fast fashion principles. 

Second, firms can engage in value-chain repositioning, where they exit from certain stages of the value chain and delegate some tasks to stakeholders. (I really don't understand this one)

Third, firms can lead through degrowth-oriented standard setting. This entails creation of a standard for the rest of the industry to follow. The apparel company Patagonia — that explicitly follows an “antigrowth” strategy — is the poster child for this philosophy, offering a worn-wear store and providing free repairs for not only their own products, but also for those of other garment manufacturers. Walmart and Nike have solicited advice from Patagonia on such practices, and more recently H&M imitated the service with a pilot in-store repair facility. In a similar vein, the automobile company Tesla released all its patents in 2014, seeking to catalyze the diffusion of electric vehicles. Such initiatives were not merely marketing ploys, but also strategies to standardize a practice or technological platform throughout an industry — one in which companies like Patagonia or Tesla would have existing expertise.

Until now, consumerism has been driven by the markets. It may be time for consumers to take the whip hand, transforming the markets to conform to a fast changing world. The sooner the better.