Shrinking Giants, Part 1: Deconstructing growth

Moving towards post-growth in a world where states must grow or lose their security

This is the first article in a new 8-part series based on an essay by Ronan Murphy. The global economy runs on a simple logic. States must grow or be outcompeted, and those that fall behind lose their security. In a system where power still flows, ultimately, from the barrel of a gun, Ronan explores what this means for anyone hoping to build something different.

Post-growth political economy, security, commons, alternative finance, and the governance of planetary futures.

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Introduction

In the shadow of escalating great power politics, the idea of wellbeing-oriented local and planetary economic governance systems emerges as a radical yet increasingly convincing alternative to the existing global economic order. One that, to many, offers freely the most powerful force known to humanity. Hope. Hope in the face of declining living standards, hope when a nice place to live is a pipe-dream. To others it represents a regressive Malthusian distraction to the progress we have defined ourselves by for the last two hundred years (at least in the West), an insult to our ability to adapt and overcome. The roughly 2.7 degrees of global warming that our current and woefully inadequate emissions trajectories have us on may make clear which is the reasonable approach.

This challenges entrenched Westphalian state-society relations. The current geopolitical system, rooted in a relentless pursuit of accumulation, power, economic growth, energy security and militarism, is fundamentally incompatible with the ideals of sustainable long-term resource management, conservation, and the delivery of an increased quality of life for Earth’s population of nearly 10 billion by 2050. Current growth-led trajectories don’t have global poverty alleviation rates consistent with a minimum, but still much too low, daily income of $5 per day being met for 207 years.¹

At the heart of this lies the link between a nation’s military-industrial complex and its economy, itself a product of realist conceptions that nation-states are first and foremost concerned with security, power, and survival in the anarchy of international relations. The relentless drive for economic expansion, often justified as a means to build national security and maintain influence, has led to an insatiable consumption of biophysical resources. This trajectory is increasingly at odds with the urgent need to address the looming threat of ecological systems collapse due to overconsumption.

This is a paradox. Our shared future demands we reduce growth, but doing so under a shadow of competitive geopolitics seems to undermine the very security needed to make that transition viable.

This provocation serves to explore the very real fear that no nation-state can commit to significant reductions in resource use and consumption without fundamentally undermining the structures that underpin their military and economic strength, and in turn, national security. And that even if attempted, capitalist forces in the global and national economies respectively would ferociously respond with economically destructive actions such as capital flight and investment strike. Karl Polanyi described this dynamic in 1944. When society attempts to protect itself from the destructive consequences of unregulated markets, markets push back. He called it the “double movement”.² We have seen it play out repeatedly across two centuries of industrial capitalism, and there is no reason to believe a post-growth transition would be spared.

This deadlock represents, I think, the most formidable barrier to the realisation of a hypothetically remedial a-growth (or even any truly-sustainable) political transition that advocates for a deliberate downscaling of production and consumption to achieve ecological and social sustainability.

This series will explore these topics, and some potential solutions, using the following structure.

1. Deconstructing Growth

2. On Inequality

3. Security Gaps and Lessons from Rojava

4. Guns or Butter

5. From Leviathan to Gaia

6. Beyond Fossil Finance

7. Notes on Techno-Libertarianism

8. Pillars of a Different Vision

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Deconstructing Growth

Infinities are powerful ideas. When discussing human nature, human potential and capacity for improvement, we often describe them as endless, boundless, or infinite. Thus, infinities are assumed and taken for granted in the systems we design – the economy included.

From the perspective of a physicist, modern notions of endless compound interest-led increases in value make very little sense. If exponential economic growth could continue indefinitely, it would need to be the most powerful force in the universe, because it would need to overcome some otherwise fundamental physical limits. Beyond thermodynamic barriers to growth, there are spatial and biophysical barriers to growth on a finite planet,³ and were this barrier to be overcome, an upper limit to potential growth and value via limits to theoretical productivity, expansion and value. Assuming we humans colonised and productively designed a Milky-Way-sized economy based on either material extraction or services over a conservative estimate of 100,000 years, physical limits, no matter the size, can never satisfy an exponential function of growth, with rather paltry estimates of annual return rates in such a scenario ranging from 0.075% to 0.1%, and if each individual person manages to produce a whopping googol dollars of 2020-equivalent value per year, 0.3%.⁴

These are important theoretical exercises in challenging ideas of anthropocentric infinities, and open the door to a potentially liberating acknowledgement of limits in wider social consciousness.

Growth is more than Simon Kuznets’ measure of a nation’s goods and services (GDP). It is an idea. It was not until the 1950s that growth as a basis of policy became dominant. It is a social process, maintained via a form of “dynamic stabilisation”; much as a bike finds stability in speed, modern economies must continuously expand in order to maintain their structure.

It is also a descriptive term for the material processes an economy with all its social metabolism facilitates. Complexity economics, as developed by Brian Arthur, Eric Beinhocker, and the Santa Fe Institute tradition, gives us some of the tools to understand why this is so.⁵ Economies are not equilibrium machines that can be dialled up or down by adjusting policy levers; they are non-equilibrium, path-dependent systems in which growth emerges from interlocking feedback loops, institutional lock-ins, and self-reinforcing dynamics. The bike analogy works because the structure of the economy is inseparable from its momentum. You cannot stop pedalling and expect the thing to remain upright. A sustainable economic transition then requires both the political will to slow down and the structural redesign of the feedback dynamics that make expansion a precondition of stability. This has consequences for everything that follows in this series.

One dimension of this structural compulsion is the monetary system itself. The financial system creates money primarily as interest-bearing debt. When a bank extends a loan, it does not lend out existing deposits, It creates new purchasing power ex nihilo, as Jakab and Kumhof demonstrated for the Bank of England in 2015.⁶ That new money enters the economy carrying an obligation of principal plus interest being repaid. But the interest was never created. It must be earned by expanding economic activity. Growth, in this reading, is a structural consequence of how money is created, and not just a priority of policy. It then follows that a no-growth economy would under current monetary arrangements tend toward cascading default, as borrowers compete for a stock of money insufficient to service the aggregate debt.

Tim Jackson and Peter Victor explored this in 2015, modelling whether credit creation and interest-bearing debt produce an inherent growth imperative. They found that interest-bearing debt does not mechanically require growth in all conditions, but they concluded forcefully that monetary reform remains essential to a sustainable economy, given the system’s tendency to drive “unsustainable levels of public and private debt, increased price and fiscal instability, speculative behaviour in relation to environmental resources, greater inequality in incomes and in wealth, and a loss of sovereign control of the money system”.⁷

The problem runs deeper than even the mechanics of credit creation. The entire apparatus through which societies recognise, account for, and distribute value is calibrated for a growth economy. Robert Costanza estimated the annual value of global ecosystem services at $33 trillion in 1997, a figure that exceeded global GDP at the time.⁸ None of this appeared on any balance sheet. The institutional capacity for converting ecological and social value into something legible to markets, and therefore into something that can attract investment and sustain livelihoods does not exist at scale. Herman Daly spent decades arguing that conventional economics treats the economy as a closed system exchanging goods and money, ignoring the biophysical throughput of energy and matter on which all economic activity ultimately depends.⁹

A post-growth economy therefore requires different money as well as an alternative accounting infrastructure altogether, one capable of recognising forms of value that the current system ignores. You cannot exit the growth imperative without exiting, at least partially, the monetary and accounting systems that enforce it.

As a psychological, social, and material phenomenon, an alternative framework must focus on more than just removing GDP from policy circles. Transcending growth dictates the deconstruction of its philosophies, roles in wider power dynamics, and its ecological consequences.

Critiques of growth span ecological, socio-economic, cultural, anti-capitalist, feminist, anti-industrialist, anti-development, and green-growth dimensions.

Growth destroys the ecological foundations of human life. The prevailing circular flow model does not account for dependence on resources, energy or sinks. GDP is not necessary, and in many cases counterproductive, for net increases in human quality of life – what Herman Daly called “uneconomic growth” – the observation that beyond a certain income level, more growth brings more costs than benefits (the Easterlin Paradox).¹⁰ Costa Rica, with a GDP per capita more than five times lower than the US, consistently scores higher on the Happy Planet Index.

The endless pursuit of growth produces alienating ways of working, living, and relating to each other and nature, fuelled by David Graeber’s cultural critique “Bullshit Jobs”, where he challenges dominant conceptions of humans as homo economicus, seeing us instead as adaptable, socially dynamic communities who have thrived on cooperation.¹¹

There is a risk in this cultural critique, however, of treating growth as something purely imposed from above. Marshall Berman’s reading of modernity as a lived experience in All That is Solid Melts into Air complicates the picture. The same forces that alienate and exploit also liberate. The first generation to have electric light, the first woman in a family to attend university, the sense that tomorrow could be genuinely different from yesterday, are not false consciousness. They are real experiences of emancipation that billions of people alive today associate with economic development. A post-growth programme that dismisses this desire, treats it as propaganda or delusion, or does not adequately satiate the will for progress in new terms, will fail to persuade the people it needs most.

Continuing growth depends on continued exploitation and accumulation of capital in the hands of a minority at the expense of an overwhelming majority – what David Harvey describes as “accumulation by dispossession”.¹² Nitzan and Bichler’s “Capital as Power” framework pushes this further. In their analysis, capital is not a productive input at all, but a quantification of organised power, and accumulation is fundamentally about differential advantage over others rather than absolute wealth creation. Dominant capital groups do not simply benefit from growth. They actively sabotage alternatives that threaten their relative position, what they call “strategic sabotage”.¹³

This maps onto the dynamics of capital flight and investment strike described earlier. Resistance to post-growth transitions is as much a defence of profit as it is a defence of the metric by which power itself is measured. It is based on gendered exploitation and devalues reproduction, and the vital care work on which any market economy depends. Both are overwhelmingly carried out by women (particularly in the Global South), and remain systemically sidelined. Depending on the method of calculation, this work represents between 30 to 70 percent of a country’s economic output.¹⁴

Modern industrial development, regardless of ownership model, has become authoritarian, alienating, and restrictive of self-determination. As Andre Gorz wrote in 1985, the fact that industrialism is common to capitalism and socialism illustrates the power and scope of the concept.¹⁵ From a global justice perspective, “growth” and “development” are 20th century inventions that create and maintain neo-colonial dependencies, reducing countries of the Global South to material suppliers without large value gains, reinforcing asymmetric power dynamics on which modern Global North quality of life depends. Immanuel Wallerstein’s “World-Systems theory” builds on this further, arguing that the global economy is not a collection of independent national economies at different stages of development. It is a single system with a core, a periphery, and a semi-periphery, in which the periphery is structurally required for the core to function. The promise that all nations can “develop” simultaneously is a contradiction in terms, because the system depends on unequal exchange to reproduce itself.¹⁶

And finally, “green-growth” in practice is built on a flawed understanding of long-term thermodynamic rebound effects. Brockway et al. find that there is little evidence or precedent for absolute decoupling of emissions and energy use from GDP growth, that global trends are going in the opposite direction, and that overlooked efficiency rebound effects may erode more than half of expected energy savings.¹⁷ Timothee Parrique’s “Decoupling Debunked” report similarly finds that decoupling at a rate consistent with Paris Agreement emissions trajectories seems unlikely, given the lack of accounting for the role economic growth plays in production, biophysical throughput, and associated emissions,¹⁸ and that even if decoupling did begin to happen, we could not in any scenario decouple fast enough to limit warming to Paris Agreement levels.

Growth provides the theoretical consent for certain kinds of limited and limiting profit-oriented politics. It is an emergent hegemonic structure and process shaped by intertwined dynamics of political economy, ideology, and militarisation. It is about power. Governments legitimise themselves by promising growth, corporations depend on it for profit, and superpowers treat GDP as a proxy for geopolitical clout. Decades of propaganda have made perpetual growth appear natural, necessary, even unquestionable – a common sense backed by institutions and ideas that mask its contradictions. As a result, the paradigm self-perpetuates, written into election platforms, development policies, and security strategies worldwide. Those sounding the alarm are dismissed as idealists.

Deconstructing growth means exposing it as a political construct. One that serves specific interests and is enforced through global institutions and military might. Nations use access to markets and resources (and the threat of force) to maintain growth at home, from colonial extraction to twin-deficit-fuelled U.S hegemony. Any serious attempt at any kind of truly sustainable transition, therefore, directly challenges entrenched power structures.

In short, moving beyond growth is inherently subversive. It strikes at the heart of a global system built on competition, accumulation, and the politics of progress. This is why a post-growth vision will be fiercely resisted by those who profit most from the status quo, unless we preempt and counter that resistance by building new systems that can survive this process.

Notes

1. Woodward, D. (2015). ‘Incrementum ad Absurdum: Global Growth, Inequality and Poverty Eradication in a Carbon-Constrained World’. World Economic Review, 2015(4), pp. 43-62. The 207-year figure was popularised by Hickel, J. (2017). The Divide: A Brief Guide to Global Inequality and its Solutions. London: Windmill Books. See also Hickel, J. (2015). ‘It will take 100 years for the world’s poorest people to earn $1.25 a day’. The Guardian, 30 March.

2. Polanyi, K. (1944). The Great Transformation: The Political and Economic Origins of Our Time. New York: Farrar & Rinehart.

3. Daly, H.E. (1977). Steady-State Economics. San Francisco: W.H. Freeman. See also Daly, H.E. (1992). Steady-State Economics (2nd ed.). Washington, DC: Island Press.

4. Manheim, D. and Sandberg, A. (2021). ‘What is the Upper Limit of Value?’. Preprint, Future of Humanity Institute, Oxford University. Available at: https://philarchive.org/archive/MANWIT-6

5. Arthur, W.B. (2015). Complexity and the Economy. Oxford: Oxford University Press. See also Beinhocker, E.D. (2006). The Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics. London: Random House Business.

6. Jakab, Z. and Kumhof, M. (2015). ‘Banks are not intermediaries of loanable funds -- and why this matters’. Bank of England Working Paper No. 529.

7. Jackson, T. and Victor, P.A. (2015). ‘Does credit create a “growth imperative”? A quasi-stationary economy with interest-bearing debt’. Ecological Economics, 120, pp. 32-48.

8. Costanza, R. et al. (1997). ‘The value of the world’s ecosystem services and natural capital’. Nature, 387, pp. 253-260.

9. Daly, H.E. (1999). Beyond Growth: The Economics of Sustainable Development. Boston: Beacon Press.

10. Easterlin, R. (1974). ‘Does Economic Growth Improve the Human Lot? Some Empirical Evidence’, in David, P.A. and Reder, M.W. (eds.) Nations and Households in Economic Growth. New York: Academic Press.

11. Graeber, D. (2018). Bullshit Jobs: A Theory. London: Allen Lane.

12. Harvey, D. (2003). The New Imperialism. Oxford: Oxford University Press.

13. Nitzan, J. and Bichler, S. (2009). Capital as Power: A Study of Order and Creorder. London: Routledge.

14. Schmelzer, M., Vansintjan, A. and Vetter, A. (2022). The Future is Degrowth: A Guide to a World Beyond Capitalism. London: Verso.

15. Gorz, A. (1985). Paths to Paradise: On the Liberation from Work. London: Pluto Press.

16. Wallerstein, I. (2004). World-Systems Analysis: An Introduction. Durham: Duke University Press.

17. Brockway, P.E., Sorrell, S., Semieniuk, G., Heun, M.K. and Court, V. (2021). ‘Energy effi ciency and economy-wide rebound eff ects: A review of the evidence and its implications’. Renewable and Sustainable Energy Reviews, 141.

18. Parrique, T. et al. (2019). Decoupling Debunked: Evidence and arguments against green growth as a sole strategy for sustainability. Brussels: European Environmental Bureau.