Review: The Magical Thinking of Degrowth

This is a review of the blog post Degrowth: Solving the Impasse by Magical Thinking by Branko Milanovic. An exciting new activity—my first blog post about another blog post.

Am I a degrowther? Maybe. I don’t think I’m well-versed enough yet on these matters to label myself with a position. But from what I’ve written so far, you can see that I am interested in the problem of growth. I don’t remember how I found this blog post, but it is interesting, and I would like to analyze and respond to it.

In this post, Milanovic discusses the ideologies of “degrowthers” versus “the rest of us,” with a focus on debunking degrowther ideology. He takes a very critical view of degrowthers, saying they “live in a world of magic” while also saying that they are “not irrational people.” That stuck out to me—describing degrowther thought as incredibly irrational while also saying they aren’t irrational people. How can that be?

I will summarize the beginning of his explanation: to halt growth but also raise people out of poverty, it is mathematically necessary for income to be redistributed from the rich to the poor. Degrowthers realize this, but don’t want to say it out loud because it’s “political suicide” (in the rich world, at least), leading to an impasse. This impasse is that they cannot (morally, I presume) leave people in poverty, but nor can they “reasonably” argue that 90% of Westerners should have less income. The solutions degrowthers develop for this impasse are “semi-magical” and “magical” ideas because they “linked with any tools of achieving” them. To be clear, “semi-magical thinking” is thinking about objectives that are not yet achievable.

End of summary.

Before getting into the instances of “semi-magical” thinking, I’ll first point out an important detail of this impasse. The two things at odds are not of the same nature: there is the moral imperative to let people escape poverty and the practical impossibility of significantly reducing the income of rich people (“political suicide”).

Moving on, the first instance of “semi-magical” thinking Milanovic presents is the argument that “GDP is not a correct measure of welfare,” which Milanovic explains why he disagrees with. He unfortunately doesn’t explicitly say how he thinks this solves the degrowthers’ impasse. My guess is that he sees the unlinking of GDP with welfare as a way to solve the practical arm of the impasse: you can take money away from rich people if you convince them that it won’t make them sadder. Alternatively, he might mean that it solves the moral arm of the impasse: you can increasing welfare of the poor without increasing income. Or both. Mr. Milanovic, if you see this, please let me know what you meant. My actual problem so far though is that there’s a difference between disagreeing with an idea and finding a lack of tools for execution, the latter of which he himself used to define “magical thinking.” So first of all, this doesn’t actually qualify as “magical thinking” by his definition, because he doesn’t specify a lack of actionable plans.

Nevertheless, I will also investigate the claim that GDP is indeed a correct measure of welfare. There is a fair lot of agreement that GDP does not correctly measure welfare. Simon Kuznets, who invented the term GDP, said that “the welfare of a nation can scarcely be inferred from a measure of national income.” A good deal of research has gone into constructing welfare indicators that are not GDP. Even in middle school, I was taught that GDP does not completely measure welfare. So why does Milanovic believe that GDP does correctly measure welfare? He argues that is “fairly accurate overall,” and that people seem to strongly desire increasing their income. Is this sufficient proof that GDP does not correctly measure welfare? It depends how strictly it must measure to be “correct.” We observe an undeniable trend that wealthier people tend to be happier: a very well supported positive correlation. It’s also obvious that money isn’t literally welfare. A $20 bill makes a beggar far happier than it makes a billionaire. So it’s a positive but nonlinear correlation. Is that enough to be a “correct” measure? I’m not an expert on the literature, but it seems to me there is substantial disagreement that cannot be dismissed so easily.

The second level of semi-magical thinking he identifies actually satisfies his definition this time. This is the strategy of convincing presumably already well-off people that living more modestly is better than pursuing unending wealth. He identifies the problem with implementation: “how will people be obliged to consume only so much and not more?” He concludes that degrowthers have found no politically acceptable method, and thus have failed to provide a “tool of achieving,” making it “magical thinking” to make modest living the objective. In short, my take on this is that Milanovic is simply far too pessimistic and sets too narrow a view of what a “tool of achieving” can be. At countless points in history we have seen objectives with what appeared to be no politically acceptable means of achievement. Prior to the abolishment of slavery in the Western world, nobody would have seen it as politically acceptable. Giving up an institution that provided and continued to provide great wealth to slaveowners, must have certainly seemed politically impossible “magical thinking” at the time. For starters, the enslaved had no political representation. But does that mean abolitionists were irrational to pursue abolition anyway? Even if they were irrational, we are clearly far better off that they did.1 Perhaps there isn’t a politically acceptable method yet, but there are other methods. Growing movements of frugality, minimalism, and altruism all promote some idea of modest living. I suspect Milanovic may believe that all these movements will amount to nothing, which really gets at a crux of the issue. On either side of the growth debate, people see the other side as prophets of an impossible future. Degrowthers see the forever growth story as something fated to fail when we hit the physical boundaries of the planet. Growthers (is that a name?) see curtailing growth as morally, ethically, or practically impossible. More on this later.

Moving onto Milanovic’s third level of “direct magical or religious thinking.” Here, having discarded the previous political objective, he identifies the next degrowther objective of promoting material abstinence in a religious/moral way to (in my reading) solve the practical arm of the impasse. Here I see a fallacy: he only gives examples of preaching extreme material abstinence, in the way of monks like Simeon the Stylite. What about religious/moral callings for merely modest living, as in the previous example? We have plenty of examples of moral and religious ideologies/interpretations that promote modest, but not extreme ascetic living. Rather, making extreme asceticism a strawman, he correctly argues that the vast majority of people do not want to live with hardly anything, then incorrectly concludes that no religious/moral ideology can be a tool of degrowth. But if we recall the original problem we were presented with (redistributing wealth from the rich to the poor) we can see that extreme poverty for all is a mathematically impossible outcome. The current world average salary ($1,480 PPP-adjusted dollars per month) is rather poor in the view of the wealthy, not because $1,480 buys less in the US (the PPP-adjustment took care of that), but because we are used to buying a lot more. But while the global average probably falls below what people in wealthy countries consider “modest,” it’s probably still above “ascetic monk.” So the strawman stands, or rather, falls, and Milanovic concludes that “now, the relevance of moral preaching of abstinence is close to zero.”

All this speaks to the immense difficulty of degrowth, the challenge for degrowthers and the dealbreaker for “the rest of us.” Promoting moderation and altruism is seen as “political suicide,” as a completely unreasonable and unacceptable objective. On the other side of the growth aisle, promoting unending growth is seen as completely unreasonable and unacceptable on account of planetary limitations that, if hit at high speeds, spell a welfare catastrophe.

But I think that those who do and don’t agree with degrowth aren’t in “two different ideological worlds.” Some people have thought a lot about growth and degrowth and have strong opinions. Most of us probably haven’t. There are only two ideological worlds when you split the world in those who agree with you and those who don’t. That’s called polarization, and is known to be supremely unproductive, if not downright dangerous. Rather, I think we recognize a lot (but not all) of the same phenomena, and we see those problems, their causes, and their solutions, in a spectrum of different ways. It can be hard to see the common understandings when our conclusions are so different, but it’s key not to write off the other as irrational and stupid, which, despite what he says at the start, Milanovic seems to do a lot of by the end of his post.

My take is that Milanovic’s arguments for the magical irrationality of degrowthers are flawed. He uses constricted views of what seems roughly correct and what is currently politically easy, and a strawman argument that degrowth requires sacrifice on the level of asceticism. I still agree with the fundamental thrust of the degrowth argument, which is that infinite growth is impossible, and that restructuring society to cope with that reality is incredibly important for our overall welfare. Figuring out how to do that is no easy task, and should certainly not be considered settled by throwing a buzzword salad at it and hoping it’ll work out, as Milanovic ridicules. But the lack of an easy solution doesn’t disprove the existence of a problem, nor diminish the importance of finding a solution.

1. I must acknowledge that this example comes so quickly to mind thanks to one of Joshua Spodek’s recent podcast episodes, find here or here

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