John Kroencke: Environmentalism, Degrowth, and the Moral Case for Economic Growth

Those following the news in the U.S. and U.K. have strained to find much of intellectual interest in contemporary policy debates. Sure, there are ever-widening cultural battles and an array of topics on which one can admire the slogan-jousting of a few hired hands, but there is a seemingly small market for reasoned discussion about the nuts and bolts of policy. Even worse, there is little desire to think beyond direct, intended consequences. In this context, Ezra Klein’s recent article in the New York Times about supply-side thinking was a breath of fresh air. In the article, Klein argues that the American Left should concern itself more with economic growth and supply side issues rather than just redistribution or subsidies for those with low incomes. He sees in both federal and state policies a nascent transformation that he dubs “supply-side progressivism.”

It is worth quoting his argument:

progressives are often uninterested in the creation of the goods and services they want everyone to have. This creates a problem and misses an opportunity. The problem is that if you subsidize the cost of something that there isn’t enough of, you’ll raise prices or force rationing. You can see the poisoned fruit of those mistakes in higher education and housing. But it also misses the opportunity to pull the technologies of the future progressives want into the present they inhabit. That requires a movement that takes innovation as seriously as it takes affordability.

While Klein presents an optimistic case for a pragmatic left, there are many worrying trends. For one, some on the political left are drifting towards dangerously radical environmental thinking seen in groups like Extinction Rebellion. These individuals damage their purported cause by diverting attention from appropriate responses to the challenges of environmental degradation. While the dangers of environmental damage including climate change are obviously real (and the precise nature of some of the tail risks are difficult to calculate), the carbon-intensive economy is not something that can just be abandoned without consequences. Trade-offs exist and must be navigated. Innovation is needed to find the supply-side alternatives to damaging fuel sources.

While extreme ideas like degrowth may provide an attractive cause for many on the environmental left it is a clear example of a scenario where the medicine is far worse than the disease. Advocates often fail to deal with obvious problems in their moral thinking. As Kelsey Piper writes in a piece evaluating degrowth and prominent proponent Jason Hinkel, “The things degrowthers care about — leisure time, health care, life expectancy — are strongly correlated with societal wealth. The generosity of a welfare state and the availability of transfers to a state’s poorest people are also strongly correlated with societal wealth. Innovation, discovery, invention, and medical technology improvements are also strongly correlated with societal wealth.” The standard pro-market moral case against redistribution or other interventions that may threaten future growth, is that they are more morally complicated that advocates think because they risk future gains for the intended beneficiaries. This argument is even more important in the case of degrowth where the purported moral case is focused directly and explicitly not just reducing the rate of future economic gains, but on reducing the size of the economy and the myriad benefits it brings.

Almost as troubling as the core proposals of degrowthers are their critiques of other widely held benefits of a dynamic, forward-looking, enterprise economy. For instance, while the role of innovation in contributing to better outcomes including reducing climate change and mitigating its effects may seem obvious, many committed degrowthers decry “solutionism” or the idea that technology offers a way out of the problems. This concept allows them to discount any proposal short of their extreme ideas, sometimes with clear negative effects on their purported cause. For instance, a former member of Extinction Rebellion Zion Lights emphasizes the anti-nuclear mindset among other things that led her to leave the group, recognizing that to deal with climate change might entail embracing nuclear. Even Angela Merkel, a physics Ph.D., was persuaded to end nuclear power in Germany in the wake of the Fukushima meltdown. The consequence of this decision was that one of the most environmentally-minded countries emitted more greenhouse gasses.

While I’ve mostly written about the political left it is worth stressing that many of the same critiques apply to the contemporary right. The government under Boris Johnson has shown little interest in thinking about serious reforms to the underperforming National Health Service or other types of regulatory changes that led many on the right to support Brexit. Instead, governments and politicians both here and in the US are interested in a politics of increased spending, borrowing, and taxes. Many across the political spectrum are unhappy with the performance of the status quo and desire a return to supply-side thinking. I hope they all succeed.


John Kroencke is a Research Fellow at the Centre for Enterprise, Markets and Ethics. For more information about John please click here.