Capitalist diversity and de-growth trajectories to steady-state economies

Abstract

Growth-critical scholarship has done much to both expose the environmentally unsustainable nature of the capitalist growth-economies of the overdeveloped part of the world and to develop an alternative vision of a de-growth transition leading to a steady-state economy. However, this scholarship fails to adequately take into consideration that if planned de-growth actually materialised it would do so in societies that differ considerably from one another and that this would have implications both for the transition processes and the nature of their outcomes. In other words, not enough importance is ascribed to capitalist diversity and the nature of institutional change in the growth-critical literature. Against this background, the purpose of the present article is to make the “concrete utopia” of de-growth scholars and steady-state economists more specific by utilising insights from scholarship on capitalist diversity and institutional change. On the basis of a typology of different models of capitalism, the article suggests that if de-growth transitions took place they would take different forms and lead to a variety of types of steady-state economies (SSEs). To illustrate this point, three ideal-typical SSEs are delineated.

Introduction

Against the backdrop of resource depletion, ecosystem degradation and a worsening climate crisis, a mushrooming literature is questioning the feasibility of continued economic growth in the overdeveloped part of the world. It is positive that an increasing number of scholars reflect critically on the growth paradigm, which still enjoys a hegemonic status both within academia and in society more generally. However, as noted by Herman E. Daly (1991: xv), ‘[i]t is not enough to attack the progrowth orthodoxy; we must have an alternative vision’. It is thus very encouraging that growth-critical scholars are not contenting themselves with demonstrating the environmental downsides of capitalist growth economies: several works go further and outline what an economic order with little or no growth could look like and how it could come about. Visions of the steady-state economy (SSE), post-growth and de-growth abound (e.g., Dietz and O'Neill, 2013, Jackson, 2009, Lewis and Conaty, 2012, Speth, 2008) and in recent volumes of journals such as Ecological Economics, Journal of Cleaner Production and Capitalism Nature Socialism, lively debates over these “concrete utopias” are taking place (Kallis et al., 2012, Kerschner, 2010, Klitgaard and Krall, 2012, Martínez-Alier et al., 2010, O'Neill, 2012, Saed, 2012, Victor, 2012).¹

Whilst the growth-critics deserve much credit for creating blueprints for an alternative economic order, these blueprints are not without limitations. One major limitation is the failure to consider the implications of capitalist diversity – i.e. that capitalist societies are characterised by very different institutional structures – for the nature of transition trajectories and their outcomes. That is, just as all capitalist societies took shape on the basis of what came before them, whether that was feudalism (e.g., Wood, 2002) or communism (e.g., Kovacs, 1994), so would environmentally sustainable societies to some extent be shaped by the diverse institutional structures of contemporary capitalism. This would be the case regardless of whether such societies were to emerge as the outcome of an incremental (and democratically inclusive) transformation process, as growth-critics generally envisage (e.g., Demaria et al., 2013), or after a collapse of the current system. In other words, if a “sustainabilisation” of the societies of the overdeveloped world was in fact to take place, which is by no means a foregone conclusion, both the transition processes and their results would almost certainly differ from one country to the next in numerous respects. France and the United States would be as unlikely to follow the same transition path as Spain and the UK would be unlikely to end up with (near) identical socio-economic systems. It is occasionally acknowledged in the growth-critical literature that sustainable alternatives to current societies may differ from one place to another (e.g., Schneider et al., 2010) and moreover there are some examples of empirical studies of specific countries that relate transitions to existing institutional configurations (see Seidl and Zahrnt, 2010). Overall these themes have however received little attention and in this context it is telling that growth-critics consistently speak of their vision in terms of one alternative model: a or the steady-state economy; a post-growth economy, a post-growth society.²

The question guiding this article is what the likely consequences of capitalist diversity are for the nature of transitions and their outcomes. The article takes as its premise a scenario in which the pro-growth discourse is no longer hegemonic and in which a majority of the public and political decision-makers throughout the developed world consider it desirable to initiate incremental de-growth processes, the intended outcomes of which are the appearance of SSEs. As such it does not address the question of whether, and if so when, planned de-growth transitions aiming to “right-size” the economies of the overdeveloped part of the world are likely to take place. While local and global initiatives will undoubtedly be decisive elements in such transitions (Kallis, 2011), the focus here will mainly be on national-level institutions and policies, assuming that these will also be crucial (DegrowthDeclaration, 2010, Demaria et al., 2013).

The article first reflects on the general nature of capitalism as an economic system and relates this account to the notions of the SSE and de-growth (Section 2). It then introduces some key insights from research on capitalist diversity and institutional change (Section 3). Some growth-critical scholars have successfully engaged with parts of this literature (Jackson, 2009, Koch, 2012; see also Klitgaard and Krall, 2012 and Røpke, 2005), but the implications of capitalist diversity for de-growth transitions to sustainable societies have yet to be considered. Utilising a typology of different models of capitalism, this article suggests that de-growth transitions are likely to differ considerably and lead to a variety of SSEs. To illustrate this point, three ideal-typical SSEs, each fusing elements from an existing model of capitalism and its underlying ideology with de-growth/SSE thinking are delineated (Section 4). A concluding section recapitulates the main argument and reflects on its political implications.