Planning beyond growth: rethinking economics to face social-ecological crises

The need for democratic macroeconomic coordination beyond growth

Today’s interdependent and aggravating social-ecological crises warrant a profound rethinking of our economic system. “Putting people and planet before profit” must not stay a slogan but become a reality. To make this happen, it is pivotal to challenge hitherto dominant paradigms, including economic growth as a dominant goal of economic activity and measure of welfare as well as ‘the market’ as most suitable mechanism of economic coordination. 

Degrowth and Post-growth (DG/PG) scholars have long engaged with these questions by rethinking the way our economy and society can be organised. The focus of DG/PG is on the Global North, which has contributed disproportionately to the environmental crisis and whose material wealth is intricately connected to exploitative relations with other world regions. DG/PG envisions a “planned reduction of energy and resource use designed to bring the economy back into balance with the living world in a way that reduces inequality and improves human well-being” (Hickel 2021). Such transformation involves technical as well as political challenges. As recently stated in this article, the former appear to be surmountable. The main barrier, however, lies in our contemporary, capitalist politico-economic systems, thus, raising questions of democracy, power and deliberate change. 

Proposals for transformation range from the establishment of eco-communities and urban gardening at the local level to policy interventions such as the imposition of absolute caps on greenhouse gas emissions and resource use, working time reduction, and the introduction of Universal Basic Services. While all these proposals can play an important role in a transition towards a post-growth economy, there is one crucial blind spot: that of democratic macroeconomic coordination beyond growth.

Why it is necessary?

As we argue with Cédric Durand elsewhere, the need for democratic coordination of economic activity arises out of the ambition for a profound and fast social-ecological transformation of the economy. This involves not only technical practicalities but also requires legitimacy and acceptance by the people concerned. A few examples illustrate the challenge. The key demand of degrowth is to establish absolute caps on CO2 emissions and resource use, which necessitates decisions over the acceptable size of respective budgets as well as societal priorities for their use, i.e. the distribution of remaining CO2 and resource budgets to specific economic activities, sectors, and regions.

Given the size of the necessary emissions reductions in Global North countries, economic transformation will need to entail the reduction of less necessary and emissions-intensive goods and services such as aviation, industrial farming, and luxury commodities — ascribing ecological planning and democratic macroeconomic coordination of industrial downscaling and ‘exnovation’ utmost importance. These processes of downscaling would liberate resources for strengthening future-fit and socially necessary economic activities — e.g. ramping up sustainable public transport, retrofitting housing, and rewilding — all of which require the allocation of necessary material and infrastructure.

By the same token, (de)prioritizing certain activities and sectors implicates changes to the world of work which would need to be democratically deliberated and governed. The phasing-out of the fossil industry and an increase in care, for instance, imply not only decisions over the quantitative increases and decreases of jobs in respective sectors but also qualitative changes in work patterns as well as education and training. The appreciation of un-commodified work, such as much of care work, heightens the challenge, especially when aiming at its recognition without commodifying it (see Chowdhury for a discussion). Beyond the fair, just, and sustainable distribution of natural resources and work, decisions over adequate technologies arise.

The elaboration of these decisions and their subsequent implementation pose central challenges for “planning beyond growth”. This is even more so as both elaboration and execution must be fundamentally democratic and participatory — not only to live up to the ambitions of DG/PG but also to cater for people’s empowerment through the transformation processes and ensure their legitimacy and acceptance. Accounting for today’s globally interconnected economy, the goal of restorative (climate) justice as well as local and regional diversity necessitates decision-making at and coordination of multiple levels. The design of purposeful institutions for the coordinated transformation of our economic system is a necessary and formidable task.

How to move forward?

Luckily, there are rich bodies of literature and historical examples that can serve as inspiration in this undertaking. There is a growing literature that explicitly seeks to elaborate democratic processes with the aim of ensuring wellbeing within planetary boundaries, including Half-Earth Socialism by Drew Pendergrass and Troy Vettese or Jan Groos and Christoph Sorg’s forthcoming edited volume on Democratic Planning in the 21st Century and Beyond. Some older proposals for democratic multi-level economic decision-making and organization continue to be discussed, e.g. the Participatory Economy, originally developed by Michael Albert and Robert Hahnel, and Pat Devine’s: ‘Participatory Planning through Negotiated Coordination’.

Going beyond theoretical developments, we can learn from the successes and failures of actual attempts at economic planning. This includes a critical scrutiny of socialist planning experiences as well as forms of planning in capitalist economies. A historical example of the latter are analyses of the war economies of the 1910s, in particular the Austro-Hungarian war economy, by Otto Neurath. More recently, the rapid reorganization of the British economy during the Second World War, when the state sought to simultaneously fight Nazi Germany and cater for people’s need satisfaction, offers insights into possible measures of strong state interventions, economic coordination, and the rationing of scarce goods and services, as well as their acceptance by the population. Another example is the French Central Bank’s use of monetary and credit policy as means to shape size and qualitative orientation of economic activity in the decades after WWII. The experiences of citizens assemblies, instituted in various countries to address the climate emergency, for instance, can teach lessons about the potential of direct citizens’ involvement in developing plans for dealing with critical societal questions.

Moving forward, it will be key to scrutinize these models and experiences to extract the technical and political lessons to address the aggravating social and ecological crises of our time. For that, we need criteria to compare and evaluate the adequacy of different models and approaches to abide by ecological and social goals.

In all that, the democratization and diversification of the planning debate itself is pivotal. This means, for instance, learning more from theories and experiences of economic coordination from the Global South and groups that are marginalized or oppressed, e.g., due to gender, race, sexuality, class, nationality, or disability. These views may give rise to very different visions of economic coordination than the hitherto dominant ones. The discussion and development of ecological democratic macroeconomic coordination for the 21st century has only just begun.