The Holy Father is head of one of the largest religions on Earth. He also endorses an academic and social movement known as degrowth. The rough idea here is that economic growth should be severely slowed, stalled, or even reversed due to environmental and ecological (and sometimes spiritual) reasons. Pope Francis commented:
We know how unsustainable is the behaviour of those who constantly consume and destroy, while others are not yet able to live in a way worthy of their human dignity. That is why the time has come to accept decreased growth in some parts of the world, in order to provide resources for other places to experience healthy growth.
The degrowth movement is not new and Francis is not alone. Famed and perpetually outraged, Greta Thunberg echoed the sentiment behind degrowth:
You have stolen my dreams and my childhood with your empty words… People are suffering. People are dying. Entire ecosystems are collapsing. We are in the beginning of a mass extinction, and all you can talk about is money and fairy tales of eternal economic growth.
What if they are right? Should we aim for degrowth, slowing or reserving economic progress for the sake of the environment? The purpose of degrowth sounds noble enough, and in fact, it may be good for the environment to slow or shrink economic growth. Does that make it a good idea? No. For at least two reasons: economic growth is the product of factors such as inclusive economic and political institutions and is guided by information provided by markets. To slow or reverse economic growth would require damaging social trust and inclusivity and would require information that markets simply cannot provide.
First, as the political philosopher, Brian Kogelmann, recently argued, on plausible theories of economic growth, such growth is the natural product of factors like social trust and capital, freedom of inquiry, and inclusive economic and political institutions. When such conditions are present, economic growth will often, though not always, be the natural result:
Under reasonably realistic assumptions, when you establish inclusive economic and political institutions, create conditions of free inquiry, and bestow dignity on the bourgeoisie, growth will almost certainly occur. Since we have independent moral reasons to insist on inclusive institutions, open inquiry, and bourgeois dignity, we are committed to continued economic growth.
Because factors like inclusive political and economic institutions and freedom of inquiry are the bedrocks of a liberal pluralistic democracy, of which we have independent moral and political reasons to support, we have solid independent reasons to want economic growth to persist. To produce degrowth, we must hamper or eliminate inclusive economic and political institutions, social trust, and freedom of inquiry, among other social and civic values and freedoms that are morally and politically good independently of economic growth. Degrowth would thus easily make society worse off morally and politically. If such theories of economic growth are correct, then at a minimum, there is a major political and moral cost to the degrowth movement, and there are independent moral and political reasons — other than wealth — to resist degrowth, and insist on growth, no matter how rich one’s nation or trade union becomes.
Second, degrowth lacks the necessary information to succeed. Consider that where the goals of the degrowth movement are concerned, there are better and worse ways to do degrowth. One way to accomplish degrowth would be for the United States to initiate a nuclear war with Russia and China. Insofar as Earth is a nuclear wasteland, we can expect that economic growth would stagnate and likely stall for a long time. There are better and worse ways to degrow the economy, but without the information needed, it is unclear how it could be done.
In contrast, growth tends to rely on markets and price information to determine how to secure economic growth. Markets and price information tend to reflect supply and demand pressures generated and aggregated across the entire economy. This diffuse information then informs the actions of companies and individuals in the marketplace that, under the right conditions, result in economic growth. As economist and frequent AIER contributor Michael Munger, explains:
Prices are not given; they are not inputs to allocation decisions. Prices are the result of millions of people, all over the world, simultaneously choosing and reacting to the feedback that dynamically adjusting prices reveal about the consequences of choices by others […] Having the amounts of resources in a database tells you very little. Only the fact that an ounce of gold costs more, in terms of value foregone, answers the question. But that information is not calculated by markets, it is generated by markets.
The diffuse nature of markets means that pricing information is generated and accumulated over large swaths of the economy and is thus reflected in prices. Without that information, though, it is hard to picture how degrowth would determine where to slow or shrink the economy, in a manner that was better for the environment without that information. Degrowing an economy well is just as complicated as growing an economy, and there are better and worse ways to do each. The advocate for growth, luckily, has price information to guide the process, whereas it is unclear where the advocate for degrowth will get the needed information to effectively slow and shrink the economy with minimum negative moral, economic, and political externalities.
For these reasons, just as I am highly doubtful that someone could plan a robust modern economy, I highly doubt that degrowth can be achieved without infringing on central essential moral and political values and without the aid of markets and prices, even with the best intentions.
