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Economy without growth

Does the economy always have to grow? No, say critics. Growth can even be harmful. Rethinking is necessary to press the stop button.

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"If everyone walks around naked and content, growth will not be necessary," jokes Christoph Schneider, head of the Economic Policy Department of the WKO. What lies behind this statement: The needs of humans do not stop and have constantly evolved. Not only the urge for more and more goods and services, but also the yearning for new things are driving growth. Add to that the desire for choice in life. "Although we almost always only eat schnitzel at the tavern, we still want sheep's cheese balls wrapped in bacon on the menu," says Schneider.
So as long as there are growing demands for wealth, so long is growth necessary. Examples include higher wages, more powerful smartphones and even more layers of bacon over sheep's cheese.

Good life for everyone?
Globalization or foreclosure? Free trade yes or no? At the "Good Life for All" congress, around 140 international experts from science, civil society, interest groups, politics and business discussed with some 1.000 conference participants.
"It is about grounding globalization and regaining room for maneuver 'from below' with emancipatory economic regionalization. But we need both: autonomy and cosmopolitanism - a homeland-related cosmopolitanism, "said Andreas Novy, head of the Institute of Multi-Level Governance and Development at WU.
However, in addition to new answers to the challenges of globalization, it would also need an examination of the dangers they bring: "Real progress does not require saying no to a development that above all causes global inequality and ecological problems," says Professor Jean Marc Fontan from the University of Montreal.

Growth in the blood

But what is economic growth actually? In numbers, it is the increase in gross domestic product. Put simply, it is the sum of all wages in a country. The higher wages companies pay their employees, the better they are. Because the more you earn, the more often you go to the inn. This in turn increases the turnover of the companies. The guests often order the expensive sheep's cheese balls.

The pulse of capitalism

Growth, then, is the blood in the veins of capitalism. Without growth, our system would go to its knees, because companies are in constant competition with each other. They can only survive if they get bigger and better. "If a company makes the same sales every year, it can not offer salaries to its employees. Therefore, collective agreement increases during the economic crisis, in which there has been no growth in some industries, were irresponsible, "warns Schneider in retrospect. In the short term, higher wage costs were offset by savings in research and development. A dangerous endeavor in the long run, as innovations suffer from it. The dream of the second layer of bacon around the cheese moves into the distance, because productivity does not increase. The innkeeper does not invest in a bacon wrapper so his cooks could wrap up more sheep's cheese for more guests in less time. Interim conclusion: If we want to earn more and thus enjoy more prosperity, the turnover of the companies must grow.

From bacon to meager pensions

So that the pensioners can afford the ever more expensive Schnitzel, their pensions must rise. In addition, more and more pensioners join, keyword aging society. Without economic growth, pensions will soon be enough for a frittate soup. "Without economic growth, social benefits would not rise in an economy," Schneider points out. Although the state can shoot (which it already does about a third of the pensions), but not infinite.

The zero growth scenario

Austria's economy is forecast to grow this year by 1,5 percent, just as much as last year. No cause for euphoria, but also no one to mourn, because 2013 GDP did not grow at all. Assuming it stopped at zero, how long would our system remain reasonably stable? "A maximum of one legislature period of the government, which corresponds to a business cycle," Schneider estimates vaguely.
And then, after about five years of stagnation, things quickly go downhill. Immediately the fear among the workers is about to lose the job. The consequences: People consume less and save more. Visiting the inn becomes a rarity. Less consumption hits the most labor-intensive services sector, which accounts for almost three-quarters of GDP. This acts like a turbo in the vicious circle, which leads to even higher unemployment.
That was the story of capitalism. But theoretically it's different too.

No stop button in sight

"Stop pressing at the moment is not possible because our system is designed for innovation and growth," says Julianna Fehlinger, activist and former chairman of the globalization-critical NGO "Attac". Among other things, this internationally active organization promotes greater social justice and is not an advocate of maximum growth. However, a single person can not start the zero-growth mode, but must simultaneously move through all areas: private, corporate, state. Even a single economy can not escape growth, because globalization makes competition international. To renounce growth would therefore have to pull the whole world together. Utopia? Yes!
But the ideology of post-growth economics is not that radical. It refers to an economy without GDP growth, but without sacrificing wealth. Strengthening local and regional self-sufficiency and reducing globalized industry are the ingredients of this recipe.

A prime example of regional self-sufficiency is agriculture. Activist Fehlinger has lived as a self-experiment two years on a farm to experience food sovereignty firsthand. There, the community living on the farm has used the model of solidarity economy: common fund, every work is equally valuable - whether outside the field or at home in the kitchen. Her conclusion: "Agriculture is attractive, although there is a lot of work behind it. If more people farmed farms, less argar industry would be necessary. " Growth in the agricultural industry means social and ecological exploitation, because it destroys small-scale agriculture. The high price pressure makes small farms difficult to profit.

But the world is not just farms. "You have to think outside the capitalistic market model in all areas," says Fehlinger. An example is "self-managed businesses". These bossless companies are owned by the workers who lead them democratically. That is, the workers do not have to earn the salaries of the management, but only their own. Among other things, this model came to fruition after the state bankruptcy of Argentina around the millennium. However, with moderate success, because in practice it can not be applied to all companies. But let's go further with the idea of ​​self-managed businesses.

Solidary economy

They are under the roof of the "solidary economy". This is a very broad concept, which includes, among other things, socially equitable and ecological thinking without surplus production. "Social economy is the goal in a system without growth, because market economy creates inequality," says Fehlinger. Example: Despite GDP growth, real statistical income in Austria has not risen in recent years. "The average consumer has nothing of growth," criticizes Fehlinger. One of the reasons for this is the increasing number of part-time jobs.
In the solidaristic economy, growth is not the leitmotif, but quite possible. However, human needs have to shift. Instead of a fast car, it is then the need for mobility. Away from the material to the desire for more education, culture and political participation.

At the moment we are in a vicious circle. "Companies say they are geared to the needs of people, and they generate them through advertising themselves," says Fehlinger. Different companies act differently in the idea of ​​a solidary economy. Existing examples are farms that implement solidary agriculture. Acquired shares are used to pre-finance agricultural production for the farmer and at the same time guarantee the purchase. This eliminates surpluses. At the same time, the shareholders also bear the risks if, for example, hail destroys the Fisole crop.

 

Green growth through repairing

The growth critic, WU professor and chairman of the "Green Educational Workshop", Andreas Novy, has a clear thesis: "Growth leads to the exploitation of humans and nature." He calls for a green, sustainable growth and a "civilization of the good life". Regional production and consumption structures, shorter working hours and a resource-saving repair eco-nomie are in the foreground. The top priority is the modesty of people instead of greed.
Digitalization and automation would make a massive reduction in working hours possible, according to Novy. This leaves more time for activities in the social area, such as care for the elderly and for the repair of equipment. "We do not work," he adds. Even if GDP does not grow, that does not mean that there are no rising wages. But on the contrary. "Repairing a washing machine costs money, which in turn flows to specialized craftsmen," explains the economist. At the same time, no new one has to be produced for the repaired machine. The production volume of companies would therefore decrease. "The one grow, while the others shrink," Novy sums it up.
Green growth means innovation and development without exploitation. Novy: "Technology increases the efficiency of resource use, for example, when waste heat from industrial plants is used for heating." Of course, this thesis does not work, of course, because technology can only make a contribution. Novy calls for a new organization of the economy. "We have to say goodbye to the competition model, because that's the biggest growth driver." Currently, growth leads to overproduction with throwaway culture.
The way out of the growth delusion is difficult, because power structures would have to be broken up. "Why is VW, for example, reluctant to develop electric cars? Because the company would earn less, "says the growth critic.

Photo / Video: Shutterstock.

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Written by Stefan Tesch

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