Does it really need to be the end of the world?
Eternal growth necessary or not
Growth is one of those economic ideas that many people take for granted as a necessity for economic stability and prosperity.
But is it really? It's time to ask: growth for whom and at what cost? Much of this view is rooted in the thinking of Ayn Rand. She argued that it was the right of the greedy to pursue maximum profit that drove humanity forward. Rand saw solidarity as destructive and believed that without the unbridled greed of capitalists, society would collapse into a state of idleness where people would not be able to support themselves (‘Atlas Shrugged’, 1957). But what if this is not true? What if we can create a stable society that is not dependent on constant economic growth?
MMT - an alternative
Modern Monetary Theory (MMT) offers an alternative to the idea that growth is a necessity. As I interpret MMT, states that issue their own currency, like Sweden, can use government investment and progressive taxation to create full employment without chasing growth. Stephanie Kelton describes in ‘The Deficit Myth’ (2020) that it is inflation, not money, that sets the limit. As long as production matches the capacity of the labour force, investments can be made without the risk of inflation. Mariana Mazzucato shows in ‘The Entrepreneurial State’ (2014) how the state can drive innovation, such as GPS and the internet, through active investment. Technological progress has also multiplied the capacity of the labour force. This means we can produce more with fewer resources. MMT enables the financing of green transition and social projects without risking hyperinflation. We can afford good, affordable and beautiful housing for all, full employment, good social security, first-class education, health and social care, low retirement ages and high pensions for all, and a humane immigration policy. We don't even need high taxes for low and middle-income earners. They strengthen the real economy more through their purchasing power than by paying high taxes. The only reason we have chosen not to do this is to make the richest richer. But won't that lead to hyperinflation? We often misunderstand the risk of hyperinflation from cases like the Weimar Republic. There, hyperinflation was caused by huge war reparations and production losses, not by expansionary government fiscal policy. As long as resources are used wisely, instead of focusing on rising stock prices and more private bank loans, we can create a society where people's needs and the environment are at the centre.
The fact that the state is running a deficit only means that it has spread money around society. As long as there is enough productive capacity, the state does not need to collect all this in taxes. Therefore, a state that can create its own money does not need to focus on having its accounts in monetary balance like a household. The state should not have financial budgets but budgets that govern based on the needs and productive capacity of people and nature.
The technology that can make a difference
Technological developments have opened the door to a more sustainable world. Scientists are now working on and close to developing vaccines to protect bees against neonicotinoids and bee brood disease. Neonicotinoids are pesticides that agriculture needs but which threaten bees and thus life on earth. Bees are crucial for pollination and global food production. At the same time, we will soon be able to create meat in biotechnological chemical processes from hydrogen and carbon dioxide in the air. Today, this process can create butter. This technology could reduce the climate impact of livestock farming and free up land for other purposes. We also see the development of new, environmentally friendly batteries and hydrogen as alternatives to fossil fuels.
Despite these opportunities, many technological advances are mainly used to increase profits and stimulate further economic growth, rather than improving people's living conditions. Instead of chasing growth, we can use these technologies to build a society where both people and nature are better off. The prerequisite for such a development to take place is an ideology of those in power to care for the people and the planet. Historically such a development arose as long as the people protested.
Resource scarcity and escape from reality
The oil crisis of the 1970s changed the world. The crisis was used to push neoliberal policies, with austerity and reduced government investment as the watchwords. The result was an increased focus on individual gains and the dismantling of common resources. The price was stress, bad health and lower productivity growth. Meanwhile, today we see billionaires speculating on escaping to Mars to escape climate change, instead of investing in preserving our own planet. But if we have the technology to terraform Mars, shouldn't we be able to use the same resources to restore Earth's ecosystem?
Globalization bad economics
Neoliberal globalization policies focus on free trade and deregulated capital flows. This has widened gaps in the West, leading to increased unemployment and right-wing extremism, only to promote the profits of multinational corporations. Globalization has exploited those who get low-wage jobs in the countries where production is located. But the increase in production capacity has made these countries richer and militarily stronger. In a conflict between the West and China, for example, over the profits and resources of world production, the West is not certain to win. Since 1800, the country with the strongest production capacity has won the war. First imperialism and now post-colonialism have often forced the Global South to sell raw materials cheaply while importing expensive processed products. This is reminiscent of old colonial patterns. To create a more equitable and green world, policies are needed that redistribute resources and strengthen local economies in both South and North. Modern Monetary Theory (MMT) offers a way to invest in development without countries getting trapped in debt. This can reduce the risk of economic tensions and future conflicts.
The price of inequality
In 'The Spirit Level' (2009), Richard Wilkinson and Kate Pickett show that inequality hurts not only the poorest, but also the richest. People in more equal societies enjoy better health, longer life expectancy and less stress, regardless of income. Although the richest may have greater financial resources, they live in a society where social tensions and health problems are higher. A fairer distribution of resources could make us all happier and healthier.
Development and well-being instead of toil and stress
The Western economic model has long been based on a consumer culture where products are designed to quickly become obsolete. But what if, instead, we started producing goods that last longer and enable people to work shorter hours? If we can build houses that last hundreds of years, clothes that don't need to be replaced every season and reduce the need for constant re-consumption, both the environment and people would be better off. It's a perspective where technology is used to support life instead of forcing us to work ever harder to keep the wheels of the market turning.
Good working conditions are effective
In ‘Your Brain at Work’ (2009), David Rock explains how our brains are at their most productive when we are relaxed, equal, friendly and undisturbed, rather than stressed. When we need big ideas, we should not even be focused. Most effective are work environments where employees can work without constant interruptions or distractions and with the opportunity for breaks. This improves both creativity and productivity. This is the opposite of the idea that hard work automatically leads to better results.
Austerity - a conscious strategy for power
Clara E. Mattei describes in “The Capital Order” (2022) how austerity policies developed after World War I were not about improving the economy, but about restoring the old class divisions. By creating shortages and unemployment, the elite could secure their power. This was known to carry the risk of right-wing extremism and fascism. But this approach has become obsolete. Today, we have the knowledge and technology to build a society where no one has to be left behind. We can choose a different path, but it requires us to let go of the idea of perpetual growth as a goal.
The goal is up to us to choose
Available research and technology suggests that we no longer need to chase growth to create a good society. MMT, sustainable energy sources and a renewed vision of the labor market allow us to prioritize human well-being and the environment. We can create a society where we work less, live better and leave a healthy planet for future generations. We don't have to follow Ayn Rand's vision of an exclusionary society where the greediest lead the way. We can create a world where solidarity and cooperation drive progress. A green, progressively taxed and politically regulated MMT-based capitalism could give us the tools to do this. It is not a utopia - it is an opportunity that stands before us.
I doubt that theories and ideologies play such a great part in it. Alfred Chandler has proposed a much simpler explanation for the shift in the 80s in his thick book about the big industrial giants of the time, Scale and scope, 1990.
Simply, in the early 70s these big corporations had become so efficient that they could produce much more than there was effective demand for in the world. They faced an overproduction crisis. Up to then, they had been able to provide themselves with finance out from earned profits. But now they couldn't. They had to ask the financial markets for help.
And the financial markets – otherwise called "the rentiers" – did, on conditions. They weren't interested in production. They just wanted quick returns for their money. CEOs that still wanted to invest and build were kicked out, and a new speculative breed was called in.
Since the ideas of the ruling class is the ideas of society (Karl Marx) the ideas of the rentiers got hold of society. And these ideas were exactly those you have listed, Oskar. They have always been. But they were not in control until about 1980.
Even if they hadn't been, I believe we would have had a hard time to get society right, and get rid of unnecessary or harmful work. Even the industrial capitalists who ruled up to about 1975 were interested in profit first, last and in the middle. The difference was that they wanted it to invest in new production. If that production laid the earth bare it was none of their concern.
Environmental destruction has grown in three big steps: the first states, the colonial empires, and the big industrial corporations. Each time the capacity to make big decisions without having to meet the unwanted consequences of the decisions has grown with a factor of ten. The climate changes are the fruit of the industrial corporations of the early 20th century, not of the speculators of today.
Not that these are innocent, of course. They have created a political athmosphere where it is almost impossible to decide of anything, and a political establishment unable to understand what should be decided, for that matter. This is a typical sign of a society in decay. Sometimes a competing actor may turn it right (e.g. the French revolution, the revolutions of 1848, the labour and anti-colonial movements), but it is terribly hard to see any today.
It is relatively easy to see what one should do, but organize something with the power to do it is much harder. As Boris Kagarlitsky, the incarcerated Russian social critic, says: there is much ideology about utopias out there, but very little about strategic guidance. I think we should – not stop, perhaps, but downgrade our thinking about what we want to have and focus more on how we should get it.
Oskar, yes, what you have described has happened. You have managed to capture the phases of a paradigm shift. The money or the life? Behind everything is the question who is man and what forms a good society? Daron Acemoglu, Simon Johnson and James A. Robinson are awarded the Sveriges Riksbank's prize in economic science in memory of Alfred Nobel in 2024. The cause of third world poverty was the Western world's colonialism and , plundering of natural resources and the lack of institutions and organization for agriculture, business, health school the concern for fair distribution and with a democratic legal life. The spiritual development of man and also coexistence Society is thus a human unity for and with each other. A life principle that exists in nature like the beehive's togetherness. The earth itself is a house for humanity. A household for the human family So society is a household. One could say that the economic process is similar to our blood circulation for distribution or the water cycle for the nature of the earth.