Episode 137 – When Less is More with Jason Hickel

Macro N Cheese – Episode 137
When Less is More with Jason Hickel
September 11, 2021

 

[00:00:04.300] – Jason Hickel [intro/music]

For degrowth basically, there are two main objectives. One is an ecological objective, which is to reduce resource and energy throughput, and then the other is a social objective, which is to improve people’s access to the things that need to live well and ensure that secures a right. So basically, a social guarantee.

[00:00:23.960] – Jason Hickel [intro/music]

So, I think that the MMT proposal for how to think about taxation, i.e. not as a way of funding public activity, but rather as a way of holding demand on the economy can be applied to ecological economics as a tool for reducing excess resources and added fees. And that, I think is very promising.

[00:01:42.050] – Geoff Ginter [intro/music]

Now let’s see if we can avoid the apocalypse altogether. Here’s another episode of Macro N Cheese with your host, Steve Grumbine.

[00:01:42.820] – Steve Grumbine

Alright. This is Steve with Macro N Cheese. I’ve got Dr. Jason Hickel joining me today and I’ve tried to get together with this gentleman for a while now. His work in Degrowth is absolutely must read. Everything that he has put out has been absolute gold and it was my distinct honor for him to agree to come on with me. Let me introduce them a little bit more.

Dr. Jason Hickel is an economic anthropologist, author and Fellow of the Royal Society of Arts. He’s a visiting senior Fellow at the International Inequalities Institute at the London School of Economics and professor at the Institute for Environmental Science and Technology at the Autonomous University of Barcelona. He is associate editor of the Journal World Development and serves on the Statistical Advisory Panel for the UN Human Development Report in 2020, the Advisory Board of the Green New Deal for Europe, and a Harvard Lancet Commission on Reparations and Redistributive Justice.

Jason’s research focuses on global inequality, political economy, post development, and ecological economics, which are the subjects of his two most recent books; “The Divide: A Brief Guide to Global Inequality and Its Solutions,” Penguin 2017 and “Less Is More: How Degrowth Will Save the World,” Penguin 2020.

[00:03:07.420] – Grumbine

Let me say I’m a project manager by trade, and my tagline is I am the Less is More project manager. So this is really neat. Jason, thank you so much for joining me today, sir.

[00:03:18.340] – Hickel

Thanks very much, Steve. It’s good to be with you.

[00:03:21.090] – Grumbine

Absolutely. So this word degrowth, it scares some people. That word is especially in economic terms, it kind of jolts you. What is degrowth?

[00:03:31.960] – Hickel

Yeah, it is. It’s a striking term. I agree. And I should mention I didn’t come up with the term. It was around before I was writing about it, but in fact, it’s got an interesting pedigree that is rooted in the anti-colonial struggle from the global south. We can discuss that later.

But before I describe what degrowth is, let me just briefly kind of outline the key background stakes of this question. Okay. So obviously we’re in a crisis of ecological breakdown. And crucially, this is not just about climate change, which is what we focus on mostly in terms of our media and so on.

We’re also overshooting several other key planetary boundaries, and we see this in the form of habitat destruction, soil depletion, deforestation and biodiversity loss. Okay. And these dimensions of the crisis are being driven by excess resource use. So in other words, all the material stuff that we extract and produce and consume.

Okay. So we have to pay attention to both of these issues – emissions and energy, on the one hand, and resource use on the other. And the two are very closely tied because the more resources we use, the more energy we require. The more energy we require, the more difficult it is to decarbonize.

Right? And unfortunately, too often the resource use side of this equation falls out of the picture. And it’s really important to bring that back in. And that’s what ecological economics has been about for decades I guess. So, now people have a tendency to think about the ecological crisis in terms of the Anthropocene, right?

And clearly this language is useful for certain purposes, but it’s also incorrect. It’s incorrect in the sense that it’s not actually humans as such that are causing this crisis, but rather a global economic system capitalism that’s organized around the interest of powerful states, corporations and rich individuals.

And this is very clear in the empirical record. And this is something my work focuses on – just to give two key points here. The first is that the countries of the global north, by which I mean the US, Canada, Europe, Australia, New Zealand, Israel, Japan are responsible for 92% of all global emissions in excess of the safe planetary boundary.

So in other words, the emissions that are causing climate chaos. Meanwhile, the majority of global south countries are still well within their fair share of the planetary boundary. So, right off the bat, we have to recognize that what we’re facing in terms of the ecological crisis amounts to a process of colonization. Right.

And this is a term that scholars in the global south used for a long time, a process of atmospheric colonization, understanding the atmosphere, the commons which all of us depend on for survival. But a small faction of rich countries have basically appropriated it for their own enrichment, with severe consequences for all of life on earth. And then the same is true of resources.

And this is the second key piece of it. More than three quarters of excess resource use is due to consumption in high income countries. Right. On average, they consume about 28 material tons of stuff per person per year which is around four times over the sustainable boundary. So, if everyone on the planet was to consume like that, then we would need four planets to sustain us. Maybe you’ve heard this before. Again, this is empirically derived research here, and crucially, all of this is disproportionately harming poor countries.

We know that climate breakdown hurts the global south the hardest in terms of droughts, famines, mass displacements. Our media doesn’t cover that very much, but that’s the fact. Ninety-eight percent of climate related deaths happen in the global south, even though they haven’t contributed almost anything to the crisis. And the same is true of resource use.

Again, the majority of the material stuff that we consume in the global north is comprised of materials that are extracted from the global south. So basically, the benefits are captured in rich countries, but the ecological impacts of that extraction is effectively offshored to poorer countries. And this is clear if you just look at like beef consumption in the USA depends on deforestation in the Amazon.

The tech industry in Germany depends on mining in the Congo. The cosmetic industry in Britain depends on palm oil plantations in Indonesia and so on. Okay. So the key background point that I want to establish here is that the crisis is playing out along colonial lines and entails processes or colonization that we need to be cognizant of.

So against this background, we have degrowth. And the degrowth principle is very simple. Recognizing that rich countries are driving this crisis, it calls the rich countries to abandon growth as an objective and actively reduce excess resource and energy use in a safe, just and equitable way.

And that last dimension there, the safe, just and equitable principles are crucial because that’s what distinguishes degrowth from like a run of the mill recession. Right. So the idea here is to simultaneously scale down resource and energy use while at the same time improving people’s lives, improving social outcomes.

So what does this look like in practice? It’s actually very straightforward in terms of the principle. Right now, every economist on the planet virtually except for ecological economists assume that all sectors of the economy must grow all the time, regardless of whether or not we actually need them to and of course, in an era of ecological crisis, this is an insane thing to do.

So instead, we propose we should decide what sectors or industries or forms of production we actually want to expand – public transportation, renewable energy, public education – whatever it might be, things we need and what sectors are clearly destructive and should be actively scaled down.

And here I have in mind things like SUV production, private debt production, industrial beef, advertising, fast fashion, the military industrial complex, the practice of planned obsolescence whereby corporations design products to break down so as to increase turnover.

There are huge chunks of our economy in the global north that are irrelevant to human wellbeing and organized almost entirely around elite consumption and accumulation and corporate power. Okay. So we have to be able to distinguish what’s important about production versus what is damaging. And then from that principle, we recognize that as we scale down less necessary industries, clearly the economy needs less labor.

Now, under normal circumstances, that would mean unemployment, and this is basically why the conversation never happens. Right. But ecological economists propose that there’s a very simple fix for this, which is basically simply to shorten the working week and share necessary labor more evenly, thereby putting an end to unemployment.

And of course, the MMT principle of a public job guarantee can be a crucial tool towards this end to ensure everyone has access to the training necessary to participate in socially necessary, useful activities. Right. And then, of course, you distribute income more fairly, using policies like a minimum income and a maximum income, wealth taxes, living wage policies, et cetera.

And crucially, and this is a really key part of degrowth research, is you decommodify and expand public services. Okay. So not just health care and education, but public transportation, housing, energy, internet, all the basics for good living should be decommodified, those key goods to be decommodified so that everyone can access the goods they need to live well with a high standard of well being without needing ever increasing income in order to do so.

So this principle of decommodification is key to improving what I call the welfare purchasing power of income. Income in and of itself is not actually a good metric for well being. What matters is what the income can buy in terms of access to key provisions. And in a country like the USA where key provisions are all privatized and commodified and expensive, then basically, you have to have very high income to access those things, which is why half the country can’t access decent health care, can’t afford health care.

So you decommodify public services to improve the welfare purchasing power of income, which takes a lot of pressure off of the need for additional growth. So in sum, it’s basically simply a matter of reorganizing the economy around meeting human needs rather than around elite consumption and capital accumulation. So that’s kind of degrowth in a nutshell.

[00:11:44.720] – Grumbine

It’s interesting. I was just reading Lenin and the Imperialism, the final stage of capital, or I don’t remember the title of it offhand, but I was just reading how he was talking about how finance capital is destroying the world. He was saying this back in the 1900s.

Here we are today growth has got to be predicated on finance capital. This is where people are extracting surplus value from everything and everywhere in every country. And I think you said in one of your most recent writing, something to the effect of eight people have more wealth than 50% of the entire globe.

That’s absolutely insane. And there’s no way they earn that. That is 100% investment that’s financed that’s something other than earned income labor. It’s absolutely terrifying. You said something else, too, that I think is really important that I want to tap into. And that is that the GDP is an indiscriminate number. It doesn’t really say much of anything.

Basically the sum total of all financial transactions, if you will, but simultaneously looking at the real resource usage, they don’t seem to be tied together in sense of people are making money hand over fist without any kind of a hedge against the extractive nature of the resources they’re plundering.

I’m curious, how do we decouple GDP and get away from GDP so we can actually look at what the real impacts on the economy are? How in the world will we dislodge such a system? It seems quite a challenge, huh?

[00:13:28.790] – Hickel

Yeah. Okay. I mean, there’s so much in what you just used. I’m not sure where to start, but let’s see. So first of all, yeah, Lenin. I didn’t realize we’d be talking about Lenin today but.

[00:13:36.820] – Grumbine

Sorry.

[00:13:36.820] – Hickel

So, let’s think about this though. You know what’s interesting to me is when I engage in public conversations about these issues, it becomes clear that people’s assumption about capitalism is that basically it’s a system of markets and trade. And this is, of course, why it seems so natural, obvious, and why could you ever disagree with capitalism?

It’s just what humans obviously do. In reality, of course, this is not true. Markets and trade have been around for thousands of years, and were around for thousands of years before capitalism. Capitalism is a recent phenomenon in world history, only 500 years old and is fundamentally distinguished by well, on the one hand, crucially, it’s a system of enclosure and appropriation.

So by enclosure what I mean is the enclosure of commons and the commodification of the means of survival so as to create a desperate labor force, sort of a mass pool of exploitable labor. And then the second key thing about capitalism is that it’s the system that’s organized around and dependent on perpetual expansion. And it is the first and only economic system in all of history to be organized in that way.

And this is important to distinguish what we mean when we say capitalism so that we can have a conversation about what we’re actually dealing with here without assuming that this is just about markets and trade. No, you can have markets and trade without capitalism. And that’s exactly what we have to pursue to be able to talk about what capitalism is and what we might want to change about it.

That’s the one thing. So then about GDP. Look, GDP is a problem for all sorts of reasons. For ecological economists, the problem with GDP is that rising GDP is always just considered to be a good. I mean, this is taken for granted in economics. Virtually the entire discipline is organized around maximizing GDP on the assumption that GDP is automatically good.

And of course, this is also effectively the alibi of capitalism. Right? It’s gross. If capitalism is a system of appropriation of elite accumulation and enclosure, which quite often does significant harm to communities and ecosystems. How does it sustain its hegemony, its ideological hegemony? And the answer to that is the language of growth.

As long as what you’re doing leads to growth, everyone’s going to buy into it because growth sounds so good. It sounds so plants grow, humans grow. We all want growth. It’s the alibi of appropriation. And so what we have to recognize is that we have to break that ideology that growth is a proxy for human well being, which it very clearly is not.

We know, for example, that and this is the key thing to understand is that rich countries don’t need more growth in order to achieve improvements in human well being. Past a certain point which rich nations have long exceeded the relationship between growth and human well being completely breaks down, and other factors are much more relevant.

So take the USA, for example, the most advanced capitalist country on the planet where commodification has gone further than anywhere else. One of the richest countries in the world in terms of GDP per capita. And yet Spain beats the US in terms of social indicators across the board, including a life expectancy that is five years longer despite having 55% less income.

Portugal beats the US with 65% less. And these are not just two examples. There are dozens. Right? So it becomes clear what actually matters when it comes to welfare is not aggregate GDP growth, but rather effectively what are you producing that promote well-being? Are you producing tear gas or are you producing vaccines, right?

In GDP those things are considered equal by dollar amounts. Do people have access to useful things that you’re producing, such as health care, education or are those things commodified and how is income distributed, right? Do people ultimately have access to decent wages and livelihoods and access to public goods? Or do they not?

And the answer here is that in rich countries you don’t need more growth in order to do the latter to improve livelihoods, improve access to housing, education, health care, etc., etc. You can do it right now by reducing inequality and investing in public services and decomodifying them.

So that’s kind of the key principle here. We have to break that ideology that links growth with automatically good. And of course, look, the truth is, it’s actually quite annoying that we’re still having this conversation because this has been known about GDP for nearly a hundred years. Right? Simon Kuznets himself, who designed the measure, pointed out that this is a terrible way to measure social progress because GDP leaves so much out.

There’s so much value because it only counts commodities. So there’s so much value that gets left out – subsistence, commons, sharing, care, volunteering, nature. The value of public services is left out of GDP. Pretty much anything that doesn’t have a price is excluded, regardless of how fundamental it is to our civilization.

And then, on the other hand, it doesn’t count the social and ecological costs of commodity production. So you tear down a forest and sell the timber to Ikea. GDP goes up, doesn’t count the cost of losing that forest as habitat for species or a future resource for humans. If you privatize the UK Health Service, GDP goes up because you’re turning it into a commodity, but access to health care goes down.

And that’s not accounted for in GDP. We’re so far away from Kuznets’ warning, which was simply to say calls for more growth should always specify growth of what and for what purpose. And our economists and our politicians have lost touch with that reality. So it’s essential that we have a conversation about shifting away from this mindless machine of expansion.

[00:19:15.280] – Grumbine

A friend of mine named Phil Lawn, he’s an ecological economist down in Australia has been hyping the genuine progress indicator as a replacement for GDP for some time now. He seems like a lonely voice in the wilderness screaming out. Is there any progress for pushing a model that actually does represent things like what Steve Keen puts out with gauging energy use and soil consumption and the genuine progress indicator that Phil Lawn and guys like Steven Hail talk about? Where have you seen the trend going if anything?

[00:19:50.280] – Hickel

Yeah, the genuine progress indicator, GPI, super important intervention, and I think it’s gaining traction these days thanks to the efforts of your friends. So basically, for your listeners who don’t know GPI effectively, very simplified, starts with GDP and then adds things like values that are not counted by GDP and then subtract the costs in terms of social and ecological costs associated with commodity production.

So what you’re left with is an indicator that gives you a much more holistic view of what’s happening in the economy in terms of net improvements and net decline. And the idea is if politicians were maximizing something like GPI rather than GDP, then they’d be incentivized to try to improve social and ecological outcomes while reducing social and ecological bad. Right.

We would all agree this is a better approach to take, but the other alternative to GPI proposed by ecological economists is effectively a dashboard approach. So recognizing that one of the problems with GDP is the fact that it’s an aggregate indicator, and it’s difficult to solve that problem with another aggregate indicator. So there’s always a danger of fetishizing aggregate indicators.

[00:21:02.990] – Grumbine

Yes.

[00:21:02.990] – Hickel

And the weights within them are always contested. Right? And we need to be able to see that weighting and most people don’t have access to that, though. A better approach is maybe to establish what it is that you want your economy to achieve in terms of social and ecological goals. So let’s have a conversation about it.

The social goals we want to achieve are maybe full employment, better access to livelihoods, housing, education, health care, public transportation, renewable energy, etc. So focus on improving those with specific targets rather than just growing aggregate commodity production as a proxy and hoping that that will somehow magically solve your social problems and then also establish clearly your ecological goals.

And those ecological goals for rich countries must include clear caps on fossil fuel and resource use. You cap fossil fuel and resource use, and then you scale it down on an annual schedule until they’re back within sustainable levels by some target date, 2035, 2050, whatever it might be. So in some ways, I’m actually like, I love GPI.

Actually, I think it’s super useful, but in some ways, I would actually promote probably above that the sort of dashboard-oriented approach, which I think is a bit more accessible to people. And this way, when the news announces every day or every quarter or whatever it is what the results are of the economy, we’re actually talking about things like the level of biodiversity and the level of decent housing access and the level of renewable energy and the level of soil health, et cetera, et cetera, which I think it would help our conversation publicly so much because right now all of that is off the table and not being considered at all.

[00:22:44.180] – Grumbine

You know, it’s interesting. We talk about stock-flow consistent modeling and sectoral balances approach to understanding the economy itself. And I could see this rolling into something like that. You’re looking at domestic, public, rest of world or the import-export position, balance of trade, and something adding to that to make that even more valid. That is an accounting identity, but it’s also a measure if you understand where you are in your flows, you can understand where you need to apply deficit spending.

[00:23:17.660] – Hickel

Right.

[00:23:18.440] – Grumbine

In this case, these indicators. Every time I see an indicator when I understand the underlying formula that generates that indicator, it informs me of what I might need to do differently. So how might this dashboard approach inform policy activism? This is a bit expansive, but I think they’re tied hand in hand.

[00:23:40.200] – Hickel

Yeah, exactly. And look, I think actually MMT comes into this equation. I wanted to make sure to talk about MMT while I’m with you. So I’ve been thinking about like the synergies between MMT and degrowth, and I think this actually pertains to the dashboard question quite directly. So let me expand. So for degrowth basically, there are two main objectives.

One is an ecological objective, which is to reduce resource and energy throughput. And then the other is a social objective, which is to improve people’s access to the things they need to live well and ensure that’s secure. Right? So basically a social guarantee.

So MMT has done a really good job at pointing out that you can basically issue the currency if you have control over sovereign currency; issue a currency to fund a job guarantee and universal public services, thereby solving, in effect, the social question. Clearly, you can also use it to invest in renewable energy and regenerative agriculture right at the same time.

And that’s clear. Effectively, what you’re doing is you’re mobilizing domestic resources and energy around these key objectives. On the other hand, MMT talks about taxation as useful in as much as you can pull demand out of the economy when necessary to prevent inflation, to check inflation risk. Right?

What I think is overlooked here is that by the same token, you can use taxation to pull excess demand out of the economy to reduce resource and energy use, right, specifically among the rich. Constraining the resource and energy from the rich is essential to bringing our economies back into balance of the living world.

[00:25:11.460] – Grumbine

Can’t we just be the rich?

[00:25:14.680] – Hickel

So I think that the MMT proposal for how to think about taxation, i.e. not as a way of funding public activity, but rather as a way of pulling demand out of the economy can be applied to ecological economics as a tool for reducing excess resource and energy use.

And that, I think, is very promising. And so I think that when we have a dashboard in front of us of ecological and social goals we want to achieve MMT can be a tool to accomplish quite a lot of that. Of course, assuming you have a progressive government and the political will to do so.

[00:25:44.570] – Grumbine

And those are big deals. And I got to be honest with you, this is one of the things that snatches my soul from me. Each of these governments that creates their own unit of accountant and has control of their unit of accountant and has a margin of food sovereignty, energy sovereignty baked into their monetary sovereignty, they don’t really require money.

They’re not seeking money. They create money at will. So what they’re really seeking is resources, resource extraction, access to markets, which then indicates well the countries aren’t businesses, so what exactly is it that they’re clearing markets for?

I mean, the corporate class capturing our governments around the world, this neoliberal structure, this corporatist style of government, is taking capitalism to a whole new level. How do we decouple corporations from our government, take control back short of a ill-fated revolution that none of us are prepared for?

I hate to say it. There’s got to be some sort of mechanism because otherwise we’re coming up with all these great ideas, wonderful scenarios that could save us from extinction. So how do we get these governments to serve mankind instead of capital?

[00:27:05.260] – Hickel

Your observation about sovereign currency, I think, is so powerful. And this should strike anyone who has read the MMT literature is immediately the question becomes, if there’s no scarcity of money, then why do we have a scarcity of money? Right? And the answer, basically, it’s an artificial scarcity.

There’s a scarcity that is induced in our economy for the purposes of ensuring that you have control over labor and resources. Right. So basically, MMT proposals that you can pretty easily solve the social question. But governments don’t do that, because what would happen, then, is there would be no incentive for workers to sell themselves for cheap to corporations.

Like why would you work for McDonald’s flipping burgers for a few dollars an hour when you could have a living wage doing dignified, socially necessary work through a public job guarantee system that has democratic control of the workplace, et cetera, et cetera, participating the most important collective projects of our era?

You would not choose to work for McDonald’s. You would not. And so in order to maintain the supply of labor to corporations, there’s an artificial scarcity of money and provisioning that has to be induced. Right? The US government is a great example of this.

So one of the reasons why, even progressive governments like say the Biden administration, buy into support for corporations. The cadastre that you’re mentioning is because they believe that growth is good and so anything that delivers growth is something they pursue.

And if that means handing power to corporations and handing resources to corporations and ensuring a steady flow of cheap labor, etc., etc., then you do that. Only once progressive politics breaks from the obsession with growthism can we have a more rational conversation about how to run the economy.

And then what you do is you do what’s called for in the degrowth literature is you actively disaccumulate capital and you decommodify key parts of the economy and markets continue to operate but within those parameters, right?

So disaccumulation the decommodification and then caps on resource and energy use, these are the core principles. But right now the progressive movement is effectively not talking about this. So that has to change. I think that challenging the ideological hegemony of growth is the central step there.

[00:29:51.920] – Intermission

You are listening to Macro N Cheese, a podcast brought to you by Real Progressives, a non-profit organization dedicated to teaching the masses about MMT or Modern Monetary Theory. Please help our efforts and become a monthly donor at PayPal or Patreon, like and follow our pages on Facebook and YouTube, and follow us on Periscope, Twitter, and Instagram.

[00:30:17.070] – Grumbine

I’m going to say something that you may object to, but I want to say it clearly so that you hear where I’m coming from. I was a huge Bernie Sanders supporter, and he’s probably short of Henry Wallace, probably the most progressive we’ve ever had.

We haven’t really had a guy like a Bernie Sanders leading a left movement in the United States and around the world, Bernie wouldn’t look all that left. He’d look kind of normal. So when I hear Biden put up as a progressive, I can’t help but chuckle just a little bit, because Biden to me is a center-right neoliberal.

And I got to tell you, my listeners will hate me for saying this, but there’s been a few moments where I’ve had to tip my hat to Biden that I did not intend to tip my hat to. He’s done a lot of things that I’m not happy about from bombing families in Afghanistan, but that notwithstanding compared to his predecessor, he’s done a few things that make you go, “Wow! Maybe he’s listening to some people.”

But the tepid response to student loan forgiveness just an absolute albatross on older workers that had to go back to school to reinvent themselves after the last global crash that we had in ’08 and ’09. He has also not helped young kids out in any way in terms of their student debt. He threw $50 million of a $2 trillion albatross.

And he basically shat all over a Green New Deal. So there’s some things about Biden that you have to tip your hat to. I’ve never seen a Democrat less concerned about the deficit. Biden is obviously broken clearly away from Obama and definitely broken away from the Clintons, so, in that sense, he scores some major progressive points.

But I would say, though, that we need a lot better, and I’m afraid that we needed a lot quicker than we’re going to get it. I think you talked about the soil and its ability to sustain agriculture, maybe 60 years as it stands now, if we continue farming as we are. So there’s a lot of things that are happening really quickly. Life is coming at us fast, and we don’t have time for dinosaurs like the Biden administration that has not adopted these things full throatedly.

And we’re the ones that are the worst offenders. And yet we’re only providing tepid responses. So this kind of leads me to the more fundamental question that I raised when I talked to you about war and about the approach to not just colonizing the planet, but policing and extracting from the planet and the modus operandi of invading these countries for underlying resources.

And that’s both anecdotal, but I think there’s a lot of empirical evidence that would suggest that our military actions are less altruistic and more extractive and also more devastating to the environment and ecology as a whole. What would you say to that?

[00:33:08.180] – Hickel

Yes, there’s no question. I think that the most effective analysis of war and specifically the US and NATO war machine, I guess, is to point out that it is about strategic control over access to resource flows. Right.

And that is important because growth in the US and Western Europe, the global north, basically at large, depends heavily on net appropriation of resources, energy, and labor in the global south. Right. And this is not just the loony rantings of someone who’s talking about abstract neocolonialism. This is empirically demonstrated.

And I’d love to talk about this a little bit, actually.

[00:33:44.240] – Grumbine

Yeah.

[00:33:44.840] – Hickel

But first, let me rewind and just talk about the colonial period proper. We know from economic historians very clearly that growth in the north relied on forms of appropriation from the south. Think about the Industrial Revolution. The main commodity of the Industrial Revolution was cotton. Right.

Cotton of course not grown in England. Cotton grown on land appropriated from Indigenous Americans and grown by enslaved Africans but also relied on sugar grown in the same fashion, grain appropriated from India on a mass scale, timber appropriated from India, countless resources appropriate from colonial Africa, etc.

And all of this crucially, also with significant ecological consequences which are often not spoken about. Jason Moore’s work does a really good job in pointing to the fact that colonial forms of appropriation were devastating for local ecologies, including mass deforestation in the Americas. Now that economy remains more or less in place today.

Growth in the global north continues to rely on a large net appropriation of resources in the south, although now it’s facilitated not primarily through direct military occupation and colonial control, but rather through price inequalities in international trade and commodity supply chain right. Now, let me explain briefly what I’m after here.

[00:35:00.200] – Grumbine

Sure.

[00:35:00.200] – Hickel

In international trade when you have price inequalities. i.e., wages and resource prices in the south are lower than there in the north, what that means is for every unit of embodied labor and resources the south imports from the north, they have to export many more times to pay for it, which facilitates a net transfer from the south to north.

So now price inequalities are not natural. As Marx famously pointed out in the 19th century, they are induced through geopolitical power and commercial power. So in the colonial era, of course, you drive down wages by enclosing commons and dispossessing people, and destroying subsistence economies to create a mass of unemployed people.

Today it is through a variety of different mechanisms, the structural adjustment programs that were imposed across the global south by the World Bank and the IMF, which are controlled by the US government primarily, but the G-7 more generally, massively cut public sector employment. They cut labor standards. They cut environmental standards, etc., etc., in order to depress the cost of labor and resources and restore northern access to the cheap labor and raw materials they had enjoyed under the colonial period. Right?

And so price inequalities were induced by neoliberal structural adjustment programs in the ’80s and ’90s. Today, as a consequence of neoliberal globalization, global south countries are heavily dependent on foreign currency to finance debt and imports. Therefore they’re all competing to attract foreign investment.

Therefore, they’re in a global race to the bottom to deliver cheap labor and resources to multinational companies effectively as tribute. And these multinational companies also furthermore exercise extraordinary monopoly power. Firms from the global north control 97% of all patents in the global economy, which gives them tremendous power to depress the prices of suppliers who again are overwhelmingly in the south, where all of the labor and resources are mobilized.

Think of your iPhone, think of your laptop, think of your clothes, thus squeezing suppliers, pushing wages to below the cost of subsistence. Right. The result being, of course, mass poverty across the global south that is intractable. So all this induces price inequalities which sustain a flow of resources from south to north on a mass scale.

And let me just give you an idea for what the scale of this is. This comes from research from Christian Dorninger published earlier this year using input-output models. A net transfer of 10 billion tons of embodied raw materials that’s double the total mass of resources extracted from the contents of Africa per year. Net transferred from south to north. 800 million hectares of embodied lands, which is twice the size of India. Imagine land twice the size of India mobilized entirely around net transfers to the north of land-based goods.

[00:37:52.170] – Grumbine

Overwhelming.

[00:37:53.170] – Hickel

It’s overwhelming. 23 exajoules of embodied energy, which is five times more than Iran’s total annual production of oil. I mean a tremendous scale. So think about it. And this is where the ecological-economic arguments about thinking about resources in terms of use-value because of importance that quantity of land could provide nutritious food for four to six billion people, ending hunger forever.

[00:38:17.200] – Grumbine

Right.

[00:38:17.920] – Hickel

But instead it’s used to produce things like sugar for Coca-Cola and beef for McDonald’s consumed in the global north. That quantity of energy could provide electricity for 1.5 billion people, which is the entire population of the continent of Africa while powering infrastructure or public health care, education, transportation, internet for everybody.

But instead it’s appropriated to power SUVs in Europe, for example. Right. We learned in this global economy where the south’s vast resources and vast reserves of labor are being mobilized around servicing northern consumerism and growth when they could be used to meet local human needs.

And this is why I come to degrowth from the perspective of anti-imperialism, recognizing that we live in an imperialist world economy and degrowth as a demand for ending those patterns of net appropriation that sustains such high levels of excess consumption in rich nations, the ultimate demand being one of effectively convergence. Right?

Rich countries should reduce their resources to get back within sustainable levels, while poor countries should reclaim their resources, mobilizing them around meeting human needs with throughput converging globally at a level that’s consistent with universal welfare and ecological stability. That is the world we should be imagining and calling for. And that vision emerges clearly from this literature.

[00:39:46.420] – Grumbine

I want to throw you a bone here on this one. This is something I don’t think a lot of people talk about, but the epicenter of where all this race to the bottom mindset begins. I look in the United States directly as Rust Belts are created as sweetheart deals for tax bases are given in Texas to extract the company from Detroit and leaving them destitute and leaving all those people behind.

And this mindset of the states competing for business has generated the race to the bottom. There is no up. There is only down and the states are currency users. They have no ability to generate currency to be able to offset those shortages that are left behind. And so schools which are funded by the income taxes of zip codes, those schools become destitute.

We create this impoverished area once again, that has no hope unless the federal government steps in. On a global scale the exact same model. And this is why I brought up Lenin in the beginning was that I was having a flashback as to watching finance capital, capturing whatever territory it’s trying to capture.

And in this case, on the global scale, we got the haves in the north stealing from the have nots in the south and in the US. I can’t quantify this. So this is purely conjecture, but I’m guessing that the states that are the quote-unquote “net producers,” the ones that have the businesses internally in their state are like Germany, if you will, in the EU, whereas the ones that are not in that condition are like Greece.

And you can see this dynamic through sectoral balances. But I think this is why I come back to the dashboard idea that you had merging it with that sectoral balances approach, because if you realize there’s a deficit in the public space, you have a remedy.

You know, we need to deficit spend. Let’s see where and that’s where that dashboard would kick in and let us understand how to tune the EQ. But in this case, do you see any tie into what I stated there with the states and competing with one another and extracting those companies based on cutting the bottom out of taxes and ultimately drying up the public service and the public purpose in each of those states? I think it’s almost a one for one. I could be wrong. But I think I see that.

[00:42:12.620] – Hickel

I think you’re absolutely right. Ever since I encountered MMT, this has struck me as well about the US is that clearly there’s a crisis for the poor states that are not able to issue their own currency, which is a huge problem.

It means they’re reliant entirely on whatever federal funding they can achieve or GDP growth, and so which means attracting companies and cutting your taxes. This is a major issue. I feel so bad for anybody who’s in state governments because your hands are literally tied and that’s a disaster.

I don’t know what the solution is to this. I’d love to hear what MMT people think about that, but clearly I 100% affirm what you’re saying, which is that imperialism does not operate only on the world stage, although that’s its primary manifestation clearly within the US, there are clear Imperial dynamics, and we can see this very clearly when it comes to the resource frontiers in the US itself.

Look at the Indigenous struggle against the pipelines, right. There’s a militarized fight for access to resources that are effectively controlled by Indigenous communities and that’s to say nothing about their long-term appropriation over the past several hundred years.

So we have to recognize Imperial dynamics that continue to operate within the US today. It is, after all, a colonized territory and has not been decolonized and we have to call for that. What’s interesting in the MMT space is that there’s this movement among progressive economists in the global south, people like Fadhel Kaboub and Ndongo Samba Sylla, who have been pointing out that you can use MMT principles as a tool for decolonization, as a tool for reducing your dependence on foreign currency, by reducing your dependence on imports and so on. Right?

[00:43:55.760] – Grumbine

Yes.

[00:43:56.660] – Hickel

And that’s powerful. It’s interesting for me to think about MMT as a tool for anti-imperialist economic policy, but

[00:44:04.360] – Grumbine

Yes.

[00:44:04.360] – Hickel

The US States or US communities, to be more specific, don’t have that option, which is really unfortunate.

[00:44:12.480] – Grumbine

Ndongo and Fadhel are both friends of mine. I’ve interviewed Ndongo about the CFA franc and that whole approach to colonial Africa and decolonizing and talking about job guarantee in emerging countries and Fadhel is very close to our program.

You’ll frequently see him with a Real Progressive shirt on and he’s a core part of what we do here. And his approach to the global south and the Global Green New Deal. This is exactly why I’m trying to marry these things together. I see you as very much a part of our world, and I want to tie these adjacent minded schools.

When I think of MMT, I think of it as plumbing. It’s not really ideological at its core. So narrow MMT is accounting. It’s understanding banking the way it really flows. Once you can demystify and debunk all the false scarcity ideas about money, then you start what I call next leveling with the work that you’re doing and the work that Steve Keen is doing about various things that exceed that monetary thing, because ultimately, MMT purpose’s is to make money the least important thing to consider here.

It’s really all about resources. To take Jacques Fresco’s perspective on a resource-based economy, MMT takes that approach as well in terms of understanding. It’s really do we have an economy that can produce the real resources that we need for consumption? That really is the key indicator of what you’ve got versus money.

So from that standpoint, I want to take it one final step. And this is where I would like to close this out. The word degrowth, as we said in the beginning, is a bit of a shocker, just like MMT is horrific for marketing. Anytime you add theory to something, theory is a very scientific word, but it was also more of a blog post where somebody said, hey, maybe we call it MMT.

But degrowth has that same thing. You may as well said communism here. How do we take these principles and advance them? How do we market this? Because I am very sympathetic to socialism. I’m very sympathetic to communism, the writers and the struggles of the past Haiti and Russian revolution that speaks to my heart.

But clearly, even in the face of the calamity we’re facing, this hurricane that tore through the US here recently should be a light bulb moment for a lot of people. And the fires in the Pacific Northwest. How do we market this to where regular people are starting to use this as part of their common vernacular so they’re thinking this way because we can’t survive if we don’t get this right. We’re done.

[00:47:00.280] – Hickel

Yeah. So there’s a lot to think about here. First of all, the term degrowth, the idea of it, it’s a missile word. It immediately triggers a response. And the response illuminates the assumptions that people have about growth and how the economy should work, which creates space for a conversation. Now, quite often it’s a tense conversation. People are, like, resistant. But what’s interesting about it, and this is what happened to me with it is that if you’re reflective enough to be like, Whoa. Okay. My assumptions are being challenged here.

Let me investigate this further. Think about it more carefully, and then it can produce epiphanies. And I think that’s very useful. Intellectually, terms like this, similar to, say, using the term decolonization in, like, 1920. Most people in polite European Society are going to be like, “What are you talking about? That sounds crazy.”

But then it opens a space for you to say decolonization is crucial for an ethical society. Right? And that’s effectively the conversation that’s been provoked with degrowth. Now there’s a question here. Do you want that to be a public-facing term?

I’m not committed to that necessarily. People want to say they are eco-socialists, which I would consider myself, I think, basically. The principle of ecosocialism being design the economy such that it meets everyone’s needs at a high standard while at the same time operating within planetary boundaries. Right.

And also it should not be an imperialist economy. And then, of course, degrowth is simply what rich nations need to do to get to that vision, scale down excess resource and energy use, et cetera. So I don’t know if degrowth is like the isms. It’s like less the horizon and more of the path if you will.

But the question is raised, is ecosocialism any less of a triggering term for people in the US? I doubt that’s the case. And I would still like to retain the use of degrowth because it’s such a useful analytical tool and has been so well defined in the literature and so urgent as well in terms of the ecological crisis. I find it useful in that respect. But what’s important, of course, is the policies. We have to get the policies taken up regardless of what we’re calling them.

And I think that one way to approach that is to shift the conversation away from emissions as such, but rather to fossil fuels. And people understand that fossil fuels are causing climate breakdown. And so it should be rational, therefore, to cap fossil fuels and ratchet them down on an annual schedule until they’re at zero by, say, 2035m in the case of the US and the UK, et cetera.

Now you scale up renewable energy as fast as you can in the meantime. But with any energy gap that you have, the idea is you want to allocate energy in such a way that you prioritize people’s needs and well-being and essential services, etc.

And this is where degrowth social policies become so essential. We can establish universal access to the resources people need to live well and to good livelihoods with MMT policy with degrowth policy, et cetera. And that can all be packaged into a demand for declining fossil fuels, which sounds so reasonable.

But it’s remarkable that this is not a public-facing demand. The idea for capping and declining fossil fuels, and it needs to be we need to be rallying around that. You’ve heard Kerry talk about the US emissions plan.We’re going to cut emissions by half in ten years. How are you going to do that? And the answer I kid you not is with technology we don’t have yet.

That technology being fantasy is about carbon capture and storage that scientists routinely question the feasibility of and all of this is a method for getting away from the core question, which is the urgency of capping and declining fossil fuel use. So if we can frame the ecological question around that, then I think that we have a lot of traction and maybe that’s the way to approach it. But look, I’m open to suggestions here.

[00:50:52.400] – Grumbine

Well, one of the things that jumps out at me is Biden’s build back better approach and his focus now he’s almost going full Ronald Reagan, which should be terrifying to most lefties because he’s demonizing China and using a Cold War rhetoric to ramp up our innovation and compete with China.

A competition at that level is not going to generate degrowth. It’s going to generate growth and dirty growth and a lot of friction as well. China has a totally different model of approaching not only their economy but their relationships around the world.

But this is no less volatile. And I wonder, I think Biden is trying to appeal to Republicans. I think that we are in a collision course with state capital neoliberalism any number of public-private partnerships. We’re in a position now where getting rid of patent laws and shrinking copyright protection, basically creating a global common to help everyone grow.

We’re the opposite that we’re actually growing the other direction, building more protections and becoming more private. I don’t want to worship at the altar of Bill Gates or any of these other rich guys that are building phallic symbols to fly into space.

I want to really focus on reinventing, rediscovering the public purpose. And it seems like the train is leaving the station going that way. And you and I are over here talking about a train going this way that doesn’t exist yet, and we got to make it exist. And that terrifies me. Jason, this is one of the primary reasons why I had you on here and you have been absolutely amazing. Let me give you the final thought on that. And then we’ll close out with where we can find your work.

[00:52:45.320] – Hickel

Yeah. So the question of the US stance towards China is terrifying and also just absurd, given the fact that, look, the discourse on China, and this needn’t be read as a defense of China. Okay. We’re all aware of China’s problems, but China’s GDP per capita is 1/6th that of USA’s. And yet it’s being trumped up as this economic threat.

What does that mean? I mean, if you think about the significance of this, the US is basically saying global south countries are only allowed to develop up to a certain point, but they’re never allowed to achieve full sovereignty because that is a threat to our interests.

And that’s very troubling. That’s a very troubling claim, which I think reveals the core imperialism of US geopolitical strategy. And I think that we need to reject it every time because that’s extremely dangerous. You’re right. Things are moving in that direction. How do we get the train to move in the other direction? 

In terms of strategy, I think this is key. The environmentalist movements, which is presently the movement addressing the ecological crisis, is not going to succeed on that matter alone. And the reason is because they don’t have the political power to do so.

And there’s no clear way they will be able to attain that political power. So Extinction Rebellion and Fight For The Future, etcetera, they can do a great job at raising awareness and maybe even closing down streets, say in Central London or New York, but they don’t have the political power to establish the fundamental changes that we need.

What does have that political power is working-class formations. Now one of the problems we face is that the unions right now and this has been true for decades, tend to be resolutely growthist. Which is strange when you think that when you consider the job of unions is to be a counterweight to capital, unions are effectively aligning with the interest of capital for the sake of endless commodity expansion on the grounds that this is the only way to improve livelihoods and to improve people’s lives. Right.

So it’s essential that we’re organizing within working-class formations and alongside them in alliance with them to build an awareness of how the social problem can be solved in rich nations without additional growth. And again, MMT offers us the tools for doing that – public job guarantee, shorter working week, expanded public services, et cetera.

If we can establish the principle of a social guarantee, then I think we’re on strong footing to start having a conversation about actively scaling down destructive sectors of the economy because we no longer have to worry about the Boogieman of unemployment. Right? That artificial scarcity is now off the table.

And we can have a rational conversation about the economy. And so I guess this is simply to say alliances with working-class movements are essential. And I say this, recognizing that in the US they’re very weak. In Western Europe, they’re much stronger. And that gives some hope I think. There’s that and then the other thing I think is important here is alliances with global south movements against imperialism.

And that’s important because again, as I’ve been at pains to establish, the global economy is structured according to principles of imperialism. The ecological crisis is a symptom of imperialist forms of appropriation. The people that have the skin in the game here are the exploited countries of the world and the social movements there are very clear that the crisis of ecological breakdown was not primarily a crisis of technology but rather primarily a crisis of colonization and appropriation.

Read, for example, the people’s agreements of Cochabamba, signed in 2010 by thousands of social movements across the global south. This principle is clear. What we need to do in response is to align as much as possible with anti-imperialist social movements in the global south because anti-colonial struggle is the only struggle that has ever substantially changed the structure of the global economy, which happened in the mid 20th century before being reversed, of course, by neoliberal structural adjustments.

And there’s potential for that to happen again. And those are the alliances we need to create. And that’s important because right now in the global north, the discussion about progressive economics and ecological breakdown, etc. almost entirely excludes that dimension and certainly entirely excludes those kinds of alliances. It’s not an internationalist conversation in any true sense of the word. And so I think that is what we need to focus on establishing.

[00:57:04.140] – Grumbine

I think that is very well stated. So I have all your books, as I told you before, I have not read all of your books, but I own all of them because I want to read them. And with that in mind, why don’t you tell our audience where they can find your work and what you’re working on now?

[00:57:24.240] – Hickel

Okay, so “Less is More” and “The Divide” are both published by Penguin. You can buy them anywhere, but if you’re in the UK, then Hive is a good kind of ethical alternative to Amazon. I’m less certain about the US, but in the US, I know you can buy “Less is More” from Black Wells, which is a British company that ships for free to the US, and they send you a nice Oxford looking bookmark. Very cute.

My work is all freely available on my website, Jason Hickel.Org my published academic work and my essays and so on. And in terms of what I’m working on these days, increasingly working on further defining how imperialism works in the global economy and how it relates to ecological breakdown and what strategies are sort of feasible for us to pursue against that dual emergency. So keep an eye out for more coming down the pipeline in the next couple of months.

[00:58:19.480] – Grumbine

This has been absolutely amazing. And I say this because all of the guests I bring on here, I believe, are amazing, but this truly took me to a new place, and I’ve been super excited about this and you didn’t disappoint, my friend. I hope that we can do this again in the future.

I hope you found value in coming on here because I’d like to marry degrowth and MMT. I want the community that I work within and represent to really see this as an extension of all the work that they’re doing. I really find this to be a great marriage, and I hope you do, too.

[00:58:52.850] – Hickel

Yeah. Thanks so much for the conversation. It’s actually really enjoyable to talk to somebody who’s familiar with and has led actually on a lot of these spaces. So thank you. Yeah. It’s been really interesting for me.

[00:59:03.760] – Grumbine

Fantastic. Alright. With that, I’m Steve Grumbine with Jason Hickel, Macro N Cheese We’re out of here.

[00:59:32.420] – Ending Credits

Macro N Cheese is produced by Andy Kennedy, descriptive writing by Virginia Cotts, and promotional artwork by Mindy Donham.  Macro N Cheese is publicly funded by our Real Progressives Patreon account. If you would like to donate to Macro N Cheese, please visit patreon.com/realprogressives.