If Capitalism is no longer viable, then what comes next?
"Post-growth" is a worldview that sees society operating better with a market economy that is not beholden to the demand of constant economic growth.
It proposes that widespread economic justice, social well-being, and ecological regeneration are only possible when money inherently circulates through our economy.
To explore this topic, we were joined by Donnie Maclurcan, Executive Director of the Post-Growth Institute.
Post-Growth Economics Essentials:
Post-growth is about exploring a system that is not dependent on growth in the economy and the money supply
- It's an inquiry that asks how we can thrive within ecological limits, and within a system that is not dependent on a constant growth in money, debt, and economic growth
Market economies (trade, exchange) existed long before capitalism.
- Capitalism is often described as something synonymous with a market economy. It's not
- Capitalism is primarily a for-profit system driven by the underlying operating principle of monetary accumulation into private individual hands
- Approaches like conscious capitalism, B-corps, public benefit companies, ethical- or values-driven capitalism, and green capitalism still presume that money will accumulate on the basis of investment being returned for greater than the money being invested
In any capitalist system, liquid money (money that can be quickly accessed) accumulates into the accounts of wealthy individuals, occasionally governments, and certain corporations
In the accounting of our economy, when money accumulates in one place, the equivalent debt has to accumulate elsewhere
- There is much more debt than money in the economy because interest payments make the debt greater than the amount borrowed. The only way that debt can be reduced is to decrease the money supply
- For growth to continue, all that can happen with this debt is that it gets pushed around, and that creates an increasingly unequal economy. A small group of individuals and companies get to design how production and consumption are going to work
- A system where control and power are linked to monetary accumulation and debt puts extreme pressure on everyday survival. When money continues to accumulate at the top of the system, there's downward pressure on wages. Conversations like raising the minimum wage are not getting at the root issues
How does the money circulate back into the system?
- In capitalism, the accumulation is always stronger than circulation
- If it was the norm for all accumulated wealth to circulate back into social benefit, then it wouldn’t be capitalism. It would be a market economy that’s post-capitalist
Full-circle economies have the following characteristics:
- Circulation of natural resources
- Circulation of power
- Circulation of money
Not-for-profit businesses close the loop of monetary circulation
Rather than money accumulating into fewer private hands, not-for-profit businesses loop their profits back into the economy. Rather than money going into someone’s bank account, it comes back into the system. This is not the same as a non-profit, which may not have a business model. These are businesses that make a profit but do not extract that capital but rather circulate it
Some examples of not-for-profit businesses
- Bosch, IKEA, the Guardian Newspaper, Newman’s Own, and Rolex are each foundation-owned
- Businesses who are overseen by a trust where trustees without finanical incentives ensure governance in accordance with the purpose of the firm, such as Patagonia
- Consumer coops are businesses that belong to the people who use them
- REI is the largest consumer co-op in North America
- Credit unions are financial cooperatives owned by their members
- Cooperatives that are collectively owned by investors, employees, and suppliers can still have the accumulation problem
Nonprofits that have business models
- The Fred Hollows foundation generates revenue from intraocular lenses to replace cataract-filled lenses – their lens took the cost down from $350 to $7.50 as a part of their mission to end avoidable blindness
- Lester Salamon’s work at Johns Hopkins showed that around the world, most nonprofit organizations are in business with the goods and services that they run. Less than 20% of global nonprofit funding actually comes from philanthropy
- One of the world's biggest nonprofit organizations, BRAC, has over 80% of its funding from business activities like crafts stores, artificial insemination services, a bank, a printing press, a cheese company, etc
Starting positions for the Post-Growth Institute
One-planet lifestyle: a lifestyle that fits within our ecological boundaries that has well-being at its heart, people's needs met, and also addresses injustices
- All people can live one-planet lifestyles in ways that bring increased peace and prosperity from the personal to the global scale
- One-planet lifestyles acknowledge physical limits to economic growth on a planet with finite resources
- One-planet lifestyles acknowledge the pressures a growing human population, with highly inequitable patterns of production and consumption, place on a planet with finite physical resources.
- One-planet lifestyles also acknowledge that advances in technology do not mean we can keep growing indefinitely.