Austerity or stimulus? That is the question in the aftermath of the financial crisis – a question, however, that is past its expiry date.

Relaunching growth, be it through austerity or stimulus, may no longer be possible and is definitely not sustainable. The core question of our era is how to secure prosperity without growth. Don’t expect much, though, from the conservatives or social liberals who rule. For them, abandoning the growth fetish is unthinkable. But will Europe’s rising new left be different?

Spain’s Podemos, a political party of 30-somethings from universities and the occupied squares, recently released its economic programme. The draft document by Professors Navarro and Torres (pdf), does not call for prosperity without growth, but this may well be its outcome. Its aim, in fact, is to “stimulate consumption”.

Yet, unlike Keynes, this is not any consumption. It is the basic consumption of those in need. Higher taxes await capital and top incomes, wage differences within companies are capped, and a minimum income is guaranteed for those without work. If growth ends, securing a basic living for all out of the – still substantial – common wealth is vital. Without growth, redistribution is indispensable as otherwise wealth accumulates to those who already have more.

Prosperity requires what Naomi Klein calls the “selective degrowth” of dirty sectors and the flourishing of sustainable ones. Podemos’ programme calls for a moratorium on Spain’s notoriously corrupt mega-infrastructure projects and for a move to invest public funds in clean industries and renewable energy. It commits support to caring, education and co-operatives. Without growth, these sectors have an advantage: they do not require growing profits. The document seeks also to slow speculative capital and divert investments to small enterprises and the working classes with drastic banking reforms and a Tobin-like tax on financial transactions and short-hold stock exchange.

The authors recognise that care or education might not increase GDP now. They are confident, though, that they will increase broadly-defined economic activity in the long run. I am skeptical of the prospects for such weightless growth. But the proposals are good, independent of their effect on growth.



Yet if Podemos is to ignore GDP, as the report does, then it will need new prosperity metrics to evaluate its successes. And it should think more carefully about how it will maintain stability if economic activity refuses to increase.

Without growth and with work increasingly computerised and automated, workers become redundant. Correctly, the document proposes a 35-hour working week: in an economy that does not grow, more jobs can be created if each of us works less. The support of caring and education is also right: these “less productive” activities are employment-intensive while providing higher social value.

But Podemos is wrong to replace its commitment to a Basic Income with a minimum income guaranteed only for those who cannot find work. A Basic Income secures a dignified life for all. A citizens’ right, it removes the stigma of unemployment. It offers no disincentive against work as people receive it when they work too. But, unlike an unemployment benefit, you also get it if you want to work less, devoting more time to family, care, leisure, voluntary or political work. Studies show that a basic income of €400–€600 (£317–£475) per person is feasible in Spain without radical changes in taxes.

Without growth, debts cannot be paid. An economy cannot be forced to grow unnaturally to pay debts incurred to fuel a fictitious growth in the past; some debt has to be cancelled. Whose debt will be forgiven is a democratic question. Losses should fall upon speculators, not small savers. Podemos’ policy does call for civic deliberation to restructure and cancel Spain’s debt, household and public, but it is mute on the specifics.

Debt cancellation may relaunch unsustainable growth, as in Ecuador. Time liberated from work and a basic income could go on televisions, gadgets and weekend trips by plane. Instead, Navarro and Torres aspire to an “ecologically sustainable” consumption. Unfortunately it is not clear how or why this will be the outcome of their proposals.

What will Podemos do if unsustainable growth recovers despite its intentions? Here Podemos should go further. First, it should set clear ecological limits, like caps on the carbon emitted and the raw materials used by Spain, including those embedded in imported consumer goods.

Second, it should curtail advertising, banning it from public spaces, like the recent decision made by the city of Grenoble. Finally, to incentivise sustainable consumption, taxes should gradually shift from labour to resource use in ways that benefit those with lower incomes and consumption. A carbon tax could be linked to the financing of a Basic Income.

Without growth, public revenues also stall. Podemos’ economic policy document may commit to an efficient public sector, but other than the goodwill of uncorrupted newcomers, it offers no alternative to cuts, privatisation and outsourcing. An opportunity is missed here to link to Spain’s flourishing co-operative economy, where groups organise affordable solutions for health, education, food, housing, or care themselves. These solutions could lower the costs of the welfare state and help reform it.

All in all, Podemos’ policy takes us in the right direction. However, it could – and should – go further.

Giorgos Kallis is professor of ecological economics at Barcelona and editor of a new book Degrowth: A vocabulary for a new era.



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