Tag: economic growth

GDP

by Doug Banks

What is GDP?

Gross Domestic Product, or GDP, measures economic activity. Technically speaking, it equals the sum of all goods and services produced within an economy over a certain period. To oversimplify it, we could think of GDP as the sum total of all the price tags within a country’s borders. Metaphorically speaking, GDP is the only universally-recognised heart-rate monitor for determining the health of capitalist economies. Capitalism operates on economic growth, and GDP measures growth. 

Because of this, GDP has become the most influential political and economic metric in the modern world. Governments, corporations and institutions use it to direct resources, frame discussions, and inform crucial decision-making. 

And ever since GDP became our universal stand-in for social progress, it has had the effect of reshaping entire societies in its own image—which is problematic, as GDP is a very sexist, western-centric, careless, ecologically-destructive, and altogether bad image.

Where did GDP come from?

Before the 1930s, to paraphrase the sociologist Daniel Hirschman, the economy as we currently know it ‘did not exist.’ But that’s not to say that our ancestors didn’t act economically. People have been making, buying, and trading things basically forever. But it was only in the decade before World War II that our current understanding of the economy—as something that can be examined, diagnosed, prescribed and intervened upon—was conceived.

It was only in the decade before World War II that our current understanding of the economy—as something that can be examined, diagnosed, prescribed and intervened upon—was conceived

Gross National Product, the precursor to GDP, was invented by the economist Simon Kuznets to help the U.S. recover from The Great Depression. His logic was simple: their economy was obviously broken, but before they could fix it they needed to figure out how to measure it. GNP became the first widely-adopted method of measuring an economy, until the U.S. replaced it with GDP in 1988. (GNP measured all economic activity by a country’s citizens, regardless of where they were in the world. GDP measures all economic activity within a country’s borders, regardless of the nationalities of the people involved.)

How did GDP become important?

In 1944, as World War II was winding down, the leaders of the Allied Nations met in Bretton Woods, New Hampshire, to decide how the world would be rebuilt. They set in motion a few things that would change the course of history forever. First, they cemented GNP (and then GDP) growth as their standard tool for measuring economic progress and development. 

Then, to help reinforce this emerging world order, they established intergovernmental institutions such as the International Monetary Fund (IMF) and the World Bank, and later the Organization for Economic Co-operation and Development (OECD) and the World Trade Organization (WTO). Promoted as the flag-bearers of international development, many of the programmes these institutions have overseen dismantled national sovereignty in the Global South to install Western-friendly and GDP-centric policies. 

Capitalism, by definition, must expand. For half a millennium private firms and individuals have been finding new ways to grow their wealth. But it’s only since the Bretton Woods Conference that pursuing a single, standardised metric of economic growth has become the primary public objective of almost all of the world’s most influential governments and institutions. From that moment onward, we have lived in a world religiously devoted to the pursuit of GDP growth—often at the expense of everything else.

Why is GDP a problem?

GDP was designed to measure an economy getting ready for war, but now it’s used to measure social progress in general. This mutation was already obvious during the Cold War, when GDP became the ideological benchmark for comparing the relative success of capitalism and state socialism. 

Today it’s no different. If a country grows its GDP faster than others, they can claim they’re ‘winning’ at the game of international development, and it’s implied that this will automatically improve the quality of life of its citizens. 

GDP serves as a ‘scorecard’ for political success, which means policymakers will generally favour and implement the policies that will increase it

GDP serves as a ‘scorecard’ for political success, which means policymakers will generally favour and implement the policies that will increase it. As time passes, societies transform to resemble GDP—which is a problem, because GDP resembles a very sexist, western-centric, careless, ecologically-destructive, and altogether bad way for a society to be structured. 

Sexist. By only counting activities that have a price tag, GDP completely ignores all manner of unpaid labour—like having and raising children, elderly care, housekeeping, etc.—that is traditionally undertaken by women. In this way, GDP has a sexist bias implying, mistakenly, that these essential services are less ‘productive’ than what is traditionally men’s work, and should therefore be less respected. 

Western-centric. GDP is, and always has been, rooted in the deeply colonial notion that Western nations have it all figured out, and everyone else would be much better off if they just followed in their footsteps. More often than not, they haven’t been given a choice. 

For example, during the debt crisis of the 1980s, many nations of the Global South were struggling to repay mounting debts to Western banks. In response, the IMF and World Bank forcibly imposed ‘structural adjustment programmes’ on their economies. In short, this meant their governments had no choice but to cut social spending, privatise public assets, dissolve labour and environmental protections, and focus single-mindedly on increasing GDP to repay their creditors in the Global North.

Careless. The rules of a game dictate how its players behave. If GDP is our social ‘scorecard,’ then the ways it measures success will, on an aggregate scale, have an effect on how people and organisations behave. Any brief examination of the activities that GDP registers as ‘good’ for an economy reveal it to be highly problematic and careless toward human wellbeing. As the Dutch historian Rutger Bregman noted, ‘If you were the GDP, your ideal citizen would be a compulsive gambler with cancer who’s going through a drawn-out divorce that he copes with by popping fistfuls of Prozac and going berserk on Black Friday.’

Ecologically-destructive. GDP has always been inseparable from resource consumption, emissions, and environmental degradation. Proponents of ‘green’ GDP growth maintain that with enough engineering, innovation and entrepreneurial flair, we’ll soon be able to ‘decouple’ economic growth from environmental pressures and keep growing happily forever. 

However, as seductive as it is, there’s a problem with decoupling: it has barely any empirical grounding in current or projected technologies. On concluding a series of highly optimistic decoupling models in 2016, the Australian scientist James Ward remarked that ‘growth in GDP ultimately cannot be decoupled from growth in material and energy use,’ and that it is ‘misleading to develop growth-oriented policy around the expectation that decoupling is possible.’

Altogether bad. Despite all of the above, one must assume that maximising GDP growth is, overall, necessary to produce good outcomes for people—otherwise why would governments pursue it so furiously? However, there is a strong scientific consensus that this simply not the case. 

According to the economic anthropologist Jason Hickel, ‘there are many countries that manage to achieve strikingly high levels of human welfare with relatively little GDP per capita.’ What’s more, research has found that above a certain level—a level which all nations in the Global North have long since passed—increasing GDP can actually cause human well-being to decrease.

Mounting evidence suggests that there is no automatic relationship between rising GDP and rising welfare. When it comes to improving citizens’ quality of life, the most important factor is not pursuing the maximum levels of GDP growth or wealth, but instead implementing policies that more justly distribute the benefits of new and existing wealth.

What alternatives exist?

GDP’s most enthusiastic critics typically fall into one of two broad categories (or both): those pushing to replace GDP as our metric for growth and progress in particular, and those advocating to abandon economic growth as humanity’s central goal altogether. 

For almost as long as it has existed, some economists have argued that GDP cannot, and should not, be used as a proxy for human progress. They’ve been mostly ignored. But as focus this century sharpens on social and ecological issues, mainstream appetites are increasing for ‘Beyond GDP’ alternatives such as the Better Life Index or Genuine Progress Indicator. Recently, in rapid succession, the governments of New Zealand, Scotland, and Iceland—all led by women—committed to exchange well-being for GDP as their main policy objective. 

While most agree that moving beyond GDP is essential, some economists, researchers, and activists believe it’s only the beginning of the change we need if we want to avert full-blown climate catastrophe and create a more egalitarian society. Because ‘green growth’ is empirically unrealistic—a fantasy, some would call it—many maintain that we should begin transitioning toward an economy capable of thriving without needing any more economic growth at all.

This philosophy takes form under the banner of ‘degrowth,’ a constellated, rapidly-growing movement advocating for the reduction of humanity’s overall resource and energy consumption, as well as the redistribution of income and resources. ‘In short,’ the organiser and activist Jamie Tyberg writes, ‘degrowth tells us to care for the earth’s systems, to care for the people, and to redistribute any surpluses back to the land and the people,’ with the ultimate goal of ending ‘capitalism-colonialism on a global level.’

Rethinking progress

In the span of less than a century, our search for social progress has been all but completely outsourced to an abstract measurement of ‘the economy’—which is itself a relatively recent abstraction of life itself. Leaning on metrics and abstractions isn’t necessarily a bad thing. Coordinating complex, interconnected societies would be unthinkable without them. But it becomes an issue when ever-expanding domains of human activity become folded into the pursuit of a problematic and inhumane conception of life. 

Perhaps it’s time to stop trying to sculpt our societies into an image of the economy from a bygone era. Maybe we should rethink our metrics, measurements, and very meanings of progress, and start reorganising our economies in ways that celebrate human and non-human nature, rather than constrict it. 



Further resources

Clifford Cobb, Ted Halstead, and Jonathan Rowe, ‘If the GDP is Up, Why is America Down?’ The Atlantic (October 1995).
Although it’s pretty dated, this 1995 Atlantic article is still a great introductory critique of GDP. 

Daniel Abramson Hirschmanm, Inventing the Economy Or: How We Learned to Stop Worrying and Love the GDP (PhD diss., University of Michigan, 2016).
A deeper exploration into the conception of our modern-day fetishism for GDP and the economy-at-large. Go here if you’re interested in how a vague idea became a world-swallowing reality. 

Maristella Svampa, Development in Latin America: Toward a New Future (Nova Scotia: Fernwood, 2019).
A thorough account of how contemporary narratives of economic development via GDP have enabled countries in the Global North to extract land, resources, and cheap labour from Latin America.

Arturo Escobar, Federico Demaria, Ashish Kothari, Ariel Salleh, and Alberto Acosta, Pluriverse: A Post-Development Dictionary (New Delhi: Tulika Books, 2019).
A beautiful compilation of cultural visions, life philosophies and alternatives to GDP-centric development from across the globe that growth-based economics has either repressed or actively oppressed. 

Jason Hickel, Less Is More: How Degrowth Will Save The World (London: Penguin Random House, 2020).
An accessible introduction to degrowth, with some really useful sections on the past and present of GDP growthism and how it incentivises human exploitation and ecological devastation on a mass scale.



Doug Banks is an Australian researcher, strategist, and writer exploring language, economics, culture, and the places they intersect. He is currently head of research & narrative at ArtRebels, a Copenhagen-based collective of cultural researchers and designers.

Degrowth

Photo: Flickr.

by François Schneider and Joanna Pope

Degrowth is a movement that explores another direction for society, one where ecological and social justice become possible, along with more meaningful lives. While there is no single definition for degrowth, this entry attempts to offer some guidance for understanding degrowth in all its diversity.

First, degrowth is a variety of challenges to the current status quo. Secondly, degrowth is not just a form of critique, but also encompasses diverse and interrelated positive utopian visions for the world. Thirdly, degrowth offers a set of paths for societal transformation in order to make these utopias possible.

1. From a missile word to other narratives: Degrowth as objection

Degrowth is a rigorous objection to dominant ideas about how economies and societies function. In this line, degrowth has been described as a ‘missile word’. Degrowth targets in particular two beliefs.

First, degrowth challenges the idea that economic growth is the only way to achieve prosperity and wellbeing for all. Growth does not improve our lives. Instead, the pursuit of infinite economic growth on a finite planet has led to both vast social inequality and ecological destruction. Degrowth also rejects claims (for which there is no empirical evidence or theoretical justification) that we would be able continue to pursue infinite economic growth without accelerating the global ecological crisis.

Degrowth is not a passive critique, but an active project of hope, with vivid utopian visions of another, better world with equality, decolonization, reparations and social justice as its foundation

Secondly, degrowth challenges the pessimistic belief that ecological collapse is inevitable, that all we can do now in response to the global climate crisis (and many other crises) is to close our communities and borders to those in need. As we will see in the next section, degrowth is not a passive critique, but an active project of hope, with vivid utopian visions of another, better world with equality, decolonization, reparations and social justice as its foundation.

The idea of degrowth as a missile word, a stone thrown, helps us grasp the radical intent of those who use it as a slogan. But degrowth is not a singular missile. Rather, it has transformed, after nearly twenty years of discussion and activism, into an entire web of guerilla narratives. These degrowth counter-narratives challenge the ideology of economic growth from a range of different perspectives, from political economy, sociology and happiness studies, to ecofeminism, social ecology and post-development theory.

2. Other worlds are possible: Degrowth as utopia(s)

Degrowth goes beyond a mere critique of the current system. It also offers genuine alternatives through theory and practice. Degrowth is not afraid to envision a utopian future for our world. The degrowth society is just, ecological, sustainable, democratic, participatory, internationalist and localized with rich cultural, ethnic and ecological diversity in each locality, and simultaneously open and global.

Like its web of counternarratives, degrowth utopias are not determined by doctrine or set in stone. They are multiple, flexible and continuously redefined based on new insights, critique and dialogue.

Who are the people who help imagine and invent degrowth utopias? Degrowth’s utopian vision has been supported by scholars and researchers from around the world. Together, their work amounts to hundreds of peer-reviewed publications, numerous special issues, and a wide range of academic and accessible books on the subject.

But it was activists and practitioners who first brought the degrowth movement into existence. For degrowth practitioners, utopias do not exist only as long term visions, but also take shape as microcosms in the here and now. The creators and inhabitants of degrowth nowtopias seek to live in the society that they believe should exist, and demonstrate that other worlds are possible. Examples of nowtopias include community gardens, cooperatives, open source technology projects, repair cafes, mutual aid networks and more. Each year, conferences in cities around the world bring degrowth theory and practice together, as participants from different fields and backgrounds debate current challenges and future visions for the movement.

There is a tendency to think that these degrowthers are a small minority. But in fact, they are in good company. The political movement of degrowth emerged in France in the early 2000s but degrowth sources like voluntary simplicity have wide and old recognition. We find traces of degrowth in the philosophies of Lao Tse, Diogenes and Epicurus, for example. On the contrary the idea of economic growth was put forward with the rise of capitalism which is relatively recent. In spite of the incredible media/political push of this idea of growth, the idea of degrowth is becoming the favored emerging utopia these days.

Many different Indigenous cultures offer practices, philosophies and ways of life that resonate with degrowth and its long term vision. Degrowthers can also look to resistance movements in the Global North and South, from MOVE to the Zapatistas for insight and inspiration as they imagine a radically different world. Beyond this, there is a wide range of social movements whose practical and theoretical knowledge, and critiques of degrowth, can help utopian degrowthers expand their own understanding of what is possible.

3. Degrowth of some things, expansion of others: Degrowth as paths of socio-ecological transformation

How can we make degrowth utopias a reality, and strengthen and expand existing degrowth nowtopias? To address this challenge, degrowth articulates practical and diverse roadmaps to a better world. It is in this way that the word ‘degrowth’ takes on a third meaning—degrowth as paths of transformation.

Rather than presenting a silver bullet solution, degrowth proposes a web of change across housing, urban planning, transport, agriculture, energy systems, money, redistributive taxation, biodiversity, supply chains, manufacturing, software, hardware and technology governance, employment and working conditions,welfare, healthcare, education, democracy and more. Together, these proposals can guide an equitable, planned downscaling of production and consumption.

But these paths do not demand that we downscale everything. Rather, the task is to shrink some sectors, while simultaneously expanding and transforming others for the better, while the sum is a move to the reduction of material and energy flow and to simpler and more meaningful lives. Degrowing aviation, for example, means reducing unnecessary flying while also making travelling by train, bike, sailboat and on foot more accessible. Similarly, advocates of housing for degrowth or degrowing tourism, propose not only doing less but also doing things differently, that is, not only reducing ecologically and socially harmful practices and models, but also fostering and expanding existing alternatives that center both the environment and human needs.

Instead of the rebound effect that accompanies attempts at eco-innovation under the growth paradigm, degrowth pathways promote debound, creating an interlinked web of technical and non-technical solutions that fulfill human needs.

These pathways also contribute to a decolonization of imaginaries—by challenging commodification, consumerism, the pursuit of profit, the Western model of development and the destructive, growth-dependent system of capitalism itself. In this way, degrowth seeks to bring about not just material and political change, but cultural change too, allowing us to understand the world, ourselves and our desires through an entirely different lens.

4. Linking diversity: Fulfilment of needs and non-violence at the core of degrowth?

Degrowth thrives on diversity, embracing a wide range of different perspectives. These diverse perspectives are actually about fulfilling diverse profound needs, material ones like food or shelter for all but also many non-material needs. Degrowth is thus a proposition to meet these multiple concomitant needs by creating the conditions for a society where cooperation becomes possible, where sources of violence dwindle. To do so involves a fundamentally non-violent approach, on the one hand through cooperative approaches within the movements for social transformation but also conflicting ones as it involves non-violent civil disobedience in the face of a highly unequal society destroying, among others, natural resources, cultures, and biomes. Responding to deep needs, whether we are talking about material needs, or needs for well-being, community, recognition outside the growth dogma requires dialogue and listening to emotions and feelings. Degrowth is thus a vast collective project in which we empathize with the deep needs of everyone. To this end we need highly democratic processes to give voice to what is not expressed in order to build degrowth narratives: narratives which make us realize that meeting the needs of all is part of the realm of what is possible.

Further resources

François Schneider, Giorgos Kallis, Joan Martinez-Alier, 2010. Crisis or opportunity? Economic degrowth for social equity and ecological sustainability. Introduction to this special issue. Journal of Cleaner Production, 18(6), 511-518
An introduction to degrowth.

Giacomo D’Alisa, Federico Demaria, Giorgos Kallis. Degrowth: A vocabulary for a new era. Routledge, 2015.
A great collection of many topics relating to degrowth, challenging the status quo.

Federico Demaria, François Schneider, Filka Sekulova, Joan Martinez-Alier. What is Degrowth? From an Activist Slogan to a Social Movement, Environmental values, 22(2):191-215. 2013
A good overview of sources and actors of degrowth – degrowth as a frame.

Anitra Nelson & François Schneider, Housing for degrowth, Routledge, 2019.
The introduction of “spiralling narratives” for degrowth in the area of housing.

Chris Carlsson, Nowtopia, AK Press: 2008
A great review of the idea of living our utopias now.

Serge Latouche. Farewell to Growth. Cambridge: Polity Press, 2007.
Where Latouche develops the notion of degrowth society.

François Schneider. Let’s degrow up and grow down!
Why degrowth is the right word to use, and why meaning “degrowth” by saying “growth” is inappropriate.

François Schneider is a Doctor in industrial ecology and a degrowth researcher since 2001. Founder and former president of Research & Degrowth, and initiator and main organiser of the first international degrowth conferences, he teaches degrowth at the Autonomous University of Barcelona. In 2012 he started the experiential project Can Decreix, the “house of degrowth”. His work on degrowth focuses on the themes of material flows, allocation problems, rebound effect, transport, housing, lifestyles, frugal innovation, open-localism and identification of pathways.

Joanna Pope is a researcher with a focus on degrowth and ecocritical theory. She is based at Trust, an incubator for platform design and utopian conspiracy in Berlin, and works as an editor and researcher at The Syllabus and is a contributing editor for Uneven Earth.

Extractivism

by Diana Vela Almeida

La versión en español de este artículo está disponible aquí.

One could simply define extractivism as a productive process where natural resources are removed from the land or the underground and then put up for sale as commodities on the global market. But defining extractivism is not really this easy. Extractivism is related to existing geopolitical, economic and social relations produced throughout history. It is an economic model of development that transnational companies and states practice worldwide and that can be traced back more than 500 years all the way to the European colonial expansion. You can’t tell the history of the colonies without talking about the looting of minerals, metals, and other high-value resources in Latin America, Africa, and Asia—looting that first nourished demands for development from the European crowns and later from the United States, and more recently also from China.

Today this model of accumulation of wealth remains a key part of the structure of a globally dominant capitalistic system—a system where power is in the hands of those who control money and industry—that has extended the extractive frontier to the detriment of other forms of land and resource uses. Such exploitation has also appropriated human bodies in the form of slaves or, more recently, as labor-intensive precarious workers. Extractivism is entirely tied up with exploitation of people.

Today’s extractive industries such as gas, oil, and mining have an egregious reputation of violating human and environmental rights and supporting highly controversial political and economic reforms in poor countries.

Expanding the global frontiers of extraction

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased. Most non-industrialized countries (but also industrialized countries such as Norway, Canada, and the US) have activated their primary sectors of production to exploit landscapes that were previously inaccessible, such as in the case of fracking and tar sands extraction in the Artic or in the open sea.

Since the mid-20th century, extractive frontiers have expanded around the planet as global demand for commodities has increased

The central idea behind such state-sanctioned extractivism is that extractive projects are strategic ventures for national development in resource-rich countries that can thereby strengthen their comparative economic advantages—that is, their economic power relative to the economic power of other nations. In other words, poor nations can exploit their natural resources as a means for economic growth, a source of employment, and ultimately a tool for poverty reduction.

This idea has been ingrained for many years in developing countries, and yet these countries have historically been unable to convert resource wealth into so-called development. Indeed, in some places that are rich in natural resources—typically in African countries with large oil or mineral deposits—there is an inverse relationship between poverty reduction and economic performance. This means that a lot of extractive activity is coupled with high levels of poverty, economic dependency on capital flows from developed countries, and political instability. This phenomenon is known as the “resource curse.”

In the last 20 years, several governments in Latin America, Africa, and Asia have challenged the “resource curse” by asserting national control over new forms of primary-production extractive industries. These are oriented around intensive and large-scale projects that cover previously inconceivable environments (again, like off-shore mining or fracking), as well as new forms of economic exploitation such as the agroindustry, fisheries, timber extraction, tourism, animal husbandry, and energy megaprojects.

These endeavours require national policy reforms. In Asia and Africa, extractivist national policies adhere to what is called “resource nationalism” and include the total or partial nationalization of extractive industries, renegotiation of contracts with foreign investment, increased public shareholding, new or higher taxation to expand resource rent, and value-added processing of resources.

In Latin America, the commodity boom at the beginning of the 2000s, marked by the increase in commodity prices together with transnational investments, led to great economic growth in what is called “neoextractivism”. Neoextractivism is a relative of resource nationalism and its emergence coincided with the rise to power of several progressive governments in the region that also seized more state control over natural resources within their national boundaries.

Advocates of neoextractivism claimed that new extractive practices would be “environmentally friendly” and “socially responsible”, thereby minimizing the disastrous impacts of extractivism as it was practiced throughout colonial and neoliberal history. Despite this, extractive industries have expanded and continue to expand in new frontiers with the negative effects of dispossessing people from their land, subjugating communal values to the values of extraction-driven development, and disrupting social structures, territories, and alternative forms of life.

In the debate over extractivism, there is no consensus about how to solve the problems caused by this mode of development. Some people think that extractivism should be viewed positively because of the economic growth and increased public spending that was accomplished during the early 2000s in Latin America. Others emphasise that most of the wealth produced is siphoned out of the producer countries to transnational investors, while negative impacts remain locally or regionally. And from the perspective of those who are directly affected by extractive industries, it is clear that economic revenues are not translated into socially just well-being and that these revenues are generated through the destruction of their lives and their land.

Not a neutral economic model

To further understand the complexity of the problem with extractivism, let us look at three interrelated dimensions of what makes up the extractivist economic model—and then consider how to go beyond the economic considerations of extractivism.

First, for extractivism to work, any biophysical “nature” becomes exclusively framed as a natural resource. That is, nature is conceived as an input (e.g. a resource like oil, soil, or trees) for the production of a commodity (e.g. gas, food, or timber). This simplifies the multiplicity of socionature relations with which such an economic model is entangled.  

When thinking about the environmental impacts of extraction, we surely need to consider what will happen to other elements in nature that are interconnected with the extracted resource, including water, air, soil, plants, and human and non-human animals. A cascading effect of environmental change indeed often occurs in ecosystems that are impacted by extraction, and thus interrelated elements of nature become irreversibly altered.

Second, extractive projects are normally located in or close to marginal, poor, and racialized (i.e. conceived as non-white) populations. Extractivism arrives with promises of improved life conditions, more jobs, and infrastructure development. But large-scale extractive industries are by no means necessarily interested in forwarding local employment and improving the livelihood of people. Instead, experience tells us that they often serve to diminish alternative economic activities and disrupt existing community networks and social structures. Extractive industries have frequently dispossessed people of land rights with the result of cultural disruption and violence.

Demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit

Marginal populations still bear the brunt of the social costs of extractivism and don’t necessarily reap any benefits. In response to this, demands for social and environmental justice revolve around claims that the social and environmental costs of extractivism are higher than any economic benefit but that these costs are not accounted for in the decisions.

New demands from feminist movements and women Indigenous defenders highlight the relation between extractivism and patriarchal and racial violence and how this disproportionately impacts women. Examples are the increase in prostitution and sexual violence in communities restructured by extractivism and the externalization the social costs—the transfer of responsibilities for caring that are pivotal for the functioning of any economy—to women. As women are primarily responsible for the reproduction of life, they are highly vulnerable to the rupture of community or loss of territory. Because of that, women organizations have become the frontline defenders of their territories in the resistance against extractivism.

Finally, extractivism is a highly political endeavour that maintains a model of capital accumulation and destruction. It has led to the increase of socio-environmental conflicts around the globe, involving measures by states and industry to control resistance and criminalize social protest.

So, in sum, one should define extractivism as far from neutral or apolitical; it is an economic model that reflects a specific political position that relies on a given, predefined understanding of growth-oriented development as the ultimate good. Extractivism thereby reinforces political-economic arrangements that are biased against marginalized people who are deprived of their power to influence political decisions.

From an extractivist political perspective, resistance against extractivism is naïve, obstinate NIMBYism (Not in My Backyard-ism), or ignorant of the economic needs of the countries that could be “developed” by extractive projects. In reality, actions of resistance are contestations that challenge the dominant extractivist worldview and the uneven power relations between actors who decide, actors who benefit, and actors who bear the negative consequences of extraction. Under these conditions, extractivism is in complete contradiction to social and environmental justice and care for nature and life itself.

All in all, extractivism as a single model of production remains one of the most expansionist global enterprises and it squashes any other ways of living with the land. The 500 years’ legacy of extractivism is part of ongoing imperialist interest from industrial powers in securing access and control over natural resources around the globe, even in today´s green energy transitions. As such, extractivism stands in sharp contrast to flourishing alternative forms of land use and livelihoods.

Opposition to extractivism does not mean that people can’t use a resource at all and by no means implies a binary choice between either extractivism or underdevelopment. Instead, anti-extractivism is about focusing on what type of life we want to achieve as a whole and how we build global systems of justice. We can nourish ourselves from several non-extractivist modes of production and reproduction that center on a dignified life for all.  

Further resources

Bond, P. (2017). Uneven development and resource extractivism in Africa. In Routledge Handbook of Ecological Economics (pp. 404-413). Routledge.
This article explains the expansion of neoliberal environmentalism in the extraction of non-renewable natural resources in Africa. The author argues that if accounting the social and environmental costs, African countries end up poorer than before extraction.

Burchardt, H. J., & Dietz, K. (2014). (Neo-) extractivism–a new challenge for development theory from Latin America. Third World Quarterly, 35(3), 468-486.
An overview of key debates of ‘Neo-extractivism’ and the role of the state in Latin America.

Engels, B., & Dietz, K. (Eds.). (2017). Contested extractivism, society and the state: Struggles over mining and land. Palgrave Macmillan.
A presentation of several case studies around the globe on the conflicts between extractivism and other land uses.

Galeano, E. (1997). Open veins of Latin America: Five centuries of the pillage of a continent. NYU Press.
A classic essay on the history of the looting of natural resources, colonialism and uneven development in Latin America from the 15th century to the 20th century.

Svampa, M. (2015). Commodities consensus: Neoextractivism and enclosure of the commons in Latin America. South Atlantic Quarterly, 114(1), 65-82.
A critical analysis of neo-extractivism, capital accumulation, environmental conflicts and development. It ends up discussing proposals around ideas of post-extractivism and transitions.

Diana Vela Almeida is a postdoctoral fellow at the Department of Geography at the Norwegian University of Science and Technology. Diana combines political ecology, ecological economics and feminist critical geography to study extractivism, neoliberal environmentalism and socio-environmental resistance. Contact: diana.velaalmeida[at]ntnu.no

Jevons paradox

by Sam Bliss

The Jevons paradox is that efficiency enables growth. New technologies that can produce more goods from a given amount of resources allow the economy as a whole to produce more. More resources get used overall.

This is the magic of industrial capitalism and the secret of growth. Economists have known it for a long time. So why is it called a paradox?

A question of scale

The paradox is that we tend to assume that the more efficiently we use a resource the less of it we will use.

This is the case in our personal lives. If you buy a more fuel-efficient car, you might drive a little bit more but overall you will likely burn less gasoline. Switching to a low-flow showerhead typically saves water at home.

This efficiency-for-conservation logic appears correct for most subsets of the economy. When a business switches to energy-efficient light bulbs, its electricity bills go down. Municipalities that require new buildings to meet energy efficiency standards might see energy use decrease within city limits. 

But at the level of the whole economy, the reverse is true. These efficiency gains contribute to increasing production and consumption, which increases the extraction of resources and the generation of wastes.

Energy-efficient technologies do not reduce carbon emissions

This suggests that energy-efficient technologies do not reduce carbon emissions, that fertilizer-saving precision farming techniques do not decrease fertilizer applications overall, and that increasing agricultural yields does not spare land for nature. Real-world evidence supports these claims.

Environmental policy focused on efficiency gains does not by itself benefit the environment. Economies grow by developing and deploying increasingly efficient technologies. 

How growth happens

Consider a hypothetical example. If the owner of a tea kettle factory installs a new machine that can make one kettle from less raw copper than before, he might continue to produce the same amount of kettles at a lower cost, or he might choose to make more kettles overall from the same amount of copper. 

Either way, profits will go up. The factory owner can buy more machines to make even more kettles from even more copper. Or he can invest those profits elsewhere, increasing production in another sector of the economy and thus increasing the use of copper and other materials. 

As more tea kettle factories adopt the copper-saving technology, they might start selling kettles at lower prices to compete for customers. As tea kettles get cheaper, people will be able to buy more of them. Since more kettles can be sold, factories will make more—using more copper. 

Copper’s price might increase as factories increase their demand for it. When the price goes up, more potential copper mining sites become profitable, which further raises supply.

Or, even if all tea kettle factories end up using less copper with the new, copper-saving machines, copper’s price will fall and other sectors will be able to afford more copper and therefore demand more. 

Cheaper copper could make all copper-containing things cheaper, not just tea kettles, leaving people with more money to spend. They can demand more of the products of all economic sectors, further increasing the use of many materials, including copper. 

Cheaper copper might increase industrial profits, too, which capitalists either reinvest to increase production or spend on luxury things. 

Even if the initial factory owner decides to give his workers a raise rather than keeping the profit or increasing production, then the workers will have more money to spend on tea kettles and everything else. Even if they decide to save all that additional income, the banking sector will direct it toward investing in more new machinery to produce more things from more materials.

No matter what, it seems, copper consumption rises in the end, because efficiency increases kickstart the growth machine.

The more efficiently society can use copper, the more of it will generally be used. Unless, that is, society intentionally limits its use of copper. 

The same goes for just about any resource.

150 years of more

English economist William Stanley Jevons gets credit for being the first to point all this out. In 1865, Jevons found that as each new steam engine design made the use of coal more efficient, Britain used more coal overall, not less. 

In 1865, Jevons found that as each new steam engine design made the use of coal more efficient, Britain used more coal overall, not less

These efficiency improvements made coal cheaper, because steam engines, including the ones used to pump water out of coal mines, required less coal to produce a given amount of useful energy. Yet increasingly efficient steam engines made coal more valuable too, since so much useful energy could be produced from a given amount of coal. 

That might be the real paradox: the ability to use a resource more efficiently makes it both cheaper and more valuable at the same time.

In Jevons’ time, more and more coal became profitable to extract as more and more uses of coal became profitable. Incomes increased as coal-fired industrial capitalism took off, and profits were continually invested to expand production further. 

A century and a half later, researchers from the Massachusetts Institute of Technology found that as industrial processes have gotten more efficient at using dozens of different materials and energy sources, the overall use of these materials and energy sources has grown in nearly every case. The few exceptions are almost all materials whose use has been limited or banned for reasons of toxicity, like asbestos and mercury. 

In an economy designed to grow, the Jevons paradox is all but inevitable. Some call it the Jevons phenomenon because of its ubiquity. Purposefully limiting ourselves might provide a way out.

Fighting growth with collective self-limitation

To prevent catastrophic climate change, humanity must rapidly reduce the combustion of fossil fuels. But despite decades of policy efforts and international negotiations, emissions continue to rise every year.

The focus on making energy use more efficient is paradoxically worsening the problem, as efficiency gains facilitate increasing, not decreasing, carbon burning. And renewable energy sources are adding to fossil fuels, not replacing them. Earth’s limited sources of coal, oil, and gas will not run out in time to save the stable climate.

But what if governments around the world treated coal like they do asbestos? What if petroleum extraction and uses were subject to strict limits like those of mercury?

To limit the use of fossil fuels, or anything else, society must impose limits on itself, preferably democratically

To limit the use of fossil fuels, or anything else, society must impose limits on itself, preferably democratically. We must set limits on our own activity.  

Once binding limits are in place, efficiency gains become one of several tools for staying within them. With a hard cap on the total amount of oil that can be burned, adopting increasingly fuel-efficient machinery cannot backfire and spark growth of oil-burning economic activity. Instead, fuel efficiency would allow more useful work to be done with the limited amount of oil that society permits itself to combust. 

Of course, we must also be skeptical of the maximizing mentality that considers efficiency and more to be good things as such. Collectively limiting ourselves offers not just an escape from capitalism’s endless loops of efficiency and growth; it also provides the constraints necessary to imagine and act out new ideas about what makes the good life, as well as revive and protect traditional lifeways. 

For many communities around the world, a global project to limit resource use could bring liberation from pollution, exploitation, and the one-way path toward Western-style development. To them, limits do not mean reductions or sacrifice but an opportunity to pursue goals other than growth.

Efficiency makes growth. But limits make creativity.

Once free from the efficiency mindset, we see that setting legal limits is not the only solution to the Jevons phenomenon. Society can also purposefully choose less-efficient production processes, setting the paradox in reverse by constraining the potential scale of the economy. If efficiency makes growth, maybe inefficiency makes degrowth.

Further resources

David Owen. “The Efficiency Dilemma.” The New Yorker, December 12, 2010. 
 This New Yorker piece captivatingly chronicles the history of the Jevons paradox as an idea and as a real material force.

Christopher L. Magee and Tessaleno C. Devezas, “A Simple Extension of Dematerialization Theory: Incorporation of Technical Progress and the Rebound Effect,” Technological Forecasting and Social Change 117, no. Supplement C (April 1, 2017): 196–205.
This is the article in which MIT researchers show that the Jevons paradox applies to pretty much every material, energy source, and industrial process for which data exists.

Salvador Pueyo. 2020. “Jevons’ Paradox and a Tax on Aviation to Prevent the next Pandemic.” Preprint. SocArXiv. https://doi.org/10.31235/osf.io/vb5q3.
The Jevons paradox holds that using a resource more efficiently leads to economic growth and thus more of that resource is used overall. In this article, Salvador Pueyo shows that, similarly, advances in disease control have enabled humans and livestock to live at higher densities, eventually bringing about more ferocious outbreaks. He argues that the aviation industry shifts costs onto society by spreading diseases around the world, and should thus be taxed.

Sam Bliss, “Why growth and the environment can’t coexist.” Grist. 
This video explains degrowth in 4 minutes, starting from a Jevons-inspired explanation of how increasing efficiency in orange juice production leads to more oranges consumed, not less.

Sam Bliss is a wildly inefficient researcher, writer, gardener, and warehouse manager of Food Not Bombs Burlington. He participates in and studies non-market food systems in Vermont.