ECONOMIC DE-GROWTH FOR ECOLOGICAL SUSTAINABILITY AND SOCIAL EQUITY” , Paris , 18-19 April 2008

1. ECONOMIC DE-GROWTH FOR ECOLOGICAL SUSTAINABILITY AND SOCIAL EQUITY”, Paris, 18-19 April 2008 De-growth: Addressing Cultural and Institutional Constraints Igor MatutinovićGfK – Center for market researchZagreb, Croatia; GfK Group

2. Introduction: Initial Propositions 1. Capitalist economy is an autocatalytic system insitutionally designed for growth and dynamic change. 2. The global capitalist system have the propensity to continue to grow until it exceeds the biophysical limits of earth ecosystems. Risksof international tensions and violent conflicts Potentially irreversible degradation of global ecosystems

3. Range of solutions • Technological Fix: Improve energy efficiency, increasethe share of renewable energy sources, and introduce new technologies • Behavioral Fix: Change production and consumption patterns & redesign lifestyles in capitalist economies • Managerial Fix: Improve global governance • Ideological Fix: Change the political and economic system

4. Behavioral Fix RESOCIALISATION* • Reducing preference for material consumption • Incrasing preference for leisure • Decoupling well-being from material consumption Culturally dependent changes *Robinson and Tinker, 1997.

5. Decoupling of personal well-being from material consumption – more leisure for less work and lower income! major reduction of working week earn & consume less drop in profiltability, industrial production & GDP recession & sharp correction in capital markets tax revenues decline capital escape production relocate abroad capital escape production relocate abroad domestic production lags behind demand unemployment rises social services enter in crisis prices go up and imports increase interest rates go up

6. Putting a cap on material inputs* Estimating sustainable rate of resource troughput Auctioning tradeable resource permits to the industry Proceeds Letting markets drive the allocation and technological efficiency Growth in income, profits and investments Growth in GDP is possible Increase in Sustainable Economic Welfare Redistribution *Philip Lawn, 2004; 2005

7. Putting them together ... Cap on Energy & Material Inputs Reduction of Working Week _ _ + Reducing material troughput, waste and emissions Reducing demand for consumer goods Mediated by Markets DE-GROWTH Easening of human pressure on gobal ecosystems and climate

8. Exploring constraints ... Cap on Material Inputs Major Reduction of Working Week Political problem Not viable under regime of global trade and capital flows Requires global governance for fossil fuels, material inputs, fisheries, fresh water, tropical forests Redistribution: poverty problem in the South CHINA & INDIA Dynamic growth On the way to become fully industrialized major world economic powers. Radical changes are required at the cultural and institutional levels!

9. Systemic perspective ... Cultural constraints Environment Human Subsystem Worldview Technology Institutions Resorurces Patterns of production & consumption Waste & Heat Human Biology HSP {biological{ideational {institutional {economic}}}} (Salthe, 1996)

10. Summing up the constraints ... • Substantial reduction/stabilizationofmaterial and energy consumption is constrained by: • Capitalist institutions and Western life-styles getting global • Huge gap in the material standard of living between advanced and industrializingcountries. • Dynamic growth momentum of China and India • Population growth in the South

11. Policy recommendations ... 1. To open up maneuver space for long-term behavioral and institutional changes, nation states would first have to abandon neo-liberal doctrine and gradually revert to international trade. damp global economic growth reduce global energy demand more time for major societal adaptations ...

12. Thank you!

13. Economic and institutional globalization... predicted “The need of a constantly expanding market for its products chases the bourgeoisie over the entire surface of the globe. It must nestle everywhere, settle everywhere, and establish connections everywhere. The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilization.” Karl Marx, Communist Manifesto _____

14. “Because of biophysical constraints the economy sooner or later will stop growing. Therefore, at some point we will move to a different socioeconomic system whose characteristic are at present unknown and unknowable” (Gowdy, 1994). (International Journal of Social Economics, 8, 43-55)

15. Opportunistic life-style switchers Island of Cres, road to town Lubenice

16. AND WHAT EVENTUALLY HAPPENED?

17. Cultural entailments of Western civilization Worldview Beliefs, symbols, values and segments of objective knowledge that are widely shared by a society.

18. The “core” group of advanced capitalist economies manage to reduce and than stabilize its total energy consumption. Who else wants to be reformed to a steady state? CHINA & INDIA Increase p.c. consumption. On the way to become fully industrialized major world economic powers. EUROPEAN TRANSITION COUNTRIES Increase p.c. consumption DEVELOPING COUNTRIES Population Growth Debt Repayment Poverty Reduction