Bestseller In Japan: “Degrowth Communism” As The Answer to Climate Change, Part I

Neither Accurate Nor Marxist

What a startling number. A half million Japanese have bought a book—Hitoshinsei no Shihonron [Capital in the Anthropocene]—that claims the answer to climate change is to shrink the economy. “Degrowth communism” is what the author, a formerly obscure 35-year-old Marxist professor named Kohei Saito, calls his policy. It’s a recipe for keeping billions of people in poor countries in abject poverty while lowering living standards throughout rich countries. Were the environmental movement to be associated with either communism or “degrowth”—as a minority of environmentalists in the US and Europe also advocate—that would be its political death knell, a gift to the peddlers of fossil fuels.

            The problem with capitalism, Saito contends, is that it worships economic growth. The problem with growth, he claims, is that it inevitably brings on ecological disasters. Whereas the actual Karl Marx claimed that growth under socialism would create abundance galore while still protecting nature, Saito is part of a group of academics that calls itself Marxist but has rewritten Marx as if he were a Malthusian. The real Marx regarded Malthus as “contemptible.” He was not alone. Dickens’ Ebenezer Scrooge echoes Malthus in saying let the poor die so as to reduce the “surplus population.” Marx rhapsodized over capitalism’s achievements in propelling economic growth through the application of science, machinery, chemicals, and so forth. While Saito claims Marx reversed his odes to technology-led growth during 1865-68, in reality, Marx elaborated them in Capital, whose first volume came out in 1867.

Rich Countries Delink Growth and CO2 Emissions

Growth and technological progress are not the problem; they’re the answer. The two billion people who still rely on animal dung and wood emit a lot more carbon emissions when they cook or heat their homes than people in richer countries who can afford modern sources of energy. The biggest growth in emissions comes from countries that are neither poor nor rich, but are in transition. Once countries get rich, carbon emissions slow and eventually decline. In part, this is due to automatic processes as the economy adopts better production methods and renewable energy becomes increasingly cheap. This process will be detailed in Part II. These natural processes are not sufficient to avoid catastrophe but are being accelerated by government policies, which often find their greatest support in the richer countries.

            In both Japan and Europe, CO2 emissions rose in tandem with GDP during the transition to affluence. However, beginning in the 1970s, CO2 emissions in Japan slowed, then flattened out, and finally in the last decade started to fall.

Source: World Bank, Our World in Data

In Europe, CO2 emissions peaked in 1980 and fell 30% by 2019!

Similar tendencies show up in the US.

They may have already begun in China a decade ago, but it’s too early to be sure this trend will last.

Marx: Right on Techno-Optimism; Wrong On Capitalism

It’s worth recalling what the real Karl Marx wrote since there is a revival of interest in Marx in Japan among young people, a revival partly catalyzed by Saito. While Marx got so much wrong regarding the possibilities of well-regulated democratic capitalism, he was far ahead of his time in being a “techno-optimist.” He correctly saw that the problems created by growth and technology could be solved by even more growth and even better technology. In this regard, he had more in common with the economists of today than with the great “classical” economists like Adam Smith, David Ricard, and John Stuart Mill. They all believed that the economy was doomed to eventually hit a “stationary state” of zero growth due to the law of diminishing returns. The latter states that, if you give a farmer a horse-drawn plow, he can produce far more crops. However, if you give him a second plow, it will do no good at all. What they failed to notice—and Marx put at the core of his theories—was the miracle of technology. If you replace the horse-drawn plow with a tractor and add some fertilizer and better soil management, output will zoom. It took nearly a century before Nobel laureate Robert Solow formalized this common sense notion into a mathematical model demonstrating that technological improvements can overcome diminishing returns and keep per capita GDP rising forever. Solow’s work is the foundation of modern growth theory.

            So, while Malthus famously predicted that people would starve because population increases geometrically and food output cannot keep up, in reality, the opposite has occurred. From 1960 to 2010, the number of people on the planet has more than doubled, while farmland increased only 10%. Still, food output has tripled.

            What Marx got wrong was his insistence that capitalism could not solve the problems it created. In his view, it made working people poorer despite growth in GDP. Moreover, by degrading both labor and nature, it would eventually put a fetter on the very growth and technological progress that it had previously set in motion. No reforms were capable of solving these inherent problems. Consequently, capitalism would collapse of its own “contradictions.” Socialism could produce growth without these defects. This, of course, he got woefully wrong. In the last 70 years, while the global population has tripled, global GDP has increased 12-fold.

            Saito and other “degrowthers” retort: this progress is all temporary because it’s destroying the environment and therefore cannot be sustained. Even without climate change, there is still an absolute limit to resources. However, as both Marx and modern economists have demonstrated, what counts as a resource is technologically-determined. In the 1800s, people feared running out of firewood and predicted that city streets would be covered in disease-spreading horse manure (see photo at the top). The firewood crisis was solved by coal and eventually oil, which technology converted from a nuisance to a resource. Autos ended the horse manure malady.

            The history of humankind is that problems evoke solutions, and those solutions eventually create their own problems, ad infinitum. The culprit today is neither growth nor capitalism, it’s fossil fuels. The “degrowth” movement endangers the effort to defeat climate change.

            Part II will detail how economic growth is essential to the fight against climate change.