By Nicholas Langridge and Milena Büchs
The world is in crisis, socially, ecologically, and economically.
Billions around the world live in some form of poverty and inequality has reached unprecedented levels. The world has also transgressed six of the nine planetary boundaries that researchers say mark the safe space for humanity. In 2023, fossil fuel consumption reached an all-time high. As a result, it’s becoming more likely that the world will pass more than 2°C of warming by the end of the century.
The endless pursuit of economic growth will not fix this. It will make the situation worse. New growth makes the world less equal because its benefits are disproportionately captured by the already rich, with just 2% of new wealth flowing to the poorest half of the population. Growth also further threatens the environment, and a recent poll of climate scientists found that many are now sceptical that sustainability goals and further growth are compatible.
The UN Special Rapporteur on Extreme Poverty and Human Rights concurs. In a recent report, they took the bold step of rejecting the continued use of GDP as a measure of economic progress, calling instead for a greater focus on human rights, wellbeing and the redistribution of existing resources.
Even if further growth were desirable, decelerating technological innovation, reductions in the working-age population, and declining fossil energy supplies make the end of growth all but inevitable. The only question is how we will handle it.
Welfare at the end of growth
The (ironically rapidly growing) degrowth movement exists to actively anticipate and chart a course through the challenges thrown up by the end of growth.
Welfare is one area that will need radical reform if it is to continue to function. Current welfare systems co-evolved with growth-based economies to be mutually dependent on each other. Welfare systems support, stabilise, and legitimise the current economic system by trying to keep poverty, inequality, and social exclusion in check while also increasing labour productivity through education and health services. Economic growth is necessary for maintaining those welfare systems, as they are mainly financed through growth-dependent sources such as social insurance contributions and certain types of tax revenues.
But sustainable alternatives to this model are possible. A growing number of academics and civil society groups are advocating for the creation of a new forms of welfare that meet five specific criteria:
- align with planetary boundaries
- be decoupled from economic growth.
- satisfy human needs
- promote fair distribution of resources
- be democratically decided and governable
To achieve this in a post-growth future, a greater proportion of overall resources in the economy will need to be directed towards needs satisfaction and welfare. This means that there will be less available for unnecessary and luxury consumption, with the greatest change required by the wealthiest.
Universal basic services (UBS) and universal basic income (UBI) are two prominent policies being discussed in the context of sustainable welfare ex. Advocates of both argue that they comply with sustainable welfare by:
- redistributing wealth and resources from rich to poor
- providing the material and non-material means for satisfying human needs in a post-growth context
- mitigating the regressive consequences of green policies
- providing people with the time, space and resources to engage in meaningful activities, including democratic participation.
The sustainability of universality
UBI and UBS are often framed as contrasting models in competition with each other. We argue that this should not be the case. Both have different, complementary roles to play in the provision of post-growth, sustainable welfare.
UBS – public services that satisfy core human needs and are free at the point of use – make it possible to live a good life without relying on markets. Private firms chase profit, have growth written into their DNA, and often fail to make the necessary goods available, or do so only at unaffordable prices (think of the global housing crisis). Public services in contrast are progressive, with higher benefits to the poor, and do not need the profit motive to sustain themselves.
Empirical studies have also shown that public services can lead to greater improvements in health, well-being, and other social indicators than private equivalents. And, despite their reputation, they can also be more cost-effective and use less resources. The UK’s National Health Service emits less than a third of the CO2 equivalent per person than the American private system. Mass transportation systems are known to be much less resource intensive than private cars.
Degrowth prioritises social protection and those sectors contributing to wellbeing in ecologically sustainable ways over expansion and capital accumulation for the wealthy
This does not mean that post-growth societies should include only that which can be publicly provisioned. No set of public services could meet every need, for every person, and to presume otherwise would be an attempt to restrict individual autonomy – an essential need in itself. Some needs remain better served through well-regulated markets, particularly where individual needs and preferences play an important role: think food, clothing, or leisure activities. But not all.
This brings us to UBI. As an unconditional cash income paid to all on a regular basis, a UBI would provide people with the monetary resources they need to acquire basic goods and services of their choosing, whether available through private markets or through collectively or publicly owned and managed institutions. Freedom and individual autonomy are needs in themselves and central moral and philosophical features of UBI. It supports them not only as abstract rights but seeks to give people the genuine capacity to choose how they satisfy their needs.
The combination offers a more sustainable future for us all. A core set of services catering to major life areas, provided efficiently to all outside the profit and growth motive. A basic income that gives people a minimum capacity to choose what they wish to consume, within well-regulated markets that are compatible with planetary boundaries.
Sustainability is possible, but not guaranteed
It’s important to acknowledge that policies such as UBI and UBS may make a sustainable future more possible, but they alone don’t create one. An economy that prioritises staying within planetary boundaries and satisfying everyone’s needs, strong market regulation, and redistributive funding sources are pre-conditions for a sustainable future, within which UBS and UBI can support needs satisfaction and ecological outcomes.
The political will to execute a comprehensive programme is needed: responsibly decelerate and then end economic growth with the one hand, while putting systems into place so that people can make the shift to a new form of living with the other.
To understand how this could work, we must understand that degrowth is not the same as a recession. Recession occurs when an economy designed to grow stops doing so, resulting in unemployment and welfare cuts which disproportionately hurt the poor.
Degrowth, by contrast, is the democratically planned transition to an economy which does not grow at the aggregate level by design. It prioritises social protection and those sectors contributing to wellbeing in ecologically sustainable ways over expansion and capital accumulation for the wealthy.
In a post-growth economy, resources for needs satisfaction and welfare would represent a much larger proportion of overall production and consumption than they do today. Unnecessary and ecologically harmful economic sectors would be downscaled, and their resources would be redirected to the provision of factors which contribute directly to higher wellbeing.
Multiple policies for funding sustainable welfare have been discussed in the academic literature. Common proposals include progressive income taxes, taxes on wealth, taxes on luxury consumption, or taxes on carbon, resources, and environmental bads. Work on modern and ecological monetary theory has also demonstrated that governments with sufficient monetary sovereignty can, in fact, mobilise the necessary resources by issuing public money. While public money creation remains limited by inflation, productive capacity, and ecological boundaries, this can be managed through a combination of the taxes mentioned above.
The degrowth movement still has a lot of work to do to prepare for the future it seeks to create. Much more research is needed, for example, into the best combination of these funding sources, their compatibility with degrowth and sustainable welfare perspectives, their political feasibility, and their alignment with monetary theory.
But the movement understands its direction of travel and the basic building blocks it needs to get there. Sustainable welfare, which would likely include elements of UBI and UBS, can be achieved if productive resources are redirected away from harmful and unnecessary industries and towards the provision of ecologically sustainable needs satisfaction and welfare. As one of the 20th century’s most influential economists, John Maynard Keynes, famously noted in a 1942 BBC address: “Anything we can do, we can afford”.
