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--:-- Noel King: Good news here. New figures show the economy is growing. China's latest quarterly growth figures are out and they're better than expected. Rwanda is the third fastest growing economy in the world. The India growth story is alive and kicking. It's because of endless growth. We can have all the things we enjoy today. But we don't know where this growth goes. And if it doesn't stop, it will cause a strain The capitalist, capital P, philosophy is underpinned by a really simple assumption. Growth is good. But what if it isn't? You've got a finite planet. It has certain limits. You should listen to those limits.
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--:-- Noel King: Coming up on Today Explained, blame capitalism. We're going to talk degrowth. Support for this show comes from ServiceNow. AI is only as powerful as the platform it's built into, don't you know? That's why it's no surprise that more than 85% of the Fortune 500 use the ServiceNow AI platform. Didn't know that. While other platforms duct tape tools together, ServiceNow seamlessly unifies people, data, workflows, and AI, connecting every corner of your business. And with AI agents working together autonomously, anyone in any department can focus on the work that matters most. I've never met an AI agent. Learn how ServiceNow puts AI to work for people at servicenow.com. Subject to credit approval, AppleCard is issued by Goldman Sachs Bank USA, Salt Lake City Branch. Terms and more at AppleCard.com. It's Today Explained. I'm Noelle King. On Fridays this month, we've been examining how and why so many Americans have turned on capitalism. 24-year-old Adrian Lodice is one of those people.
--:-- Adrian Lodice: I'm a former EMT and a current communist. Why do you hate capitalism? I mean, where do I start? I think that the big thing that got me because I was an EMT is just the explicit profits over people part. And I saw that firsthand as a health care provider of we're the ones on the truck. Yeah, I was only making $14.50 an hour while they made billions in profit. And I think that that really just got me of like, we see me as being unskilled, even though I'm the one doing the actual labor. yet we see the people at the top as very, very skilled.
--:-- Noel King: Rarely, as a reporter, do you get it all in one answer. But there it was, in the first interview I did for this series, all in one answer. Inequality, bad wages, and what we've done to the environment on our way to economic growth. And it is not just the young communists talking this way. You remember Wendy Carlin from our first episode, PhD, CBE, super smart professor of economics. Wendy traced for us the capitalist arc from Adam Smith's invisible hand liberalism to Keynesianism, where the government's hands are massaging problems away.
--:-- Wendy Carlin: I asked Wendy, what is the ism in 2023? Where do we stand? Well, the thing really is we need a new ism because we have new problems. Each of the isms kind of emerges to deal with the problems of the preceding one. So now we have problems of inequality, of climate crisis, and we need to have a livable planet. And that's got to be put together into a coherent economic system if we're going to meet those challenges. A new ism. You heard me gasp. But what would that mean? Well, one possibility is not a word that ends with ism. I wish it were for consistency, but no, it's called degrowth. And it means stop trying to grow economies, to grow GDP.
--:-- Noel King: Degrowth is controversial and for good reason. Growth is good. I lived for a long time in African countries that were experiencing GDP growth. I saw highways being built and towers being erected and roads being paved. To this day, scaffolding and rebar make me so happy. It means things are growing. I knew people in Sudan and Rwanda who'd had to leave school at 9 or 10 years old. But thanks to economic growth, they were sending their kids to college. Not for nothing that growth is a key tenet of capitalism. But growth can be very unequal, and it can absolutely trash the planet.
--:-- Dirk Philipson: De-growth is a not particularly well-defined term that combines a number of people who have all come to the conclusion, based on very, very solid evidence by now, that we can no longer grow. And yet live in a world in which literally every government on earth currently pursues a strategy of growth. The de-growth movement says this is a suicide pact.
--:-- Noel King: Dirk teaches public policy at Duke. He wrote a book called The Little Big Number, how GDP came to rule the world and what to do about it. GDP is gross domestic product, and it's the sum total of all of the goods and services produced in a country in a single year, everything. So how did it come to rule the world? Effectively, it came out of the Great Depression when capitalist economies around the world collapsed and nobody quite understood why that was happening.
--:-- Dirk Philipson: In 1929, we had a crash. And in 1934, Congress asked economists what happened. They began to realize that they really didn't have a whole lot of knowledge about what the economy actually is and what it entails. And for the first time, we counted. And we came up with what is now known as GDP or gross domestic product And so GDP is essentially now a metric that measures quite accurately output of an economy The problem with that immediately the minute you begin to think about it is that it is just simply volume. And volume only expressed in money. So anything and everything that particularly women do, for instance, in the care economy that is not sold in the marketplace is not counted.
--:-- Noel King: By 10.30, Delfina has breastfed the baby, dressed the children, made three beds, tidied two bedrooms, prepared breakfast for four, done the washing up, cleaned the bathroom, finished one load of washing, and mixed the powder paint as her contribution to the activities of community play school. Whether almost all of the proceeds go to rich people and nothing is left for poor people is not measured. Whether the things that we sell in the marketplace are good or bad, toys or weapons, is not differentiated. It counts war. It counts environmental degradation. It counts pornography. It counts cigarette advertising. Things that many societies may view as unhealthy and perhaps slightly toxic.
--:-- Dirk Philipson: This is a profoundly misleading and ultimately stupid and dangerous metric. We are in desperate, dire need to find much better metrics, much better guidelines for what we do in our respective national economies. We need to figure out how to build economies that allow us to thrive without having to grow. Where did the degrowth movement start? Well, that depends on how you want to slice that particular cake. It has multiple origin points, I think, that are important. One is certainly the 1960s and early 70s. Chief among them, a report by an organization called the Club of Rome that is probably, to this very day, a text on economics that has been read by more people than any other, and that is called The Limits to Growth.
--:-- Noel King: As we grow richer, there is rising concern about pollution, our ability to feed a growing population, and fears that we may run out of fuel and metals. The world is in a completely unstable situation and is likely to fall to pieces if it doesn't stop growing. Because of the high population levels and the increasing industrialization, natural resources are depleted at an increasing rate, and finally they fall down to the point where the industrial system can no longer be sustained.
--:-- Dirk Philipson: So it goes from a bunch of nerds in a room in the early 70s writing a report. And now it's 2023. And I'm seeing this language in so many places. We are in the beginning of a mass extinction. And all you can talk about is money and fairy tales of eternal economic growth. How dare you? Environmental activists are talking about degrowth. Economists are talking about degrowth. There's new books about degrowth. I've seen in the big newspapers, the New York Times, the New Yorker, essays, op-eds, wondering if it's possible.
--:-- Noel King: Can you trace the arc for me? Yeah, so this is essentially happening at the same time as the environmental movement is coming up. You have a river catching on fire because of all the pollutants and the trash that is in the river. The Cuyahoga River, as it reaches Lake Erie, is an exhausted stream. abused and misused by man and his machines. You have a full-scale picture of planet Earth called the blue marble. No one after seeing that could deny that the world is finite. This really changed people's understanding as to what we need to do in order to take care of this planet.
--:-- Dirk Philipson: And vitally important also for the establishment of an environmental movement in which they use computers to show for the first time that if we grow exponentially, we will simply run out of resources and destroy the planet. It also comes out of multiple political movements that were against societies turning into consumer societies where nothing matters any more than producing and consuming. If you have a kind of society which is going to eat the very planet we're on, eat it up, consume it, you will find that there's nothing left.
--:-- Noel King: One more thing I want to say about the degrowth community is that they are not just saying it's not possible. They're also saying it's not desirable. It's a kind of life that you and I ultimately do not want. We don't want to drown in just stuff. We want to have a life. We want to have time for each other. We want to have time for creative thinking and art and love and kindness.
--:-- Dirk Philipson: You teach at Duke. You understand American politics. I think an American politician could not win on a platform of degrowth. I beg to differ. Tell me. Tell me more. The only famous politician in the Western world, to my knowledge, who ever made it a platform to replace GDP and to try to begin to develop an economy that does not need to grow with Robert F. Kennedy. Too much and for too long. We seem to have surrendered personal excellence and community value in the mere accumulation of material things.
--:-- Noel King: In a speech in 1968, he talked about it very, very eloquently, saying that just the way we measure success right now... It measures everything in short. ...measures everything except that which makes life worthwhile. And it can tell us everything about America, except why we are proud that we are Americans. He had very deeply thought about it. He was very smart about it. And from what I know about this history, he was likely to be not just the Democratic candidate, but also likely to be the next president of the United States
--:-- Dirk Philipson: This is a message that needs to be told It a difficult message because it runs up against very deeply ingrained assumptions that people have. But I think it is increasingly a message that resonates with a growing number of people, and particularly young people I work with. I don't even have to explain it anymore. When I started working on this, I would imagine that worldwide there was maybe a community of 500 to 1,000 people who were working on this. Now there are hundreds of thousands of people. People are beginning to understand this is the critical issue. This is the most important critical issue of all times.
--:-- Noel King: That was Duke University's Dirk Philipson. Coming up next, wait, could a politician win on a platform of degrowth? What would the platform be? Thank you. CHIME says with qualifying direct deposits, you can be eligible for free overdraft, up to $200 on debit card purchases and cash withdrawals. Plus, they say you don't need to worry about monthly fees or maintenance fees. You can work on your financial goals through CHIME today. You can open an account in two minutes at chime.com slash explained. That's chime.com slash explained. CHIME feels like progress. CHIME is a financial technology company, not a bank. Banking services and debit card provided by the Bank or Bank N.A. or Stride Bank N.A. Members FDIC. Spot me eligibility requirements and overdraft limits apply. Timing depends on submission of payment file. Fees apply at out-of-network ATMs. bank ranking, and number of ATMs according to U.S. News and World Report 2023. Time checking account required.
--:-- Noel King: Back with Today Explained, Blame Capitalism. Over the course of our series, we've heard critiques of shareholder capitalism, of laissez-faire capitalism, of entire ages that masquerade as golden, capitalism, but exclude a lot of people. But there's an argument that it's not the modifiers. The problem is just capitalism. The overriding misconception in capitalism is that it has no idea where enough is. That sort of point of balance between having too little and having too much. And even if it did recognize that point, it has no way of stopping when it gets there because it's too busy growing.
--:-- Tim Jackson: I lead a research center called the Center for the Understanding of Sustainable Prosperity. We started this series on capitalism by noting that everyone seems deeply disappointed in it these days. And we say everyone, I'm exaggerating, right? But more and more, you hear people out in the public square saying capitalism is not working. Why do you think that is? Where do you think this discontent has come from in the past decade or so?
--:-- Noel King: Well, it's come from the fact that the inequality that capitalism has given rise to has become more more obvious. Also, I think we can look back at the financial crisis, see that as a crisis of capitalism, a point at which the most capitalistic institutions, the banks and the financial institutions, basically fell apart because they had behaved too recklessly and then had to be bailed out essentially by the taxpayer.
--:-- Tim Jackson: If there's one thing that has unified Democrats and Republicans and everybody in between, it's that we all hated the bank bailout. And then there are sort of longer term trends, this sort of rise in inequality because of the concentration of wealth in the hands of a very few. And that's, I think, interestingly, given rise to dissatisfaction even among capitalists. Mark Benioff, who was the CEO, chief executive of Salesforce at the time, went to the World Economic Forum in January of 2020, basically saying capitalism is dead. Capitalism, as we have known it, is dead.
--:-- Noel King: And this obsession that we have with maximizing profits for shareholders alone has led to incredible inequality in a planetary emergency. And that was an extraordinary thing, really, for somebody who had become a billionaire through capitalism and lived in one of the most capitalist countries and presided over one of the most capitalist companies to start saying, actually, you know, we have to think a little bit differently about what we're doing here because this kind of capitalism at least doesn't work.
--:-- Tim Jackson: But what I really took from that conversation and from this dissatisfaction with capitalism is that actually we should be thinking about capitalism as a temporary phase in history. All phases in history are temporary. We know that everything changes. No social system lasts forever. And actually, I think that's a very good basis for starting to think about what might happen after capitalism. What might happen after capitalism? You're asking me to answer that? Yeah, yeah. I mean, it is a huge question.
--:-- Noel King: And here's where the degrowth movement can run into trouble. What are its policies? A degrowth lawmaker would run on what exactly? Some of the books about degrowth offer ideas, like legislate an end to planned obsolescence. My iPhone and millions of other iPhones could last 10 or 15 years if Apple built them that way. Apple has settled a class action suit after being accused of purposely slowing down older phones during upgrades
--:-- Tim Jackson: Another idea cut advertising on TV and on billboards so that people don buy a bunch of stuff they don need They everywhere you look and now they looking at you too Digital billboards with the ability to track your every move Or shift from ownership to usership. It's called Avail, and it's basically like Airbnb for your car. It puts unused vehicles like these on the road and money in owners' pockets. And a controversial idea for Americans, legislate that the emissions-spewing beef industry has to shrink. In digesting their high-fiber diet, cows emit methane as a byproduct, making them one of the least climate-friendly sources of food on the planet.
--:-- Noel King: I actually stopped eating meat after reading a couple of these compelling degrowth books. But there's the problem. A lot of these solutions come down to individual behavior. Would companies agree to this stuff? The way things are set up now, the purpose of a corporation, you remember, is to make money for its shareholders. Could that really change?
--:-- Tim Jackson: The transition we're talking about takes the fundamental bits of economics and asks what should they really mean. So is investment, for example, an endless wealth maximisation process that makes a few people very rich at the expense of the majority? No, that's not what investment means in economics. Investment means taking some of our income from the present, putting it aside in order to construct a better future. It's about seeing the future and investing in that future investment as a commitment to the future.
--:-- Noel King: Same thing with enterprise. It's there to serve society. And if you begin to think about the services that enterprises provide to society, you organise them in different ways. You pay for them in different ways. They self-organise in different ways. And they deliver different things to society. And so essentially it does make it sound like a rather complicated exercise. And I think we should not expect it to be simple. Because we are embedded in this complex culture and it's been with us for a couple of centuries.
--:-- Tim Jackson: And it's embedded in our politics. It's embedded in our psyche. It's embedded in our organization of society. And it's embedded in our economics. I mean, we've all learned, and I think accurately, that GDP growth has helped humanity in the developed world. It has helped us become the developed world. Shouldn't we be pursuing that for the parts of the world that are underdeveloped, that don't have what we have? I think that's a really, really important part of the conversation.
--:-- Noel King: It's a really important observation. You don't, I think, want a system in which you rule out the possibilities of growth in those poorer parts of the world. That growth is at the moment in hock to the rich economies, in debt to the rich economies, organized under systems that are dominated by the rich economies. And there's nobody in the rich economies really taking that problem seriously. Nobody saying, actually, you know, we can't afford to grow here anymore because there is a desperate need for growth to bring poor people out of poverty.
--:-- Tim Jackson: And that's a wicked problem. It's a problem that calls on us to be politically astute, courageous as leaders, inventive as entrepreneurs, and sometimes simply moral as human beings. Human beings are not short-term, selfish, hedonistic consumers, or at least that's not our entirety. And we're losing the depth of our own humanity by living inside a system that pretends that we are those individuals and that creates all its institutional arrangements to confine us in what I see actually as a kind of a cage.
--:-- Noel King: I see capitalism as a cage that confines us into an image of ourselves that I don't personally believe in. And if I look to poets or sages or psychologists or sociologists, I don't see that they believe in it either. The only people who do seem to believe in it are economists.
--:-- Noel King: Everyone's talking about capitalism and they all seem like they're mad. That's where we started this series. We asked, what is capitalism? It's an economic system of private property, markets, and companies. An anodyne definition for a thing that's anything but. We also asked, can we change it? Should we try? Well, people have changed it. It's a powerful system, but as we've learned, it's not natural. It was never inevitable. And while maybe the most potent thing ever said about capitalism was Iron Lady Margaret Thatcher's remark that there is no alternative, Today, a lot of people, burned by the system or excluded from its successes, are asking, but what if there is?
--:-- Noel King: Today's show was produced by Avishai Artsy. We had original music from John Ahrens, and our editor is Matthew Collette. We had additional editing from Jolie Myers and Miranda Kennedy. Halima Shah and Laura Bullard were our fact-checkers, and our engineer was David Herman. Those specific ideas in the episode on how to do degrowth came from Jason Hickel's provocative book, Less is More, How Degrowth Will Save the World. The rest of the team here at Today Explained includes Siona Petros, Miles Bryan, Hadi Mawagdi, Patrick Boyd, Rob Byers, Amina El-Sadi, Victoria Chamberlain, and Amanda Llewellyn. My co-host is Sean Ramosfirm. And if you're having strong feelings about degrowth, please do email them to Sean. He's at seanramasfirm underscore two at gmail.com. We're produced by the Vox Media Podcast Network and distributed to public radio stations by WNYC in New York City If you like the show, here's an idea Rate us and give us a review on Apple Podcasts It'll help other people find the show I'm Noelle King It's Today Explained Thank you.
