Degrowth Dilemma

Degrowth is a fairly modern economic philosophy that challenges the assumption that more is always better. Instead of pursuing endless GDP growth, it advocates for economies that prioritize ecological balance, social well-being, and meaningful living. This involves reducing excessive consumption, rethinking productivity, and strengthening local communities. At its heart, degrowth asks: What is enough? and How can we live within the planet’s limits?

This intentional scaling down of economic activity is increasingly seen as a necessary shift away from consumerism and overproduction. However, the challenge becomes more complex when considering the sheer scale of the global population.

In a degrowth economy, lower levels of production and consumption can reduce overall demand for labour, raising the risk of unemployment. This is especially true as growth-dependent sectors contract and productivity gains outpace the need for workers. To address this, degrowth proponents suggest redistributing work through shorter workweeks and expanding public services.

Yet, this approach has its own complications. If people maintain similar incomes while working fewer hours, they may have more leisure time and more opportunities to spend. This could increase demand for goods and services even as supply is deliberately constrained. If production cannot keep up, it may lead to demand-pull inflation, and in extreme cases, even hyperinflation. While most degrowth models aim to prevent this through careful planning and resource rationing, the risk underscores the delicate balance such a transition requires.

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