A fixation with growth in economics has seen GDP increase in proportion to environmental damage. As planetary limits draw ever closer and are even being surpassed, such a model cannot be sustained. Riccardo Mastini explains how a job guarantee could open up the way to a sustainable economic model.
This article is also available in audio as part of the Green Wave podcast.
Since the dawn of capitalism, market economies have placed a high emphasis on labour productivity. Continuous improvements in technology geared towards productivity increases lead to more output being produced for a given amount of labour. But crucially these advances also mean that fewer people are needed to produce the same amount of goods and services each year. As long as the economy expands fast enough to offset increases in labour productivity there is no problem. But if the economy does not grow, people lose their jobs.
Economic growth has been necessary within this system just to prevent mass unemployment. Communities and the politicians that represent them celebrate the construction of a new factory not so much for the increase in supply of some needed product, but because of the jobs it creates. In advanced economies, the shortage of employment has become more pressing than the shortage of products. Basically, we produce goods and services mostly to keep people employed rather than to cater for their needs.
But what if economic growth were to slow down and, eventually, come to a halt in the near future? More than half a century of ‘growth propaganda’ supporting the dogma that pursuing never-ending growth is plausible and desirable may make this new prospect shocking for some. However, there is now overwhelming evidence that decoupling GDP growth from increases in natural resource and energy use is impossible. And our plundering of Earth’s bounty has already reached unsustainable levels with the overshot of several planetary boundaries.
It is, therefore, time for a bold public debate about whether it is desirable to continue our relentless pursuit of economic growth, with the associated dire consequences for the health of the planet, simply to keep people employed. Adopting an economic policy proposal known as the job guarantee could ensure full employment while our society transitions towards an economy that no longer grows. All this, without sacrificing the goods and services needed for just and sustainable prosperity.
The need for planned economic degrowth
The idea of ‘degrowth’ takes aim at the irreconcilable contradiction between the growth imperative of capitalism and sustainability on a finite planet. Degrowth is defined as an equitable downscaling of production and consumption that will reduce society’s extraction of energy and raw materials and generation of waste. More broadly, degrowth means the abolition of economic growth as a social objective. Instead, degrowth implies a new direction for society, one in which we live and work differently from today by giving priority to a sustainable level of wellbeing for all citizens rather than to maximising wealth.
Basically, we produce goods and services mostly to keep people employed rather than to cater for their needs
The first step in this direction requires decoupling employment from economic growth. This shift is essential as changes in the labour market can facilitate the political appeal of degrowth ideas to citizens who are, after all, always faced with the threat that sustainability policies that menace economic growth will leave them unemployed. In the long term, degrowth advocates may want to pursue changing broader attitudes towards the concept of work so that self-esteem no longer depends on one’s ability to earn money through paid work. A Universal Basic Income could be one way of doing this. With a UBI, pursuing full employment becomes superfluous since people will have a guaranteed livelihood regardless of them working or not.
But — as argued by the ecological economist Blake Alcott — work remains an essential value in our society and should remain our starting point. There are only a limited number of years remaining to convince voters to opt for a managed, humane transition to a smaller economy. The time frame precludes waiting until deeper attitudes have changed. A job guarantee is urgently needed if we want to preserve people’s livelihoods while at the same time rein in the ecological catastrophe driven by an economic system that relies on constant GDP growth.
The state as employer of last resort
The job guarantee calls for the national government to take up the role of ‘employer of last resort’ by providing the funds necessary to offer a uniform wage and benefit package to anyone willing and able to work. As for the question of how to finance a job guarantee, it is necessary to know that this policy is rooted in ‘Modern Monetary Theory’. This macroeconomic theory describes modern economies in which the national currency is fiat money established and created by the government. Its key insight is that a sovereign government is the monopoly supplier of its currency and it has an unlimited capacity to pay for the things it wishes to purchase and to fulfill promised future payments. And one of the things that a government may want to purchase is ‘idle labour’, meaning potential workers who cannot find work in the private sector.
The wage and benefit package of the job guarantee would act as a floor for wages throughout the economy.
In its role as employer, the government would gain increased say over the type of goods and services produced by the economy. In Degrowth: A Vocabulary for a New Era, the economist Brandon Unti argues that a job guarantee may offer a transitional path away from existing environmentally and socially destructive forms of production and toward a system organised around meeting fundamental social and ecological needs.
The most promising feature of the job guarantee is that it is not constrained by profit. Thus, it creates the possibility for people to earn a living outside the sphere of capital accumulation. And because work provided through the job guarantee involves production for use rather than exchange, it can be channelled toward environmentally sustainable projects and methods of production that will not and cannot be undertaken by the private sector. Workers under a job guarantee can be employed doing anything democratically deemed to be of social value, potentially broadening our conception of work to include things like caring for the elderly, habitat restoration, and community services. As such, a job guarantee is an open-ended policy tool that could complement, support, or incorporate any number of other proposed measures for degrowth.
The ecological case for being less productive
A job guarantee will improve working conditions in the private sector. With the option of taking up a government job always open to private sector workers, private employers would be forced to provide pay, benefits, and conditions at least on par with those offered by the state. The wage and benefit package of the job guarantee would act as a floor for wages throughout the economy. The state could also use the job guarantee as a way of shortening the working week. For instance, the state could initiate a four-day working week and, in so doing, pressure private employers to follow suit. This course of action would further facilitate achieving full employment in a degrowth economy. Because for everybody to have a job in an economy that does not grow, people will have to work less and employment will have to be redistributed. Working time reduction is, therefore, necessary for work-sharing.
in advanced economies at least, most GDP growth actually makes us poorer
The job guarantee would also be a useful strategy for reducing productivity. As argued by Unti, while low productivity may be a tough sell to economists, a job guarantee is meant to improve peoples’ lives and not to increase output. Since the objective of the programme is to provide jobs, job guarantee employment should be more labour intensive than private sector employment. The goal of reducing productivity stems from the assumption that production output is a good proxy for a society’s use of energy and raw materials.
Obviously, reducing productivity is not desirable in all fields of production. In any field where socially useful goods and services are produced sustainably, high productivity is a good thing. Additionally, high productivity may be desirable in any case where it reduces the time required to complete an onerous task without necessitating an increase in output.
Reducing productivity does not mean that certain technologies have to be abandoned. It can be achieved in any existing line of production by reducing the pace of production or the length of the working day. Low productivity can also be consistent with increased quality and durability of output. If Job-Guarantee-supplied work is geared toward producing the best rather than the most output, we can increase the lifespan of what we produce. By definition, goods of higher durability are used up more slowly. So, society could consume less while still maintaining the same stock of useful goods, which would simply be consumed at a lower rate.
An economy of care, craft, and culture
There are sectors of the economy where chasing productivity growth does not make sense. As argued by the economist Tim Jackson, certain kinds of tasks rely inherently on the allocation of people’s time and attention. The caring professions are a good example: medicine, social work, and education.
The time spent by these professions directly improves the quality of our lives. Making them more and more efficient is not, after a certain point, actually desirable. What sense does it make to ask our teachers to teach ever bigger classes? Our doctors to treat more and more patients per hour? The care of one human being by another is a ‘commodity’ that cannot be delivered by machines. The quality of care often rests entirely on the attention paid by one person to another. Even to speak of reducing the time involved is to misunderstand its value.
Craft is such an activity. The lasting value of crafted goods is derived in the accuracy and detail that goes into their creation. The same is true in the cultural sector: it is the time spent practicing, perfecting, and performing that gives art its enduring appeal. What would be gained by asking a musician to play a tune faster and faster each year? People often achieve a great sense of wellbeing and fulfillment as both producers and consumers of such activities. The time-poor and materialistic jobs in which most of our lives are spent, the ‘bullshit jobs’ theorised by anthropologist David Graeber, cannot be said to do the same.
Since care, craft, and culture activities are built around human services rather than the relentless outpouring of material stuff, they offer a chance to make the economy more environmentally sustainable. These are the sectors that should therefore be targeted by the job guarantee. Because what needs to ‘degrow’ in our society is the use of energy and natural resources, not the care we devote to each other, the craft we distill in what we are good at, or the culture that our societies collectively create.
As Robert Kennedy memorably declared in a speech at the University of Kansas in 1968, GDP “measures everything, except that which makes life worthwhile.” 50 years on, citizens have the right to expect their representatives to realise and admit that our growth is increasingly ‘uneconomic’. The environmental goods it creates do not compensate for the environmental ‘bads’ that it causes. It is just no longer worth it and, in advanced economies at least, most GDP growth actually makes us poorer. With this in mind, it is high time for true progressives in Europe to take up the fight for meaningful and ecologically sustainable full employment in a world without growth.