Now progressives want to shrink the global economy

OPINION:

Humanity is at risk of multiple Armageddons.

Climate change, new strains of COVID-19, influenza and other viruses, President Vladimir Putin’s madness and China’s Pacific ambitions threaten severe weather, droughts, coastal flooding, non-navigable rivers, disappearing island nations, mass migrations, fractured global supply chains, lost access to commercial fertilizer, famine, more extreme poverty and world war.

Enter stage left the degrowth movement. It is critical of modern economics for associating human progress with growth in the gross domestic product and argues that climate change and poverty could be better addressed by shrinking the global economy — by perhaps a modest 0.5% a year.

This does not stand up against the experiences of market economies and the geopolitical challenges democracies face from autocracies — China, Russia, Iran, Saudi Arabia and others.

From 2005 to 2019, developed countries enjoyed GDP growth and substantially cut CO2 emissions.

Green electricity will prove more expensive than fossil fuel generation because even when it can be had cheaply, it requires expensive fossil fuel and battery backups to cope with heat waves that slow windmills and cold weather that taxes grids. All that will get worse as heat pumps replace gas furnaces and electric vehicles replace internal combustion engines.

EVs are more expensive to produce because their batteries and electric motors require lots of lithium, copper, cobalt and other metals. Global capacity to produce those is often in politically and geographically awkward locations — the Congo, Latin America and China.

Without growth, adopting those technologies will require dramatic reductions in standards of living already pressed down by inflation, trade sanctions on Russia and decoupling from China.

If the pathogens that attack mankind were stagnant, at some point we would have all the vaccines and medicines we need. But they are not, and quickly producing the treatments required to combat new iterations of COVID-19, other viruses and bacteria is costly.

Even with NATO devoting over $1 trillion a year to defense, Russia, China, Iran and others are spending enough to create mischief that could end badly for democracy.

Unless we surrender to disease, capitulate to dictatorship, abandon our liberties and let millions of others die or be enslaved, the United States and its allies must spend more money and manpower, not less, on health care and defense. That will require economic growth to be politically palatable.

Social and economic justice politicians are not buying into warnings about the dangers posed by rising autocratic power. Those views are not popular in the wider Democratic Party. But if the U.S. and other rich countries undertook to shrink their economies to lower emissions, the left would likely enjoy success in imposing dramatically redistributive taxes on income and wealth to meet public health and security challenges to avoid impoverishing the bottom half of their populations.

Generally, the degrowth movement advocates smaller homes, eating less meat and more leisure — activities whose benefits simple GDP accounting does not capture. But indicators of well-being like infant mortality and leisure time improve as per capita incomes rise, and those are dividends of free market dynamics.

Slicing GDP without losing ground would require abandoning capitalism and markets for state planning. It’s doubtful personal liberty and democracy could survive all that, and autocracies and countries sympathetic toward them — like China and India — are burning more coal these days, not less.

The degrowth folks are remarkably silent on realistic policy prescriptions for downsizing advance industrialized economies while leveling up the poor in the developing world.

That process would require much more than a 0.5% per annual downshift in Organization for Economic Cooperation and Development  GDP, while enabling developing countries to continue growing to improve the conditions of the poor, purchase CO2 abatement technologies and mitigate against coastal flooding and unbearable heat.

Developing access to technology and growth are dependent on trade with and the growth of industrialized countries, but degrowth activists correctly point out that much north-south trade is based on resource extraction.

Weaning from that commerce would require fewer developing country imports of food from places like Ukraine and North America and prodigious developing country producers like Brazil, less dependence on commercial fertilizer produced from natural gas and mined potash from places like Russia and Canada and massive donations of CO2 abatement and mitigation hardware from richer countries.

With developed countries shrinking their economies, expecting such generosity would be naive, and alternative food supplies through sustainable local agriculture is a nostalgic fantasy.

Before the Industrial Revolution, per capita growth was very slow — perhaps 0.2% or 0.3% a year even with late Middle Ages innovations like the three-part plow and horse harness — but in 1800, the global population was only 1 billion.

Today, with a global population of 8 billion, it is ludicrous to think developing countries could produce enough food relying on cow dung fertilizer. Anyway, cattle exhale CO2, and the degrowth folks might like us all to become vegetarians.

• Peter Morici is an economist and emeritus business professor at the University of Maryland, and a national columnist.