The scientific research piles up that climate change is going faster than anticipated. The world population is growing and, thus, our consumption and carbon emissions. Even without population growth, a capitalist economy must keep growing to deliver a return on investment. How can we turn around before we reach an irreversible tipping point that renders the earth unlivable? Should we aim for degrowth? Should we hope for technological fixes? Let’s find out what Jason Hickel has to say in his book “Less is More – How Degrowth will save the World”.
First, who is the “we” aiming for degrowth or technological fixes? Governments make laws that aim to diminish negative side-effects of the economic growth that is necessary for return on investment. But not one state or corporation is in charge of this global capitalist economy. Let alone individual citizens, or smaller companies, and we, as leaders, consultants, coaches, and executive teams. What should we do?
Do we continue with business as usual, simply because the ecological challenges are so overwhelming and beyond our direct control? Because we see no viable alternatives right now? Is that why we are waiting until “they” come up with technological solutions? Is that why many organizations are waiting for legislators, innovators, and the competition – to see what they will do?
Do we fear losing market share more than losing ecosystems that will keep our grandchildren alive? And is that even true – will we lose market share? What if we make money while transitioning into sustainable products and services? I’m not talking about greenwashing but about real sustainability and innovation. About organizations becoming net-zero with their carbon emissions, maybe even net-positive with contributing to the future.
Climate change is a strategic topic, but do we discuss it enough in our executive teams and boards? Could this be the biggest taboo in organizations right now?
So many questions! I have been reading, watching documentaries, and taking courses to educate myself. The topic is relevant and urgent for every person and business. What can organizations do? What do our global challenges mean for leadership, organizational culture, organization development, and change?
In this post, let’s look at a book that may not be embraced by organizations designed to make as much profit as possible. Yet, there’s always something to learn. Openness to new ideas is a feature of agile, learning organizations that we need to become future-proof. What can Jason Hickel’s book offer leaders, organizations, and consultants?
A few facts about climate change
Hickel starts with the proof that we are living in a world that is ill, or, as he states “We are living in a world that is dying.”
Future generations will look back on us and marvel at how we could have known exactly what was going on, in excruciating detail, and yet failed to solve the problem.
I’m not going to repeat all the proof here, you can read it in trustworthy media and the IPCC reports, and in Hickel’s book. Just a few facts:
- The number of extreme storms that happen each year has doubled since the 1980s.
- Rising temperatures have also triggered deadly heat waves.
- Scientists say that for every degree we heat the planet, the yields of staple cereal crops will decline by 10 %.
- Forests are critical to our planet’s circulatory system; they are like giant hearts that pump life-giving water around the world. As forests die off, droughts become more common.
- Ice sheets can disintegrate not in centuries but decades – perhaps as little as twenty to fifty years. If this plays out, the West Antarctic ice sheet alone could add another meter or more to sea level rise, in our lifetime. Kolkata, Shanghai, Mumbai, and London – all would be swamped, along with much of the world’s economic infrastructure.
Should we review our story?
Hickel then explains how one story founded our culture. This story of science, individualism, and capitalism taught us to see ourselves not as part of the ecosystem, but as the rulers of the ecosystem that can use natural resources in every way we see fit. Consequently, as rulers, we take more than we give.
“We’ve been taught to think of ourselves – as individuals. We’ve forgotten how to pay attention to the relationships between things. Insects necessary for pollination; birds that control crop pests, grubs, and worms essential to soil fertility; mangroves that purify water; the corals on which fish populations depend: these living systems are not ‘out there’, disconnected from humanity.”
Capitalism is fundamentally dependent on growth. If the economy doesn’t grow it collapses into recession: debts pile up, people lose their jobs and homes, and lives shatter.
The global ecological breakdown is being driven almost entirely by excess growth in high-income countries, and in particular by excess accumulation among the very rich, while the consequences hurt the global South, and the poor, disproportionately. Ultimately, this is a crisis of inequality as much as anything else.
So, now what? It looks bleak and we might feel stuck! Hickel says: If we want to keep global warming under 1.5°C or even 2°C, high-income countries must actively reduce excess resource use and energy use.
In a post-growth economy, some of this can be done through efficiency improvements. But we also need to scale down less necessary forms of production. This is called ‘degrowth’ – a planned reduction of excess energy and resource use to bring the economy back into balance with the living world in a safe, just, and equitable way.
Hickel states we can do this while at the same time ending poverty, improving human well-being, and ensuring good lives for all. Indeed, that is the core principle of degrowth.
Societies need to have a dialogue and agree on what we need to increase, for instance, clean energy, public healthcare, essential services, and regenerative agriculture. And also, on what is less necessary, for instance, fossil fuels, private jets, arms, and SUVs.
Yes, Hickel has a radical way of thinking. But shouldn’t we discuss these ideas in board rooms, executive teams, and other teams in organizations? This is an exploration of a possible future. What might the implications be for your organization? Is your industry sector future-fit? What do investors, clients, and employees think…? What do you think, when you imagine the future world that your grandchildren may be living in?
The Story of Capitalism
Hickel offers a historical overview of the rise of capitalism and technology, based on the story that we are the masters of nature. The power of technology is that it enables capital and labor to be more productive – we can extract nature’s resources faster – and you can see this acceleration reflected in the breathtaking speed at which Gross Domestic Product (GDP) has shot up.
You may say that capitalism is just about people buying and selling things in the market. But this is not the whole story. Under capitalism, it’s not enough to generate a steady profit. The goal is to reinvest that profit to expand the production process and generate yet more profit than the year before.
That’s different than a local small business around the corner. A small shop makes a profit at the end of the year, but the owners may be content with more or less the same profit year after year: enough to pay the rent, put food on the table for their family, and continue their business in a steady state.
A corporation doesn’t operate according to this steady-state approach. They need to extract more profit each year than the year before, to guarantee their investors a return on investment. Profit becomes capital. If they fail to grow then investors will pull out and the firm will collapse. The choice is stark: grow or die. And this expansionary drive puts other companies under pressure, too. Suddenly no one can be satisfied with a steady-state approach; if you don’t push to expand, you’ll get gobbled up by your competitors. The global economy has typically grown at about 3 % a year. This is what economists say is necessary to ensure that most capitalists realize a positive return.
If you keep growing, 3% growth year after year, you get compound growth: the economic output will double every 23 years – by the end of the century the economy will be twenty times bigger.
The global economy is worth over $ 80 trillion, so to maintain an acceptable rate of growth capital needs to find new investments worth another $ 2.5 trillion next year. That’s the size of the entire British economy.
This focus on GDP growth – growthism – changed the way that Western governments managed their economies. Countries need money for public investments (they issue bonds) and they need corporations to offer work to their citizens so they can collect taxes. That’s why governments made things easier for capital during the neoliberalist area. They issued labor laws to drive the cost of wages down, they became easier about environmental protections and privatized public assets (opportunities for private investors).
In a globalized world where capital can move freely across borders at the click of a mouse, nations are forced to compete with one another to attract foreign investment.
Hickel says: It’s not growth that’s the problem, it’s growthism: growth for the sake of capital accumulation, rather than to meet concrete human needs and social objectives.
Growthism and the environment
Scientists estimate that the planet can handle a total material footprint of up to about 50 billion tons per year. Every ton of material that’s extracted from the earth has an impact on the planet’s living systems.
Why are we burning through so much fossil fuel in the first place? Because economic growth requires energy. Currently, GDP growth is driving total energy demand up at such a rapid pace that new fuels aren’t replacing fossil fuels, they are added on top of them.
Another issue is that the wealth of the world is not equally divided. Most global South countries need to increase resource use to meet human needs, while high-income countries need to dramatically reduce their resource use.
In a bleak scenario, GDP might continue growing even as social and ecological systems begin to collapse. Capital will pile into new growth sectors like sea walls, border militarization, Arctic mining, and desalinization plants.
Or you can make a profit and grow GDP with green, sustainable products and services. That sounds nice, but it still means growth, consumption, and energy and resource use…
The question is: How can we slow down and still earn a living with our businesses?
Hickel says: We must choose to limit growth. We need to reorganize the economy so that it operates within planetary boundaries.
If you reflect on this with your team – what are some possibilities? Future-fit organizations are forward-thinking. Though we all operate in a capitalist system and we can’t change that overnight:
- What could degrowth mean for your organization?
- Is climate change a taboo in your culture? And degrowth? How can you talk about these topics with your team?
- How to cope with possible consequences of climate change and degrowth as a person and as an organization?
- In what ways can you provide sustainable added value to your customers?
- In what ways can you transition to a net-zero organization?
- In what ways can you transition to a steady-state organization where all members earn a living and provide value?
Just some questions… Thinking about these topics with your team means preparing for the future and building your resilience skills. Is your organizational culture forward-thinking, open to new ideas, agile and ready to change if necessary?
If a respectful dialogue is impossible, your first step building dialogue skills. Dialogue breeds alignment and increases your organizational intelligence. It’s part of a future-fit organzational culture.
© Marcella Bremer, 2023
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