Education

BECOSD401 Lecture 40 An MMT Informed Degrowth Transition

by Modern Money Lab

📚 Main topics

Why a degrowth transition?Economic growth is strongly linked to resource and energy use, and current emissions reductions are not fast enough to meet climate targets. Growth’s benefits and environmental burdens are also distributed unequally, both within and between countries. 1:10
What degrowth meansDegrowth is a planned, democratic reduction in material and energy use that prioritizes equity and well-being, rather than GDP reduction as an end in itself. It also involves reshaping institutions and social arrangements so people’s needs can be met within ecological limits. 6:02
How MMT and degrowth complement each otherDegrowth highlights scarcity created by commodification and privatization, while MMT draws attention to the political nature of money and monetary scarcity. MMT also offers a framework for funding a transition without treating a shrinking tax base or public debt as automatic barriers. 10:52
Policy proposalsThe talk highlights taxing wealth and resource use, directing credit toward socially and ecologically beneficial sectors, a degrowth-oriented job guarantee, and universal public services. 17:55
Public services and price stabilityUniversal services can meet needs with less resource use than private alternatives and help stabilize living costs. The speaker connects this to energy-price inflation and examples such as public transit and social housing. 23:19

✨ Key takeaways

Ecological limits shape economic capacitySpending and productive capacity must be considered in relation to ecological limits, including the effects of economic activity on ecosystems’ ability to provide resources and absorb waste. 14:07
A job guarantee can support the transitionA degrowth job guarantee could shift work toward care, repair, renewable energy, and ecosystem restoration, while reducing working time and supporting macroeconomic stability. 21:44
Universal services can reduce resource usePublicly provided services such as transit, housing, education, and healthcare can make essential goods accessible while using fewer resources than comparable market-based provision. 23:19
Energy inflation calls for structural responsesCash transfers can help households cope with higher prices but do not stabilize prices themselves. The speaker points to measures such as windfall-profit taxes, price controls, and reducing dependence on fossil fuels. 27:01

🧠 Lessons learned

Decouple well-being from growthMeeting social needs within planetary boundaries requires more than efficiency improvements; it calls for changes to provisioning systems, institutions, and cultural assumptions about well-being. 6:37
Consider distribution in policy designTaxation, credit policy, and public services can be designed to address inequality while steering resources away from harmful activities and toward meeting needs. 18:28
Democratic governance mattersA transition requires collective decision-making, deeper forms of democracy, and consideration of how monetary and banking institutions can be democratically accountable. 30:48

🏁 Conclusion/next steps

Open questions for discussionThe speaker invites further debate on governance, monetary democracy, political resistance, geopolitical coordination, and relationships between the Global North and South. 30:48
Explore practical pathwaysThe examples of public transit and social housing illustrate possible steps toward accessible services and reduced fossil-fuel dependence, while raising questions about how to expand such approaches. 28:05

Transcript excerpt

0:01 everyone can see that now so the title of the talk is towards an mmt informed degrowth transition and I'll draw a good bit on the publication that Stephen mentioned um how to pay for saving the world modern monetary theory for uh a modern monetary informed degrowth transition um but oh there we go I am guessing that most of you have more of a background in mmt than in dth given that this is organized by modern money lab so what I would like to do first is offer a bit of context around

0:37 the the the what the why and then then we'll get to the how of degrowth uh and maybe for some of you this is this is redundant so you can you can tune me out for a few minutes and then then come back to it when we start to talk about the the complementarity between mmt and degrowth uh I'll talk about policy implications highlight a few key policies and then talk a bit about price stability and then we'll have a discussion so that is our our plan for the hour so first why the degrowth transition

1:10 and I'll just make a few points uh around what we've seen so far connecting growth with sustainability well-being and development so this is World material footprint um CO2 emissions and G GDP and what we see on a global level is that GDP is highly correlated to both resource and energy use and again this is global data there are of

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