But the only long-term solution is that Europe needs to phase out fossil fuels and increase renewable energy production. And to do this fast enough to meet existing climate commitments it is necessary to reduce excess energy demand. Achieving this in a just and equitable way requires two things: first, reducing the purchasing power of the rich (who use extremely high levels of energy), and second, ensuring that everyone has guaranteed access to the essential goods and services they need to live a good life.
This forces us to confront a paradox at the heart of our economic system. Wealthy economies have high levels of production, with resource and energy use vastly exceeding sustainable boundaries, but they still fail to meet many basic human needs. This occurs because, under capitalism, the goal of production is not to improve well-being or achieve social progress, but to maximise and accumulate corporate profit. So we get plenty of SUVs, fast fashion and planned obsolescence, but chronic shortages of essential goods and services like public transit, affordable housing and universal healthcare.
Ecological economists argue that one of the best ways to deal with this problem is to establish universal public services. Public services mobilise production around human needs and well-being, and can deliver strong social outcomes with lower levels of resource and energy use. It also enables a more rapid, coordinated shift to more sustainable systems. By decommodifying and democratising key sectors such as food, mobility and housing, we can solve the cost-of-living crisis – by directly reducing prices – and help solve the climate crisis at the same time. This requires reversing the current tendency of neoliberal governments to defund and dismantle public services, which has led to the extraordinary crisis that is presently engulfing the NHS and the railways in the UK.
By Christopher Olk
No money is universally acceptable. What distinguishes special-purpose monies (SPMs) from national currencies is not the fact of geographical or institutional constraints on their acceptability as such, but the intentional imposition of such constraints as a design priority. This article integrates SPMs into the theoretical framework of the credit theory of money and proposes a novel typology of complementary currencies. In this view, any money is part of a global hierarchy of credit monies. The position of each money in that hierarchy depends on its liquidity, including the degree of commensurability and convertibility, and on the degree of sovereignty that backs it, including aspects of sovereignty that are based on monopoly power and social norms that have no necessary link to states. The position of national currencies in the global hierarchy can be assessed along the dimensions of liquidity and sovereignty. Along the same lines, four types of SPMs can be distinguished. Non-commensurable SPMs backed by some form of sovereignty and connected to public provisioning systems appear to be a more promising instrument than private convertible currencies for supporting effective sustainability transitions.
Degrowth lacks a theory of how the state can finance ambitious social-ecological policies and public provisioning systems while maintaining macroeconomic stability during a reduction of economic activity. Addressing this question, we present a synthesis of degrowth scholarship and Modern Monetary Theory (MMT) rooted in their shared understanding of money as a public good and their common opposition to artificial scarcity. We present two arguments. First, we draw on MMT to argue that states with sufficient monetary sovereignty face no obstacle to funding the policies necessary for a just and sustainable degrowth transition. Increased public spending neither requires nor implies GDP growth. Second, we draw on degrowth research to bring MMT in line with ecological reality. MMT posits that fiscal spending is limited only by inflation, and thus the productive capacity of the economy. We argue that efforts to deal with this constraint must also pay attention to social and ecological limits. Based on this synthesis we propose a set of monetary and fiscal policies suitable for a stable degrowth transition, including a stronger regulation of private finance, tax reforms, price controls, public provisioning systems and an emancipatory job guarantee. This approach can support broad democratic mobilization for a degrowth transition.