This might be interesting for your discussion. This study was just recently published by Ella von der Haide, an Urban Developer with focus on urban gardening and free space in cities.
This is an interesting paper that well-fulfills its mission to "stir": it seems to have a good diversity of points with which readers may disagree. Here are a few that stirred me:
1. It seems like a better idea to examine the connection between growth and revenues of social security (SS) programs critically than to take it for granted. In fact, there isn't any necessary connection. GDP is based in large part on income flows between private actors, or from the government to private actors, and private actors don't fund SS directly. What does fund SS is *contributions* to government-run programs. Contributions are a function of many things, including, among other things, (a) size of the working population, (b) wage levels, and (c) the statutory/regulatory table of contribution rates. It's an *assumption* that economic growth increases (b) and possibly (a) as well, but neither necessarily happens. For example, certain types of economic growth can preferentially increase income in the very wealthy, but in some countries there isn't any obligation to contribute to SS for income above a certain threshold ($117,000 in the US as of 2014); in other words, variable (c) is more important than many people recognize. There may be more variables at play than the three I've named -- but it's important to understand them in order to have more options for fashioning solutions compatible with de-growth.
2. The idea that financial profits and losses are closely related to economic growth seems a bit outdated. Financial profits and losses are based on psychology, and the volume of trade in physical goods and services is only one input of many into market psychology, like an election or a war. The annual volume of trading on equity markets alone has been nearly equal to or even in excess of global GDP for a number of years, even post-2008 (in dollar equivalents, it was 100.3% of global nominal GDP in 2013, based on stats from World Federation of Exchanges and Total Economy Database); in the US, NYSE and NASDAQ volumes combined are a several-times-multiple of USD GDP. On those markets, price movements aren't necessarily related to operating performance of an issuer; e.g. Apple, Microsoft and other companies can see their prices move downward despite billions of dollars in quarterly profits. More important is whether the reported results (using an arcane form of accounting specific to investor reports) conform to analysts' expectations: psychology again. And that's saying nothing about the gains made from other financial investments. None of the gains from such transactions are included in GDP. As inequality in capital distribution grows, finance will be even more and more distanced from growth, since wealthy investors will eventually be able to make gains (not just turnover) at scales comparable to GDP -- and they won't necessarily plow all of that back into consumption. Nor will they necessarily be interested into investing in public schools, hospitals, or other public goods.
3. "Institutionalizing non-commercial kinds of work" can easily be adapted to a neoliberal program of dismantling government and throwing people back onto their own resources. E.g., the phrase aptly captures the spirit of Japan's thoroughly neolib 1998 NPO Law. So one has to be quite careful how one uses this phrase as a rallying point for action. Also, isn't the notion of time-banking systems where contributors have a right to demand services in kind awfully reliant on there being adequate supply? By hypothesis, many of the clients of such non-commercial work will be children, elderly, sick or disabled. Most won't be able to contribute to a time-bank. How does one assure that a time bank wouldn't turn into a group of exhausted care-givers without recourse but to demand time and services from each other?
4. Finally, one perspective not stressed in the paper is that SS issues are interconnected to work, family, demographic and other issues, and that solutions to them might be synergistic -- and very local. For example, Japan has a declining birth rate, a declining working population, and a declining general population, together with long life expectancy. Culturally, many people want to work past official retirement age, and are often healthy enough to do so into their late 60s and even early 70s. Postponing retirement age (and onset of SS payment eligibility) could be combined with shorter working hours for men and women, improved daycare for children and other policies (even relating to urbanization and preservation of regional cities) that make it easier for families to be able to raise children. That could ultimately halt the decline in birth rate, and, within less than two decades after that, create a stable working population, leading ultimately to a more balanced age distribution throughout the population. Of course, countries like the US or France that have growing populations will need a different approach. In all cases, though, government policies could be tailored to encourage more directly-related results, instead of trying to encourage economic growth by any means and hoping some invisible hand will take care of the rest. But looking to fix SS by focusing only on investors, or costs of SS-related services, or economic incentives to promote health-related behaviors, or other very proximate items of revenue and expense, will distract one's view from more holistic opportunities.
Here's an inspiring video from the recent eviction resistance at Grow Heathrow - a squatted community garden and transition style project, which is also resisting airport expansion.
Could projects like this be part of a transition towards a degrowth city?
Hello,
my name is Andreas Siemoneit, I would like to introduce myself as facilitator of the GAP group on Social Security. I’ve got degrees in physics as well as business engineering and I am working since 17 years as consultant and software developer for enterprise software (enterprise resource planning systems). Since more than three years I am deeply involved in the degrowth debate in Germany, studying privately for the third time in my life, this time the subject of „Sustainability“. I am active mainly in the German Society for Ecological Economics (VÖÖ), in the board of Förderverein Wachstumswende (who is running the social network wachstumswende.de) and in the German Green Party.
I am interested in the subject of Social Security since many years, because I regard the Social System in Germany as unjust and inefficient already today. As Kerstin Hötte wrote correctly in her stirring paper and as Angelika Zahrnt and Irmi Seidl have shown in the book „Postwachstumsgesellschaft“ they have edited, the debate about social security is crucial for degrowth (by the way: Attached you find a summary of this book, in German only).
As a facilitator of the GAP group, my job is primarily to enable the participants to discuss productively and less to take part in the discussion myself. But I would like to make some remarks on the discussions made so far.
Two more general remarks:
- Social security systems are IMO not so much dependent on growth but rather on full employment. The main problem of most countries is the relatively high unemployment rate, leading to more people needing financial support from the system and less people financing it. Only capital-based pension systems are dependent on growth, but that’s more psychological, because people are simply used to get high interest rates. They could be quite low in a degrowth society, and saving money would then be no more than keeping it instead of making it grow. The expectation of high interest rates is IMO not a systemic growth force.
- Saving money is quite problematic beyond the expectation of interest, because a current claim for goods and services is put aside and brought back into the economic circulation later – sometimes decades later. Only when the amounts saved in total are about the same all the time (constant savings) the effect is neutralized. Spoken in terms of economic achievement, every pension system is a pay-as-you-go system, because the old age pensioners receive their benefits always from the currently productive people, no matter which way the system is funded.
Toward the discussion expecting us:
- I regard it as problematic to discuss the social security systems of a degrowth society too detailed, with concrete instruments or already concrete figures, because wether these policies will be viable in the future is dependent on too many factors beyond today’s fantasy. I would regard it to be more fruitful to discuss the principles of a just social security system instead. In fact, talking about social security is talking about justice, and for me this discussion is quite independent from growth/degrowth questions, because as long as people are working productively there will be enough money to finance some kind of social security system.
- For the old age pension system this could be for example: How much sense does a fixed age limit make? In which way should the contributions made by people during their productive work life reflect their claim to the height of their pension? How shall times of reproductive work count for pension claims?
- For unemployment insurance this could be for example: Will this branch of social security still play a role as important as today, when in a degrowth society there might be less unemployment because of less (highly consumptive) technical rationalization of work? Are thoughts about a general reduction of working time realistic?
- For the health insurance system this could be for example: Is it acceptable that sick people pay the same premiums like healthy people (as it is in Germany today), or do we have to make them pay more to give incentives for a healthier lifestyle (take for example a well payed employee who suffers from a sports injury)? How do we handle the frequently increasing costs of medical (technical) progress? Is some kind of rationing necessary, and if: How?
See you soon at the discussion!