Less is More: How Degrowth Will Save the World

by Jason Hickel

Here’s how it works. Imagine you’re an investor. You want returns of, say, 5% per year, so you decide to invest in Facebook. Remember, this is an exponential function. So if Facebook keeps churning out the same profits year after year (i.e., 0% growth), it will be able to repay your initial investment but it won’t be able to pay you any interest on it. The only way to generate enough surplus for investor returns is to generate more profit each year than the year before. This is why when investors assess the ‘health’ of a firm, they don’t look at net profits; they look at the rate of profit – in other words, how much the firm’s profits grow each year. From the perspective of capital, profit alone doesn’t count. It is meaningless. All that counts is growth.