Growth, Degrowth, and Relative Decline

How competing definitions of growth are shaping contemporary economic debate

There are currently two growth debates occurring simultaneously. One is about the need for economic growth (this is particularly pertinent in the UK); the other is about reducing it (degrowth).

The latest intervention urging the necessity of growth was an essay by former British Prime Minister Tony Blair, who came out strongly arguing that ‘the priority is growth’, with a focus on productivity growth, technological growth and innovation-led growth, particularly AI adoption. He argues against clean energy policies that increase the cost of energy because he sees this as conflicting with growth.

On the other side, the argument is that it is growth that has caused so many environmental and social problems. This is evident from degrowth thinkers such as Timothée Parrique in his book Slow Down or Die. For Parrique, the issue is capitalist economic systems have negative side effects that are harmful to the planet and to society. Another contribution to this debate is the recent Global Justice Report , while not explicitly embracing degrowth, advocates for ‘targeted sufficiency’ and argues that this ‘can be more effective than aggregate degrowth’.

Economic growth has returned to the centre of political debate yet participants in these debates often mean very different things by the term and refuse to speak with one another directly. For some, growth means productivity, innovation and rising living standards. For others it means increasing resource use and environmental pressure. The result is that people appear to be debating the same issue while talking about different things. For Blair the problem is a lack of growth; for Parrique the problem is a growth-orientated economic system.

Debating Growth

In the first debate, which has erupted in the past few weeks, the focus is on the apparent relative decline of Europe relative to the United States (e.g., see post by Luis Garicano and Oliver Kooi). This debate is primarily a Substack/Project Syndicate affair with a back and forth over what is the best way to measure economic growth and welfare (see original post Paul Krugman post). The debate has centred on whether Europe is genuinely falling behind the United States and how best to measure that decline. While participants disagree about the correct metrics, few dispute that economic performance has diverged in recent decades.[i]

Meanwhile, for the degrowth debate, this centres on the desirability of economic growth as a policy objective. In this view, economic growth, as measured by GDP, implies increasing resource use and emissions. This has turned into a burgeoning industry in Europe (the continent that is degrowing according to the first debate), but there is no consensus in this literature. Recent systematic reviews that appeared in Ecological Economics have provided confusing signals about the direction of the literature (see a review of the reviews).

This has not stopped degrowth researchers, with notable contributions last year from Timothée Parrique as well as some high profile papers in some high profile places. For example, a paper in The Lancet Public Health. The degrowth perspective has also helped inform the recent UN High Level Expert Group report called Beyond GDP. So it is a live policy debate.

The problem is that the two sides often mean different things by growth. Growth is not the indiscriminate expansion of all economic activity, nor does it necessarily imply greater resource use. At its simplest, growth refers to an increase in the value of goods and services produced in an economy. Historically, the most successful episodes of growth have often involved producing more value with fewer inputs through innovation, technological change, and improvements in efficiency. Doing more with less is economic growth.

Assessing public support for growth and degrowth

A study in The Lancet Public Health argued that there was widespread public support for degrowth. The central claim rests on a definition that collapses the analytical distinction between degrowth and growth. “Degrowth” is defined as “reducing harmful and non-essential production in high-income countries while prioritising wellbeing, ecological sustainability, democratic control, and global equity”.

But economic growth refers to rising aggregate value added, not indiscriminate expansion of all activities, and has long been justified precisely by its capacity to raise wellbeing and support social objectives. Modern growth frameworks emphasise structural change, efficiency, and the reallocation of resources away from damaging or low-value uses. The idea of “doing more with less”, achieving higher welfare with fewer resources, is a canonical statement of desirable growth, not its negation.

This muddling of concepts is reinforced by the survey instrument. The study’s “full degrowth proposal” combines widely supported social and environmental objectives into a single composite description. Respondents were therefore not asked to evaluate “degrowth” as an economic trajectory involving constraints, trade-offs, or sustained contraction, but rather a normatively attractive policy bundle. Reported support plausibly reflects endorsement of the constituent goals rather than acceptance of economic contraction per se. By omitting any requirement for declining aggregate output, income, or GDP, the paper redefines degrowth so that it no longer entails degrowth, then claims public support for it!

What do people think they know about growth?

In the Lancet paper, the UK and USA were framed as comparable “growth-oriented” economies. Although both the UK and the USA are high-income and historically emissions-intensive, their recent growth experiences diverge sharply: the USA has seen sustained expansion since the Global Financial Crisis, whereas the UK has undergone prolonged stagnation, declining real incomes, and episodic output contraction.

UK respondents are therefore not evaluating a hypothetical transition away from growth, but responding from within an economy that has already experienced elements of de facto degrowth. High reported support in the UK may thus partly reflect adaptation to stagnation rather than endorsement of a deliberate degrowth transition.

The high support for degrowth reported in the Lancet study sits uneasily with evidence that most Britons are dissatisfied with the UK’s recent economic performance and favour stronger growth. The subsequent slowdown in UK economic growth is widely understood to be associated with policy choices deliberately adopted by the British government; for example, Brexit.

Figure 1 Trend growth in the USA and the UK, 1960-2024

Note: Data from WDI; trend based on Hodrick–Prescott filter

Figure 2 GDP per capita in the USA and the UK (USA=100)

Source: Maddison database.

The assertion that degrowth is “increasingly seen as essential to tackling climate change” carries significant moral as well as analytical implications, yet it is not supported by the mainstream climate economics or policy literature. Aggregate economic contraction is neither necessary nor sufficient for decarbonisation. Emissions reduction depends on transforming energy systems, technologies, and incentives, not on suppressing output. Periods of stagnation or contraction have historically reduced emissions only temporarily, without generating the sustained structural change required for long-run mitigation. Presenting degrowth as “essential” therefore converts a contested normative position into an empirical claim. The historical record points elsewhere. Major reductions in resource intensity have generally come from innovation, technological change and institutional reform, not from economic contraction.[ii]

Finally, the claim that degrowth constitutes an equitable climate strategy is deeply problematic. Although the authors frame degrowth as a project for high-income countries, this distinction is conceptually unstable. Degrowth is advanced as a response to global climate change and planetary limits, yet its economic constraints are treated as geographically contained. In practice, constraining growth in high-income economies has global implications for trade, investment, fiscal capacity, and technological diffusion, all of which shape development prospects elsewhere.

For much of the world, economic growth remains a prerequisite for health, education, infrastructure, and state capacity. Framing degrowth as a normative endpoint for affluent societies while asserting its global necessity risks implying limits on the developmental aspirations of poorer countries, many of which have contributed little to cumulative emissions. A credible climate strategy must therefore distinguish clearly between reducing wasteful consumption in rich economies and preserving the developmental space required for poorer countries to grow. Degrowth, when presented as a generalised response to planetary crisis rather than a narrowly defined critique of affluence, fails this basic test of equity.

What do people actually know about growth ?

The Lancet paper suggests widespread support for degrowth. Yet, recent evidence from Britain points in a rather different direction. A large survey of 3,001 people conducted in January 2026 by the Institute of Economic Affairs found overwhelming support for economic growth among British voters, albeit coupled with considerable confusion about what growth actually means.

Contrary to the impression sometimes given by academic and activist debates, there is little evidence that the British people have been persuaded by degrowth rhetoric. The overwhelming majority of respondents to the IEA’s survey believed the UK should place greater emphasis on economic growth (87%) and viewed the economy’s recent performance negatively. Yet the survey also finds that support for growth coexists with a surprisingly weak understanding of what growth actually means. Many respondents struggled to define GDP, explain what politicians mean when they talk about growing the economy, or identify the mechanisms through which higher productivity and investment translate into rising living standards. Growth is popular, but often as an aspiration rather than a clearly understood economic process.

Perhaps the most interesting finding concerns Britain’s sense of relative decline. While respondents were pessimistic about the economy, they substantially overestimated the UK’s prosperity relative to comparable countries and the United States. When presented with evidence of Britain’s weaker international position, many reacted with shock and even embarrassment.

The authors argue that this gap between perception and reality creates an opportunity for advocates of economic reform. Yet the survey also reveals a deeper tension. Britons want stronger growth and recognise that the economy is underperforming, but they remain sceptical about who benefits. Many believe that economic gains accrue primarily to government, large corporations and the wealthy rather than to ordinary households. The challenge for any growth agenda, therefore, is not convincing people that growth matters, but rather demonstrating that growth can deliver tangible improvements in their own lives.

People simultaneously want growth, feel Britain is in decline, underestimate the scale of that decline, and are unsure what growth actually means. Perhaps this helps explain why debates about growth have become so confused. Politicians, economists, degrowth advocates and voters are often using the same word to describe very different things.

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[i]There is a lack of consensus because of the different benchmarks that people are using. Krugman’s riposte to this was to highlight GDP in current price PPP. This was criticised by Pieter Garicano and Luis Garicano, who argued that the correct measure for comparison is a constant PPP adjustment. This is a debate all too familiar to economic historians, and the consensus has been to follow the constant PPP along the lines of Angus Maddison.

[ii] Work associated with Joel Mokyr emphasises technological innovation, knowledge accumulation, and institutions that support experimentation as the basis for lasting reductions in resource intensity. Meanwhile, research by Daron Acemoglu, Simon Johnson and James A. Robinson highlights the role of inclusive institutions and policy in directing technological change. Neither body of work suggests that economic contraction facilitates the scale of investment, coordination, and innovation required for rapid decarbonisation.