Growth imperative
On the micro level, it describes mechanisms that force firms or consumers (households) to increase revenues or consumption to not endanger their income.
[1] While some search for purely "structural theoretical explanations for the commitment to growth",[12] others argue that this macroeconomic phenomenon must be examined at the micro level in line with methodological individualism to explain how and why individual actors (firms, consumers) act and how this interacts with collective structures, and correspondingly study the growth of enterprises with microeconomics and business administration and the increase of consumption using consumption sociology or consumer choice theory.
[1][13] The discussion on growth imperatives is part of a standing debate over the primacy of structure or agency in shaping human behavior.
[10][19][20][21][22] These definitions can be summarized that a growth imperative exists if exterior conditions make it necessary for agents to increase their economic efforts as to avoid existential consequences.
[3][35][36] However, the contribution of single production factors to economic growth has been disputed for decades:[1][37] While endogenous growth theory concentrates on the role of human capital (ideas, education, innovations),[38][39] proponents of ecological or environmental economics emphasize the importance of energy consumption as well as raw materials, which are often non-renewable resources (e.g. fossil fuels).
Accordingly, they would constantly invest in new resource-intensive technologies plus the human capital needed for development, which increases resource consumption and compensates advances in energy efficiency (rebound effects).
[46][47] Other authors call for institutional solutions: reforms of corporate law to overcome the legal constraint of public limited companies to maximise profits,[48] reforms of competition law to prevent externalisation at the expense of common goods,[49] or an institutional limitation of resource consumption and/or increasing their costs through ecotaxes or emissions trading (Cap and Trade), so that technical innovations would put a stronger focus on resource productivity instead of labour productivity.
However, whether these theories can actually justify a compulsion to increase consumption is disputed, as long as it is not a matter of securing one's livelihood (for example because of unemployment).
[50] Technical products such as vehicles, kitchen appliances or smartphones were used to save time and retain opportunities to earn an income.
Over time, these goods would become a necessity, therefore a compulsion to increase one's consumption expenditure could be derived in order to not be left behind technically and economically.
[66] Unemployment, which would occur in the event of technical progress and simultaneous lack of economic growth, is identified as a central problem (Okun's law).
[59] As a way out, a redirection of technological development with the help of resource taxes is discussed (ecotax, emissions trading),[48][70] but also a general reduction of working time to reduce unemployment.
[73] For a long time,[76] several authors especially from German-speaking countries[77] have been locating a macroeconomic growth imperative in the monetary system, especially due to the combination of credit money and compound interest.
[78][79][80] Some proponents of post-growth would derive a general criticism of positive interest rates from that and support ideas such as demurrage on currency, a concept from Freiwirtschaft,[76][81][82][83][84] or full-reserve banking.
[96][97] Those models show how repaid interest is not simply 'removed' from circulation, but flows back into the economy where it can be earned and repeated used to service debts.
[89] Accordingly, there would be no grow imperative "inherent" to the monetary system, but zero growth would be impossible as long as actors decide to continuously accumulate financial assets.
[95][99][102][103] In September 2018, more than 200 scientists asked the European Union to turn away from any growth imperative[104] – a similar demand was raised by the participants of the International Conference on Degrowth [de][105][106] and the post-growth working group of attac Germany.
