Degrowth & Modern Monetary Theory: Building Bridges for Socio-Ecological Sustainability and Justice

Abstract

This thesis seeks to forge a conversation between two schools of contemporary political-economic thought - degrowth and modern monetary theory. With today's urgent, multiple, and interlinked socio-ecological crises, the degrowth school of thought has become increasingly relevant. While the degrowth movement has proposed a range of policies and visions for a post-capitalist future, the structural growth imperatives of capitalist states make degrowth visions politically and economically challenging to realize. Thus far, degrowth policies that aim to weaken society's growth imperative and start building a post-capitalist society have largely been raised from the assumption that governments are limited in budgetary terms, implicitly informed by the hegemonic neoclassical economics lens. However, modern monetary theory (MMT) has recently permeated the public debate, offering an alternative take on public spending, deficits, and the government’s fiscal policy space. MMT argues that monetary sovereign states are not fiscally constrained in the same way that households and non-sovereign entities are - instead, the actual limitations to spending are the resources available to a given nation. Yet, MMT theorists give insufficient attention to ecological considerations, exemplified by their tendency to take continued economic growth for granted and overlook ecological limits, particularly from a global justice perspective. Using an Ecological Political Economy lens, this thesis initiates a conversation between the degrowth and MMT scholarship, finding that while there are both distinct tensions between the two schools, there are also many synergies and possibilities for further cross-fertilization between them within the normative goal of socio-ecological sustainability and justice.