The Growth Paradox: A History of Sustainable Development

'Sydney, Australia - Thousands of Australian students gather for climate change protests'. Image by Holli, sourced from shuttersock. Stock photo id - 1244925499

Over the past three decades, the ‘sustainable development’ paradigm has become the authoritative program through which all major environmental policies are discussed, analysed and implemented. But discontent has been breeding since the paradigm’s conception in 1987,manifest in the conciliatory claim that economic development, social equality and environmental sustainability can all be nice and neatly achieved in a ‘win-win-win’ situation.

Now, with notions of a ‘circular economy’ (CE) or ‘circularity’ rapidly spreading from plastics to energy systems, a new environmental paradigm may be emerging. By taking a look at the content and context of growth movements in recent times, we can better understand emerging trends in environmental discourse.

Steady-state economy vs. Degrowth

The concept of a steady-state economy (SSE) is the most extensively developed alternative discourse to economic growth, appearing as early as 1776 in the writings of Adam Smith.2 In the modern period, ecological economist Herman Daly has become the leading figure in the SSE movement, with a prolific publishing record including the 1973 seminal textbook, Toward a Steady-State Economy. Essentially, Daly argues that a SSE can prosper through qualitative development, not quantitative growth.

On the other side of the debate is the de-growth (DG) movement, drawing from Nicholas Georgescu-Roegen (who was Daly’s mentor) and his vision for economics to be better informed by its ties to the natural environment, such as the exchange of energy and matter. Proponents of DG argue that human wellbeing can be maintained and improved without economic growth, and this can be achieved by spending less time consuming, producing and working.

While similar in ideas and political orientation, a largely theoretical debate occurred between SSE and DG proponents in the 1970s. Georgescu-Roegen claimed that SSE was practically impossible, based on its need for stationary levels of energy, matter, capital and population whilst simultaneously causing disorder in energy and matter through entropy. Daly responded by refining his theory, stating (ambiguously) that his conception of a SSE is “neither static nor eternal – it is a system in dynamic equilibrium within its containing, sustaining and entropic biosphere”.3

Notwithstanding theoretical differences, a productive conclusion that can be made of this debate is that SSE has the advantage of comprehensive theoretical development, while DG offers more attractive political currency.4

Subverting the growth question

The rise of sustainable development in the 1980s effectively settled this dispute in the political sphere, with growth concerns dismissed by the conciliatory promise that economic development, social equality and environmental sustainability can be achieved concurrently.Unsurprisingly, empirical evidence has not reflected this theoretical ideal, with global levels of carbon emissions and wealth inequality still reaching record highs in 2018 after decades of ‘sustainable development’.5 6

Now CE seems to be emerging as the new environmental program for tackling issues where sustainable development has failed. At a quick glance, it would seem that CE’s notion of a circular flow of resources would decrease the level of economic growth. But in fact the exact opposite is true; one of CE’s major principles heralds the ‘decoupling’ of economic growth from resource consumption.7

So rather than being framed as an alternative to growth, CE is yet another pro-growth idea, albeit often hidden under witty marketing. This is most clearly shown by the Ellen MacArthur Foundation, a UK-based charity promoting CE as a ‘new engine of growth’, or one that enables ‘growth from within’.8 9 More broadly, CE is now being adopted by businesses and governments in their strategic plans – something that both SSE and DG have failed to do.

The political economy of growth

A political economy perspective helps to answer the question of why CE is being adopted so widely by situating these growth discourses within their context – that is, a global capitalist economy predicated on neoclassical economic theory. Put somewhat simply, capitalism as it actually exists today consists of market actors and institutions that constantly seek profit, accumulate wealth and reinvest surplus back into the economic system, all whilst being supported by state policy and regulation.10 11 When this growth stops, as is evident during recessions, the economic system stops functioning as structured debts are written off, credit dries up, demand for goods and services fall, corresponding supply falls, and the growth machine stops churning away.

But rather than critically engaging with this theoretical and empirical reality, environmental movements often subvert the issue or simply brush it aside. Mainstream notions of sustainable development and the emergent CE idea subvert the issue at hand by promising more economic growth without any trade-offs. Even anti-growth discourses risk glossing over the issue by attempting to simply overturn an abstract ‘growth society’. As such, both mainstream and marginal movements fall into the trap of “losing all historical perspective and discarding centuries of social science”.12

So, what can be done?

Firstly, mass social awareness and action is a precursor to generating the social, economic and political power necessary for change. In this sense there are promising signs from all over the world. Just take developments in the past month – thousands of Australian high school students holding climate change protests, or on the other end of the spectrum, a massive popular revolt in France “with an interest in the violent overthrow of capitalism”.13 14

Importantly, mass movements must be accompanied with institutional and policy reforms for them to have any concrete impact. In the past, SSE and DG reforms largely emphasised redistribution, social security and decentralisation as ways to achieve their goals. More concrete contemporary policy examples include environmental taxes, universal basic income, and labour policies that allow for lower productivity (god forbid!) and increased employment in socially-beneficial employment, such as health and education. 15

Throughout history, radical anti-growth movements have been watered down, subverted, or challenged directly to neutralise their potential. The sustainable development paradigm was, and still is, a clear example of this. Now, with the rise of an emergent CE paradigm that promises ‘full circularity’ as a solution to our existential crisis, this phenomenon is more relevant and dangerous than ever.16


1. United Nations. (1987). Report of the World Commission on Environment and Development: Our Common Future. Oxford University Press.
2. Centre for the Advancement of the Steady State Economy. (2018). Steady State Economy Definition. Retrieved from Centre for the Advancement of the Steady State Economy: https://steadystate.org/discover/steady-state-economy-definition/
3. Daly, H. (2007). Ecological Economics and Sustainable Development, Selected Essays of Herman Daly. Edward Elgar Publishing.
4. Perez-Carmona, A. (2013). Growth: A Discussion of the Margins of Economic and Ecological Thought . In L. Meuleman, Transgovernance: advancing sustainability governance . Heidelberg: Springer.
5. Canadell, P., Le Quéré, C., Peters, G., Andrew, R., & Jackson, R. (2018, December 6). Carbon emissions will reach 37 billion tonnes in 2018, a record high.
6. Institute for Policy Studies. (2018). Global Inequality . Retrieved from Inequality.org: https://inequality.org/facts/global-inequality/#global-wealth-inequality
7. McKinsey & Company. (2015). Europe’s Circular Economy Opportunity . McKinsey & Company.
8. Ellen MacArthur Foundation. (2013). Towards the Circular Economy. Ellen MacArthur Foundation.
9. Ellen MacArthur Foundation. (2017). Achieving ‘Growth Within’. Ellen MacArthur Foundation.
10. Kallis, G. (2011). In defence of degrowth . Ecological Economics, 873-880.
11. Harvey, D. (2005). A brief history of neoliberalism . New York: Oxford University Press.
12. Foster, J. B. (2011). Capitalism and degrowth: An impossibility theorem. Monthly Review, 26-33.
13. ABC. (2018, December 1). Students strike for climate change protests, defying calls to stay in school .
14.  The Economist. (2018, December 8). Emmanuel Macron’s problems are more with presentation than policy .
15. Kallis, G. (2011). In defence of degrowth . Ecological Economics, 873-880.
16. Innovators Magazine. (2018, April 14). H&M moving to ‘full circularity’ .

Wynston Lee is a Master of Political Economy student at the University of Sydney. His thesis will analyse the economic theory underlying the circular economy with an empirical focus on China’s import ban on recycled goods and its impact on Australia. Wynston completed a Bachelor of Commerce at the University of New South Wales and has experience working for corporate, startup, non-profit and academic organisations.

This blog post is a part of the SEI’s Student Blog Series, which features original content by Honours, Masters and PhD students at the University of Sydney who are undertaking research on environmental issues and topics. If you are a current postgraduate student at the University of Sydney who would like to participate in the series, click here for details.