Looking for growth imperatives under capitalism: money, wage labour, and market exchange

Louison Cahen-Fourot

No 01/2022, Working Paper Series from Post-Growth Economics Network (PEN)

Abstract: First, I update and wrap up the discussion on a monetary growth imperative, namely the argument that debt-money bearing interest triggers real GDP growth. I provide a detailed account of the different versions of the argument and show why none of them hold. In all cases, the argument is shown to be inconsistent in macro-accounting terms or to be at odds with the functioning of the monetary system. The general solution to the monetary growth imperative is that a sufficient share of wealth must be put back in circulation, for example via higher consumption out of wealth or taxation. Moreover, I show that a monetary growth imperative could equally well occur in an economy without debt-money or interest. However, the solution to the monetary growth imperative entails a sustainability paradox: more wealth put back in circulation allows to reach a stable full stationary state but may be environmentally unsustainable. I also highlight convergences between the critique of the monetary growth imperative and the monetary circuit literature. Second, I address the criticism that no net wealth accumulation is unrealistic. It requires to explain why there is accumulation in the first place. Building from post-Keynesian and institutionalist perspectives, I argue that we need to locate the analysis at the level of the definitional social relations of capitalism: market exchange and wage labour. Growth imperatives are emerging properties of these two social relations. I develop a critique of steadystate economics and underline the ontological difference between a zero-growth capitalism and a post-growth economy.

Keywords: growth imperative; capitalism; paradox of profit; ecological macroeconomics; post-growth (search for similar items in EconPapers)
JEL-codes: B52 E21 E24 E43 P1 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-fdg, nep-hme and nep-pke
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Citations: View citations in EconPapers (1)

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Working Paper: Looking for growth imperatives under capitalism: money, wage labour, and market exchange (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:penwps:012022

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