Degrowth does not mean recession or neoliberal austerity. Rather, it means the planned and democratic contraction of ecologically destructive forms of production and consumption in wealthy societies, combined with redistribution of wealth and power, appropriate relationship with technology, and richer non-consumerist forms of life. Affluent and over-developed societies cannot indefinitely expand their use of energy and materials on a finite planet. Therefore, degrowth is needed for justice, sustainability, and the flourishing of human and non-human life. In this short article, I take that case largely as given.
The harder question is strategic: why should a household, business, community, or country embrace degrowth when others may continue pursuing growth? This is where game theory becomes pertinent, which is the focus of my new article, “Game Theory and the Dilemma of Degrowth,” summarised below.
At its simplest, game theory examines strategic interdependence: my best course of action depends not only on my values, but also on what I expect others to do and how the rules reward our choices. The debate therefore moves beyond “What is morally right?” to “What is rational if others do not cooperate?”
Degrowth involves several overlapping games. It is a public-goods problem because everyone benefits from a stable climate while each actor is tempted to let others bear the costs of restraint. It is a coordination problem because finance, employment, welfare, trade, housing, transport, food, and energy must change together. It resembles a “stag hunt” because cooperation offers the best result, but moving first can be risky. It is also a status game: households compete for prestige, firms for market share, and states for power.
Degrowth’s dilemma
These pressures create what I call “degrowth’s dilemma.” Growth maximisation is collectively destructive under ecological limits, yet unilateral degrowth can impose real costs on the first mover. A government may accept the environmental case for contraction but fear losing tax revenue, industrial capacity, military power, or technological influence, while rivals keep expanding. From the perspective of national security, restraint can look like weakness.
The same logic applies to firms and households. A company may want to make durable goods, reduce material throughput, limit profits, and pay workers fairly, but less responsible competitors may undercut it and drive it from the market. A household may consume less yet wonder whether its restraint matters while consumption elsewhere continues to rise. The difficulty is not simply hypocrisy or weak will. Competitive institutions can push decent people towards choices that seem individually rational but produce collective ruin. I borrow the image of “Moloch” for this trap: everyone may understand that the system must change while believing they cannot afford to move first.
Degrowth’s dilemma is not, however, a standard prisoner’s dilemma with fixed payoffs. The current reward system is temporary and ecologically misleading. Growth appears beneficial because many of its costs are hidden, delayed, displaced onto poorer people and future generations, or treated as external to the economy. It may raise employment, revenue, profits, consumption, and military capacity today while eroding the climate, biodiversity, soils, water systems, and social stability on which tomorrow’s prosperity depends. The prevailing game says growth wins, but the biosphere is rewriting the rules.
Game theory therefore does not lead to fatalism. It shows that cooperation depends on institutions, expectations, sanctions, and norms – and these can change. Binding agreements, climate clubs, border adjustments, extraction limits, fossil-fuel treaties, restrictions on planned obsolescence, wealth taxation, debt cancellation, and technology sharing could make ecological cooperation more attractive and free riding more costly. Moral persuasion remains important, but it cannot substitute for redesigning the payoff structure.
Commons governance offers another path. Communities have shown that shared resources need not be destroyed when users establish clear rules, monitoring, graduated sanctions, conflict-resolution procedures, and nested forms of decision-making. This suggests that ecological coordination need not depend solely on either markets or a single global authority. Local, regional, national, and international institutions can reinforce one another.
Reducing vulnerability
Cultural norms also shape the game because preferences are not fixed. Degrowth requires wasteful consumption to lose prestige while repair, sharing, care, sufficiency, and ecological restoration become socially respected. Prefigurative projects – such as ecovillages, cooperatives, repair cafés, local food systems, community energy, and voluntary simplicity – help create small alternative games in which cooperation yields immediate rewards such as belonging, useful skills, lower costs, and resilience. They cannot replace structural reform, but they can cultivate the people, practices, and expectations on which reform depends.
I also stress that degrowth must be selective rather than indiscriminate. The aim is to contract fossil fuels, luxury consumption, destructive extraction, planned obsolescence, and socially unnecessary production while expanding care, health, education, ecological restoration, renewable infrastructure, repair, and low-energy public goods. A state that merely dismantles productive capacity may become vulnerable. One that reduces fossil-fuel dependence, shortens supply chains, strengthens food security, and lowers inequality may become more secure.
The hardest question is what happens if global coordination fails – which is perhaps the most likely future scenario. The likely alternative to planned contraction is not endless green prosperity, but involuntary contraction through climate disruption, economic volatility, resource conflict, supply-chain breakdown, food and energy insecurity, forced migration, and authoritarian adaptation. Once that possibility is taken seriously, degrowth-like practices acquire what I call a “second-order rationality.” They may be prudent even when they cannot solve the global problem, because they reduce dependence on systems likely to become unstable.
A household that lowers debt, needs less income, grows food, repairs possessions, and builds strong relationships is not simply sacrificing; it is reducing vulnerability. A firm that serves basic needs, lowers energy use, and shortens supply chains may withstand shocks better. A community that localises food, care, water, energy, and mutual aid gains adaptive capacity. A state that protects public health, social trust, ecosystems, and essential production may ultimately be stronger than one that only maximises GDP.
My conclusion is therefore dual. We should pursue coordinated degrowth through treaties, policy, regulation, democratic planning, unions, movements, and institutional redesign. At the same time, we should build resilience in case coordination remains inadequate and growth-dependent systems destabilise or even collapse. These projects overlap: localisation, sufficiency, public provision, ecological restoration, and reduced fossil dependence can advance sustainability while preparing for disruption.
The dilemma is real, and unilateral degrowth guarantees nothing. But it does not follow that continued growth is rational. Growth looks rational only within a short-term accounting system that ignores the destruction of its own foundations. The wiser strategy is to change the game wherever possible (or recognise the game is changing no matter what!) and become less dependent on it where necessary – to pursue descent by design rather than wait for descent by disaster.
Samuel Alexander’s full article in the Real-World Economics Review is available here: ‘Game Theory and the Dilemma of Degrowth: Why Embrace Degrowth if Other States and Societies Do Not?’
Photo: The People’s Internet, CC0, via Wikimedia Commons.
I like this and assume you are using game theory as in change the game.
I realize this is a summary however I don’t know if you mention how to deal with militarization. Demilitarization not only reduces the carbon footprint but eliminates a bastion of corruption.
Assuming one could move the mountain of corporate interests, there is still an independent move to be made raising general fear -rightly or wrongly.
I might also point out that there were a significant number of civilizations destroyed by climate change during the prehistoric era.
One other thought is that attempting to get numbers like GDP to present a truer picture of growth and/ or to have a measurement of climate change and resource use published congruently.
This a rational well thought out plan.However history shows that people are rarely cooperative other than in small belief aligned groups or during a shared emergency i.e.war.
And they are rarely rational.