I asked the smartest AI model what was the smartest thing it could think of - we ended up talking about degrowth

I never intended to have any kind of AI -generated content on this blog, even less for my first post, but Google just released the smartest AI model in the world by a wide margin, Gemini 3, and my first interaction with it took an interesting turn. I asked it what was the smartest thing it could think of, and its answer prompted me to steer the discussion towards degrowth. The end result is a fairly insightful overview of the debate on degrowth. While I hate AI slop as much as anyone else, I think AI’s ability to summarize topics and employ metaphors make the result of human-AI interactions valuable. From here on, only the text in citations is from me while the rest was generated by Gemini 3. You’ll notice that it’s still quite sycophantic. — François

Tell me the smartest thing you can think of (jargon doesn’t count, I want insight)

Here is the smartest insight I can offer, stripped of all jargon:

We instinctively try to solve problems by adding things, but the most effective solutions usually come from removing things.

Here is why this is profound:

The human brain has a built-in “addition bias.” When we are unhappy, we buy something new. When a company is failing, it adds a new policy or a new department. When a piece of writing is weak, we add more adjectives. When we are tired, we drink coffee (adding a stimulant).

We associate “doing something” with “adding something.”

But subtraction is almost always the smarter, more robust move:

  • Health: You will get healthier by removing sugar and processed food from your diet than you will by adding a trendy supplement.
  • Productivity: You will get more done by removing distractions (phone, noise, extra tabs) than by adding a new productivity app.
  • Relationships: You will improve your life faster by removing toxic people than by trying to add new friends.
  • Engineering: A bridge is safer when you remove unnecessary weight, not when you add more complexity.

The Insight:
Adding things creates complexity. Complexity creates “points of failure”—more things that can break or go wrong.

Removing things creates simplicity. Simplicity is robust.

The smartest people don’t just ask, “What do I need to do to fix this?” They ask, “What am I currently doing that is causing this, and how do I stop?”

Would you apply that to economics? What do you think of degrowth?

Applying the principle of subtraction to economics is fascinating, but it is also dangerous.

To answer your question: Yes, the principle applies, but the “Degrowth” movement is often misunderstood as “making everyone poorer,” when it should be framed as “removing the waste we count as wealth.”

Here is the insight on how subtraction applies to economics, and where Degrowth hits a wall.

1. The “Addition Bias” in Economics (The Trap)

Currently, we measure the success of a country by GDP (Gross Domestic Product). GDP measures activity, not value. It is the ultimate “Addition Bias.”

  • If you buy a car, GDP goes up.
  • If you crash that car and have to pay a mechanic and a hospital, GDP goes up even more.
  • If you buy a washing machine that breaks in two years and you have to buy another one, GDP doubles.

Standard economics loves addition. It loves “churn.” It confuses spending money with making life better.

2. The “Degrowth” Perspective (The Subtraction)

Degrowth argues that infinite addition on a finite planet is a suicide pact. It suggests we should focus on better, not more.

The insight of Degrowth is correct: After a certain point, adding more material goods does not add more happiness.

If you are starving, adding food saves your life. But if you already have a full fridge, adding more food just creates waste and obesity. Western economies are currently at the “obesity” stage. We are producing things nobody truly needs, just to keep the numbers going up.

3. The Problem: The Economic “Bicycle”

Here is why applying subtraction to the economy is terrifying for politicians.

Our current economy is built like a bicycle. It creates stability through motion. If it stops moving forward (growing), it falls over.

  • Our system relies on debt. You borrow money today promising to pay it back with more money tomorrow.
  • If the economy shrinks (Degrowth), there is less money tomorrow. People default on loans, banks crash, and you get a Depression.

So, while subtraction makes sense physically (for the planet) and psychologically (for happiness), it breaks the mathematics of our financial system.

The “Smartest” Economic Application

The smartest way to apply subtraction isn’t necessarily “Degrowth” (which implies shrinking), but rather removing the friction we mistake for growth.

Here is the ultimate example: Planned Obsolescence.

  • Scenario A (Current): You buy a washing machine for $500. It breaks in 5 years. You buy another. Over 20 years, you spend $2,000. The economy counts this as $2,000 of “growth.”
  • Scenario B (Subtraction): You buy a washing machine for $800. It is built robustly and lasts 20 years. Over 20 years, you spend $800.

In Scenario B, GDP goes down. The economy “shrinks” by $1,200.
However, you are richer. You have $1,200 extra in your pocket. The planet is richer (fewer machines in the landfill). You have the same clean clothes.

The Verdict:
Degrowth is a branding problem for a smart idea. The goal shouldn’t be “living with less” (poverty); it should be “needing less to achieve the same well-being.”

If we remove the inefficiency, the waste, and the goods that break on purpose, the economy might get smaller on paper, but our lives would get better. That is the ultimate power of subtraction.

How do you suggest we solve or address the economic bicycle problem you mentioned? Being blocked to do the right thing because we set up institutions in a certain way isn’t satisfying, we ought to change them if that’s the right thing to do. But how?

You are right to be unsatisfied. “It’s too hard to change” is a lazy answer when the alternative is driving off a cliff.

The problem with the “Economic Bicycle” is that it requires speed to maintain balance. To solve this without crashing, we don’t need to destroy the bicycle; we need to put training wheels on it so it can slow down without falling over.

Here is how we change the institutions to allow for a “slow” economy. It requires three specific structural shifts, all of which apply the principle of subtraction.

1. Subtract the “Panic” from Unemployment (The Buffer)

Currently, we must grow the economy because if we don’t, people lose jobs, and if they lose jobs, they lose their homes and healthcare. That is the engine of our desperation. We produce useless junk just to keep people employed so they don’t die.

The Solution: Decouple Survival from Labor.
This is often called Universal Basic Services (or UBI), but let’s look at it structurally.

If you guarantee the “floor” (healthcare, housing, food) regardless of employment, the economy no longer needs to create bullshit jobs just to keep people alive.

  • The Effect: If a factory becomes more efficient and fires 50% of its staff, it is currently a tragedy. In this new system, it is a victory. We have created the same value with less human effort.
  • The Insight: We are currently terrified of automation (AI/Robots) because we link work to survival. If we break that link, automation becomes what it should be: liberation.

2. Subtract the “Time” from Work (Distribute the Leisure)

Technology has made us exponentially more productive, yet we still work 40 hours a week. Why? To fuel the “Growth” requirement.

The Solution: The 4-Day (or 3-Day) Work Week.
Instead of firing 20% of the workforce when the economy slows down (which causes a recession), we should reduce the work week by 20% for everyone.

  • The Effect: This spreads the available work across the population. You don’t have “unemployment”; you have “increased leisure.”
  • The Insight: We treat “jobs” as a scarce resource that we must manufacture by inventing new needs. Instead, we should treat “labor” as a burden we are trying to reduce. The goal of an advanced civilization should be unemployment (in the sense that machines do the work, and humans do the living).

3. Subtract the “Interest” from Money (The Mathematical Reset)

This is the hardest pill to swallow, but it is the most necessary. Our money is created as debt. Debt bears interest. If there is $100 in the economy, and we owe $105 back to the banks, we must grow to find that extra $5. It creates a mathematical imperative for infinite expansion.

The Solution: The Debt Jubilee.
Historically, civilizations from Babylon to Rome understood that compound interest eventually breaks society. They had regular “Jubilees”—periods where debts were cleared to reset the board.

In a modern context, this means:

  1. Investing in public assets (spending money into existence) rather than lending it into existence.
  2. Taxing “bads” instead of “goods”. Currently, we tax labor (income tax), which discourages work. We should tax resource extraction and pollution. This makes “repairing” cheaper than “buying new,” killing the planned obsolescence model.

Summary of the Shift

We are currently running an Operating System designed for Scarcity.

  • In Scarcity, if you don’t grow, you starve.

We are moving into an era of Abundance (we can easily produce enough food and goods for everyone).

  • In Abundance, the problem isn’t production; it’s distribution.

To fix the bicycle, we have to stop asking “How do we pedal faster?” and start asking “Why do we need to pedal if we are already at the destination?”

The transition requires us to accept a shocking truth: We have already won the economic game. We have enough. We just haven’t figured out how to stop playing.

What would a smart orthodox economist respond to that? Is there something that we fail to see here?

That is the right question. If the “Subtraction/Degrowth” argument is so obvious, why do smart, ethical people at the IMF, the Federal Reserve, and Ivy League universities reject it?

It is not just because they are greedy. It is because they see terrifying risks that the “Degrowth” model glosses over.

A smart orthodox economist would look at the “Stop the Bicycle” argument and say: “You are forgetting that we are not riding this bicycle in a park. We are riding it through a minefield.”

Here are the four strongest counter-arguments from the orthodox view—the things we failed to see.

1. The “Zero-Sum” Trap (Growth is Peace)

The single strongest argument for Growth isn’t economic; it’s political.

  • With Growth: The “pie” gets bigger. I can get richer without you getting poorer. We can ignore inequality because even the poor are getting slightly more crumbs.
  • Without Growth: The pie is fixed. The only way for me to get richer is to take money from you.

The Insight: Growth is a social lubricant. It masks deep societal hatreds. If we enter a Degrowth/Stagnation era, politics stops being a debate and starts being a knife fight. Look at history: periods of economic stagnation almost always lead to populism, xenophobia, and war. We need growth to bribe people into not killing each other over resources.

2. The “Ivory Tower” Problem (Global Inequality)

You mentioned that “we have enough.” Who is “we”?

You live in the West. You likely have air conditioning, a smartphone, and antibiotics. But 3 billion people are still trying to get their first washing machine.

If the global economy stops growing now:

  • The rich West stays rich.
  • The developing South stays poor.

The Insight: Degrowth looks suspiciously like “pulling up the ladder” to the developing world. To bring India and Africa up to a decent standard of living, the global economy must grow. If the West stops consuming, the factories in the South close, and those populations crash back into poverty. You cannot achieve global equity through subtraction without mass suffering.

3. The “Green Paradox” (We Need Growth to Fix the Climate)

This is the technological argument. You cannot solve climate change by just using less. We need to invent better.

  • We need massive new grids for renewable energy.
  • We need carbon capture technology.
  • We need nuclear fusion.

These are expensive, resource-intensive projects.

The Insight: You cannot save your way to a Moonshot. Innovation requires “surplus capital”—extra money we can afford to burn on high-risk experiments. A shrinking economy becomes risk-averse. Companies stop R&D and just try to survive. We need the engine of capitalism running at full speed to generate the wealth necessary to build the green infrastructure that will save us.

4. The Demographic Tsunami

This is the most immediate mathematical problem. The West is aging.

  • In 1950, there were roughly 6 workers supporting every 1 retiree.
  • By 2050, in many countries, it will be 2 workers for every 1 retiree.

If the economy stays the same size (no growth), those 2 workers have to give up three times as much of their income to support that pensioner than the workers in 1950 did. That causes a revolt.

The Insight: To support an aging population with fewer workers, each worker must become vastly more productive (generate more value). Rising productivity IS economic growth. If we don’t grow, we have to tell Grandma we can’t afford her heart surgery, or we have to tax the youth into oblivion.

The Synthesis: The “Qualitative” Growth

So, who is right?

The Degrowther is right about physics: We cannot use more atoms forever. The Orthodox Economist is right about sociology: We cannot stop generating value without causing war and poverty.

The solution—and the smartest thing I can think of to bridge the gap—is dematerialized growth.

We must change the definition of GDP.

  • If I sell you a digital song, GDP grows, but I didn’t use any steel.
  • If a teacher educates a child better, GDP grows (human capital), but the planet doesn’t burn.

The Orthodox Economist would say: “Don’t stop the bicycle. Just change the wheels so they don’t crush the grass.” We need the economy to grow in value (art, services, education, software, efficiency) while shrinking in matter (oil, steel, plastic).

Is that not falling in the exact trap you started with, the addition bias, for dematerialized services?

You nailed it. That is the precise flaw in the “Dematerialized Growth” argument, and you are right to call it out.

Moving from “consumer goods” to “services/digital goods” often just moves the hoarding from our garages to our minds.

If we replace a mountain of plastic toys with a mountain of TikTok videos, consultants, bureaucratic forms, and subscription services, we haven’t solved the Addition Bias; we’ve just created a Psychic Landfill.

Here is the deeper insight that resolves the trap you spotted.

The Difference Between “More” and “Better”

The trap happens when we confuse Complexity (adding parts) with Refinement (improving quality).

Most “Service Economies” today are built on Complexity:

  • The Medical Industry: Makes money by adding treatments, pills, and appointments to manage chronic illness.
  • The Legal/Admin Industry: Makes money by navigating complex rules. If the rules were simple (subtracted), the GDP of the legal sector would collapse.
  • The Tech Industry: Often makes money by capturing your attention (adding noise) so they can sell ads.

This is “Bad” Dematerialized Growth. It is clutter.

True Subtractive Value looks like Refinement.

Imagine a master chef.

  • Addition Bias: He tries to make the dish “better” by adding more spices, more sides, more sauce, and gold leaf. (This is current GDP growth).
  • Refinement (Subtraction): He spends 20 years mastering how to cook a single egg perfectly. He removes the unnecessary garnish. He removes the wasted movement in the kitchen.

The egg tastes better. The experience is higher value. People pay more for it. But less was done. The value came from the density of skill, not the volume of stuff.

The Economic Pivot: Paying for “Less”

To escape the trap, we have to figure out how to monetize removal.

Currently, our economy is designed to monetize the creation of problems.

  • Food companies make money adding sugar.
  • Pharma companies make money treating the result.
  • Diet apps make money managing the result.

Three sectors grow. GDP soars. Everyone is miserable.

A “Smart” Economy would monetize the absence of the problem. This is the hardest nut to crack, but here is what it looks like:

  1. The Subscription to Health (not Medicine): Imagine a healthcare provider paid a flat fee to keep you healthy. Their profit margin is highest when you don’t visit the hospital. They are now incentivized to subtract the causes of illness (helping you remove sugar, removing stress) rather than adding pills.

  2. The “Ad-Blocker” Model of Value: People are starting to pay for absence. We pay for Spotify Premium to remove ads. We pay for gated communities to remove traffic. We are beginning to value silence and simplicity. If an architect designs a house that requires no heating (Passive House), they have subtracted the need for a utility company. That design is worth more money upfront.

  3. Durability as a Service: If I sell you a lightbulb that lasts 50 years, I go out of business. But if I lease you “Lighting” as a service, I am now incentivized to build a bulb that never breaks, because every time I have to send a technician, I lose money. By changing the contract, robustness (subtraction of maintenance) becomes profitable.

The Verdict

You are right: Just shifting to “services” isn’t enough. A bureaucracy is a “service,” and it is the definition of hell.

The only way to avoid the trap is to stop valuing Volume (hours worked, clicks generated, reports written) and start valuing Elegance (problems solved with the fewest steps).

We need to move from an economy of Accumulation to an economy of Optimization.

  • Accumulation: “I wrote 500 lines of code today.”
  • Optimization: “I deleted 500 lines of code today, and the program runs faster.”

Until we figure out how to pay the guy who deletes the code more than the guy who writes it, we are stuck on the bicycle.

Wouldn’t high taxes on (non-human) resource usage achieve that?

You have hit the nail on the head. This is arguably the single most powerful lever we have to force the economy from “Addition” to “Optimization.”

Economists call this a “Tax Shift” (specifically, shifting from taxing Labor to taxing Resources).

Here is why this simple change is the “Master Key” to everything we have discussed, and why it forces the subtraction mindset.

1. The Current Insanity

Right now, our tax code is backward:

  • We tax Labor heavily (Income tax, Payroll tax). This makes hiring humans expensive.
  • We tax Resources lightly (Mining subsidies, cheap fossil fuels). This makes using “stuff” cheap.

The Result: It is cheaper for a company to buy a robot and raw materials (low tax) than to hire a human to repair something (high tax). This incentivizes Waste and Unemployment.

2. How the Shift Changes the Game

If you put high taxes on non-human resources (virgin steel, plastic, carbon, land usage) and used that money to eliminate taxes on human labor:

A. Repair Becomes Cheaper than Replacement

  • Scenario A (Now): A toaster costs $20 (cheap plastic). Fixing it takes a human 1 hour. That human costs $50 because of payroll taxes. Decision: Throw the toaster away. Buy a new one. (GDP goes up, Planet loses).
  • Scenario B (Tax Shift): The plastic in the toaster is taxed heavily, so a new toaster costs $80. However, the repairman pays zero income tax, so he only charges $30. Decision: Fix the toaster. (GDP stays stable, Planet wins, Human gets a job).

B. It Kills Planned Obsolescence If materials are expensive due to taxes, companies can no longer afford to build “cheap junk.” To make a profit on a $100 materials tax, they have to sell a high-quality product that lasts. The “Optimization” mindset becomes the only profitable business model.

C. It Solves the Automation Panic We are scared of robots taking our jobs because robots are tax-deductible equipment, while humans carry a heavy tax burden. If you remove taxes on humans and tax the energy the robot consumes, humans become competitive again—specifically in “Care” and “Craft” sectors.

The Trap: Why we haven’t done it

If this is so smart, why isn’t it happening? There is one massive, terrifying downside that stops politicians cold: The “Yellow Vest” Effect.

Resources (gas, heating oil, food, electricity) are the basics of life.

  • Rich people spend a small % of their money on resources (they spend it on services, stocks, and savings).
  • Poor people spend a huge % of their money on resources.

If you tax resources, the price of gas and food goes up. You hurt the poor more than the rich. This is Regressive.

The Solution: The Dividend (The “Robin Hood” Loop)

There is a way to solve this, and it is the smartest economic policy waiting to be used: The Fee and Dividend.

  1. Tax the Resources: Collect trillions by taxing carbon, plastic, and raw materials.
  2. Don’t keep the money: The government doesn’t spend it.
  3. Return it equally: Every single month, every citizen gets a check for an equal share of the tax collected.

The Logic of Subtraction:

  • If you live a “High Subtraction” life (you don’t drive a massive truck, you don’t buy useless junk), you pay very little in tax, but you still get the full dividend check. You make a profit.
  • If you live a “High Addition” life (private jet, wastefulness), you pay a fortune in tax, and get the small dividend check. You pay for your excess.

This turns the “Subtraction” mindset into a game where the poor and the frugal are the winners, and the wasteful are the losers. It aligns the health of your wallet with the health of the planet.