From Uneconomic Growth to a Steady-State Economy

From Uneconomic Growth to a Steady-State Economy

Advances in Ecological Economics series

Herman E. Daly

In this important book, Herman E. Daly lays bare the weaknesses of growth economics and explains why, in contrast, a steady-state economy is both necessary and desirable. Through the course of the book, Daly develops the basic concept and theory of a steady-state economy from the 1970s limits to growth debates. In doing so, he draws on work from the classical economists, through both conflicts and agreements with neo-classical and Keynesian economists, as well as recent debates on uneconomic growth.

Chapter 1: Introduction: envisioning a successful steady-state economy

Herman E. Daly

Subjects: development studies, agricultural economics, development economics, economics and finance, development economics, environmental economics, environment, ecological economics

Extract

How do you envision a successful economy without continuous growth? It helps to consider a prior question: how do you envision a successful Planet Earth without continuous growth? That is easy to envision because it exists! The Earth as a whole does not grow in physical dimensions. Yet it changes qualitatively, it evolves and develops. Total matter on Earth cycles, but does not grow. Energy from the sun flows through the earth coming in as low-entropy radiant energy, and exiting as high-entropy heat. But the solar flow is not growing. Nearly all life is powered by this entropic throughput of solar energy. There is birth and death, production and depreciation. New things evolve; old things go extinct. There is continual change. But the Earth is not growing. The economy is a subsystem of the Earth. Imagine that the economy grows to encompass the entire earth. Then the economy would have to conform to the behavior mode of the Earth. Namely, it could no longer grow, and would have to live on a constant solar flow, approximating a steady state – an exceedingly large steady state to be sure, well beyond optimal scale. The economy would have taken over the management of the entire ecosystem – every amoeba, every molecule, and every photon would be allocated according to human purposes and priced accordingly. All ‘externalities’ would be internalized, and nothing could any longer be external to the all-encompassing economy.