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 G.: Employment

Herman E. Daly

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


The Full Employment Act of 1946 declared full employment to be a major goal of US policy. Economic growth was then seen as the means to attain the end of full employment. Today that relation has been inverted. Economic growth has become the end, and if the means to attain that end – automation, off-shoring, excessive immigration – result in unemployment, well that is the price ‘we’ just have to pay for the glorified goal of growth in GDP. If we really want full employment we must reverse this inversion of ends and means. We can serve the goal of full employment by restricting automation, off-shoring, and easy immigration to periods of true domestic labor shortage as indicated by high and rising wages. In addition, full employment can also be served by reducing the length of the working day, week, or year, in exchange for more leisure, rather than more GDP. Real wages have been falling for decades, yet our corporations, hungry for cheaper labor, keep bleating about a labor shortage. What the corporations really want is a surplus of labor. With surplus labor, wages generally do not rise and therefore all the gains from productivity increase will go to profit, not wages. Hence the elitist support for automation, off-shoring, and lax enforcement of democratically enacted immigration laws.

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