Managing Without Growth

Managing Without Growth

Slower by Design, Not Disaster

Advances in Ecological Economics series

Peter A. Victor

Peter Victor challenges the priority that rich countries continue to give to economic growth as an over-arching objective of economic policy. The challenge is based on a critical analysis of the literature on environmental and resource limits to growth, on the disconnect between higher incomes and happiness, and on the failure of economic growth to meet other key economic, social and environmental policy objectives. Shortly after World War II, economic growth became the paramount economic policy objective in most countries, a position that it maintains today. This book presents three arguments on why rich countries should turn away from economic growth as the primary policy objective and pursue more specific objectives that enhance wellbeing.

Chapter 3: Systems, Information and Prices

Peter A. Victor

Subjects: environment, ecological economics, environmental politics and policy, politics and public policy, environmental politics and policy


the mainstream discipline [of economics] has not . . . asked what types of information the price system systematically marginalizes or excludes, nor the consequences of these exclusions. (Babe 2002) Conceptualizing the economy, society and environment as nested systems as illustrated in Figure 2.2 reveals much that is important for understanding the economy and its dependence on a wider world. Modern, dynamic economies continually put pressure on the social and natural systems on which they rely. What is less clear from Figure 2.2 is how these other systems respond and adapt to this pressure and the effect of these responses on the economy. There are positive and negative feedbacks in play in all these systems and at all levels. These feedback loops determine how systems function and how they respond to external pressures. Fundamental to any feedback loop is the information that drives it. For example, a thermostat used to maintain room temperature at a particular level works by comparing information about the current room temperature with the desired level. If the temperature is too high the thermostat switches the heating off. If it is too low, the thermostat switches the heating on. It should be obvious that if the information fed to the thermostat is not accurate then the desired room temperature will not be maintained. Accurate information is extremely important for any system to function well. Although they are not shown in Figure 2.2 there are feedback loops in all three of the systems: economy, society and nature, and among...

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