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Steady-state Economies

Dave Ewoldt, December 2005

   Do you enjoy eating ice cream? If so, ask yourself, "if a little bit of ice cream is good, wouldn't more be even better?" I mean, why not just consume gallons of it? And forget about broccoli and asparagus, and especially those nasty little Brussels sprouts and that slimy okra.

   Well, this way of thinking is the foundation for the economic theory orthodox growth economists in the industrialized world use today.

   If production is good, then it must follow that we can't get enough, or more is better. However, this ignores the Economics 101 principles of diminishing benefit and increasing costs. Resource depletion, labor, and pollution are real costs to the economy, and per capita economic benefits are decreasing today.

   A figure known as Gross National Product (GNP), now know as Gross Domestic Product (GDP), was developed in WWII as a measure of wartime production capacity. GDP is purported to be an indicator measuring economic progress, health and well-being. But it was _not_ developed to measure well-being, only to track products and services bought and sold. It doesn't separate costs from benefits, or productive activities from destructive ones. It either ignores non-monetized exchanges (household and volunteer work, barter), natural resource depletion, pollution effects, or counts them as benefits. GDP not only masks the breakdown of the social structure and natural habitat; worse, it actually portrays such breakdown as economic gain. GDP measured Hurricane Andrew as a boon to the economy of over $15 billion.

   When the natural world is assessed for it's contribution to economic activity, such as purifying water, the figure comes in at about $33 trillion--twice global GDP. But, the natural wealth of the world’s ecosystems has declined by a third over the past 30 years.

   The Genuine Progress Indicator (GPI) is a new measure of economic well-being. It includes social and environmental factors which the GDP dismisses. It differentiates between transactions that add to well-being and those which diminish it. The GPI then integrates these factors so that benefits can be weighed against the costs. This gives a more accurate measure of the overall health of the economy. For a visual representation of GDP versus GPI, here's an on-line graph.

   The GPI reveals that much of what economists consider economic growth, is really fixing past mistakes and social ills, or borrowing resources from the future. The GPI strongly suggests that the costs of the growth economy outweigh the benefits, leading to growth that is actually uneconomic.

   The normal operation of a growth economy is an unmitigated environmental disaster. It's exploitive of human capital, and deadening to the spirit of the advertised beneficiary--the consumer. We should understand that the term "market forces," when used to justify unrestrained growth, is simply the politically correct term for unmitigated greed.

   The meaning of the verb "to grow" is to spring up and develop to maturity. Physical accumulation gives way to maintenance, which is a steady state. This is the way natural systems work; they grow to a point, maintain themselves with what the environment provides, then die and contribute to new life. Humans, and the systems we create, can emulate this process, because we have natural systems wisdom as part of who we are.

   Instead, we take more than what the environment can sustainably provide. We use resources from far away, use more than can be replenished, and dump more waste than nature can absorb. We end up, quite literally, taking the food out of the mouths of other species, which leads to extinction, and out of the mouths of other peoples, which leads to the increase in global poverty, loss of sovereignty, and becomes one of the factors that fuels the rise of global terrorism.

   But it doesn't have to be this way, we don't have to foul our own nests. In fact, it is quite literally true that our survival, as a species, depends on stopping growth.

   The sustainable alternative is a steady-state economy. This recognizes that the economy is a sub-set of our ecosystem, and that our ecosystem is finite and non-growing. A steady-state economy addresses concepts outside the bounds of growth economics. These concepts include: there is an optimal scale for human economic activity; there is an optimum size population; carrying capacity (what the natural world can provide; and sustainability (maintenance of valuable qualities without loss or diminished capacity).

   How big can our economy be? In order for an economy to be sustainable, or steady-state, it must meet two rules:

   Output rule: Waste outputs should be within the natural absorptive capacities of the environment.

   Input rules: (a) For renewable inputs, harvest rates should not exceed regeneration rates. (b) For non-renewable inputs the rate of depletion should not exceed the rate at which renewable substitutes can be developed.

   It is this ongoing development that gives steady state economies the ability to provide adequate and sustainable per capita income for all. This is because development (qualitative improvement) is more important than economic growth (quantitative enlargement). From a social perspective, moral growth replaces material growth.

   The mindset that says war against a people who did nothing more than try to live where they'd been born (both Vietnam and Iraq), is really no different than the exploitation, the actual war against our Mother Earth. Resisting these wars and resisting consumer culture requires the same degree of awareness--and responsibility.

   The fundamental question posed by Hannah Arendt in her book, "Eichmann in Jerusalem," is relevant in both of these contexts today. The question she posed was what do you do if you're a German? What do you do when all the politicians, when all the organized institutions of your society, instruct you to behave in a way which you know is fundamentally in violation of everything a human being is supposed to be?

   The next time you buy a piece of apparel, at either Wal-Mart or Nordstrom's, think about the cotton farmers in India, who have the highest suicide rate of farmers in the world thanks to Monsanto's policies; think about the 12 year old girl in Indonesia or Central America who is sewing the pattern for 12 cents an hour; and think about the mother in St. Louis who is on welfare but who used to have a union wage job that has been off-shored in order to obtain higher corporate profits.

   The main rational for a steady-state economy is to avoid the suffering of a failed growth economy. And, it's not just a steady-state economy that we need in order to save what's left of the environment. We also need a relocalized economy to save what's left of our spirit.

   If you would like to schedule an introductory consultation session or arrange a presentation or workshop for your group, please contact nature@attractionretreat.org or give Dave or Allison, co-founders of Attraction Retreat, a call at (360) 756-7998.