Sunday, March 17, 2013
Ditching Our Malignant Growth Paradigm
Infinite growth on a finite planet is impossible. That is all you need to accept to realize that our growth-based economics are invalid, even harmful and we need to move to a viable, long-term and sustainable economic model. Today this is called "full world" or "steady state" economics and we're moving there because we really have no better choice. The only question is whether we do so of our own volition, on our own terms, or are compelled to accept steady state economics after costly and destructive attempts to avoid reality.
Steady state is based on constancy. In its simplest terms, it's a social structure in which deaths roughly equate with births and savings are in rough parity with depreciation. The physical aspects of society remain in balance while growth remains possible, even encouraged, in non-physical aspects such as knowledge. Quality of life can improve, in fact should improve, within a steady state economy.
The great economists of our civilization from Adam Smith to John Maynard Keynes all envisioned our ultimate progress to steady state economics.
The four principles of steady state economics are straightforward and obvious, especially given the problems that beset us today from growth-based economics.
Achieving a steady state economy requires adherence to four basic rules or system principles: (1) Maintain the health of ecosystems and the life-support services they provide. (2) Extract renewable resources like fish and timber at a rate no faster than they can be regenerated. (3) Consume non-renewable resources like fossil fuels and minerals at a rate no faster than they can be replaced by the discovery of renewable substitutes. (4) Deposit wastes in the environment at a rate no faster than they can be safely assimilated.
Policies for sticking to these rules are varied. The first rule requires conservation of enough land and water such that healthy ecosystems can flourish and evolve. The second and third rules call for principled regulation of resource extraction rates. Direct forms of regulation include cap and trade systems, extraction quotas, and severance taxes. The fourth rule requires pollution restrictions, such as emissions limits or toxicity standards. In addition to rules aimed at specific extraction and pollution activities, there are general macroeconomic policies and potential management actions that can help stabilize growth and limit throughput to sustainable levels.
These types of policies and actions include managing interest rates and the money supply for stability, addition of environmental and social costs to prices, increased flexibility in working hours, and alteration of bank lending practices.
The first thing you should notice is that these principles and practices are all common sense. The next thing that should dawn on you is that these common sense principles and practices are antithetical to growth-based economics and, hence, largely absent in our current society. Ask yourself how you can live without them? How can you leave a decent world for your grandchildren without them? Ask yourself what continuing to live in defiance of these principles and practices must invite.
To learn more about steady state economics, visit the web site of the Center for Advancement of the Steady State Economy.