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Daly, Herman (editor). Toward a Steady-State Economy. Freeman. San Francisco 1973. pp 149-174 - PowerPoint PPT Presentation

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THE STEADY-STATE ECONOMY: TOWARDS A POLITICAL ECONOMY OF B iophysical EQUILIBRIUM AND MORAL GROWTH - Daly. Daly, Herman (editor). Toward a Steady-State Economy. Freeman. San Francisco 1973. pp 149-174 Ben Kreisman ; Ecological Economics. GROWTHMANIA.

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Daly, Herman (editor).Toward a Steady-State Economy. Freeman. San Francisco 1973. pp 149-174

Ben Kreisman; Ecological Economics


  • Fragmentation of knowledge and people by excessive specialization

  • Disequilibrium between the human economy and the natural ecosystem

  • Congestion and pollution of our spatial dimension of existence

  • Congestion and pollution of our temporal dimension of existence with the resulting state of harried drivenness

Growth is the answer to everything

  • grow more to provide more employment for the poor

  • invest and grow to bolster aggregate demand

  • grow by raising productivity so more goods will be chased by the same number of dollars and prices will fall

  • grow to become rich enough to afford the costs of cleaning up and of discovering new resources and technologies

  • grow to be strong and have both guns and butter

  • poverty

  • unemployment

  • inflation

  • pollution and depletion

  • war

The steady state

  • “…defined as an economy which the total population and the total stock of physical wealth are maintained constant at some desired levels by a ‘minimal’ rate of maintenance throughput”

  • At what levels should the stocks of wealth and people be maintained constant?

  • What is the optimal level of maintenance throughput for a given level of stocks?

  • What is the optimal time horizon or accounting period over which population and wealth are required to be constant?

  • What is the optimal rate of transition from the growing economy to the steady-state economy?

Social institutions of control 3
Social institutions of control (3)

  • maintaining constant populations

  • maintaining constant stock of physical wealth

  • governing distribution

  • guiding design principle for social institutions

    • provide the necessary control with a minimum sacrifice to personal freedom

    • provide macrostability, allowing for microvariability

    • combine macrostatic with microdynamic

Social institutions of control 31
Social institutions of control (3)

2. maintaining constant stock of physical wealth

  • control aggregate depletion rather than control pollution

  • legal rights to deplete auctioned off

  • population /economic growth increase demand = higher prices and less consumption

    3. governing distribution

  • Set limits for the maximum and minimum amount of wealth and income

  • supports concept of property rights, but only under the assumption that everyone owns some property

  • would legitimize free-market system

1. maintaining constant populations

  • Kenneth Boulding plan for birth certificates

    • initial allocation is equal across the market

    • compensation for people suffering from infertility

    • rich can purchase more credits, but ultimately decrease per capita income

On moral growth
On moral growth

  • Based on the assumption of static morality, logic and necessity are not sufficient to bring social change

  • “…progress chiefly depends on the extent to which the strongest and not merely the highest forces of human nature can be utilized” – Alfred Marshall

Morality of the steady state
Morality of the steady-state

  • ‘wholeness’

    • If ‘truth’ is whole, then current knowledge is so far from the truth that knowledge is not worth obtaining

      “…unless physical, social and moral dimensions of our knowledge are integrated in a unified paradigm offering a vision of wholeness, no solutions to our problems are likely.”

  • Sermon on the Mount: “Do not be anxious about tomorrow for tomorrow will be anxious for itself. Let the day’s own evil be sufficient for the day”

  • Karl Marx’s materialism and objection to the alienation of man from nature;

    • recognized that nature is the ‘inorganic body if man’ and not just a pile of neutral stuff to be dominated

  • “…to advance the steady-state economy, with stabilized population and consumption, as a policy goal with widespread public support.”

  • CASSE top 15 policies for achieving a steady-state economy

    • Adopt macro-economic policy goal – a steady-state economy

    • Maintain exemplary network of conservation areas sufficient in size to support ecosystem services

    • Stabilize population

    • Gradually reset existing fiscal, monetary and trade policy levers from growth towards steady-state

    • Limit the range of inequality in income and wealth

    • Develop a commons sector to accompany the public/private sectors; assign property rights for commonly held resources

    • Employ cap-and-trade auctions in commons sector for allocating resources

    • Establish for flexible working day/week/year

    • Overhaul banking regulations; elimination of fractional reserve banking so monetary systems move away from debt structure that requires economic growth

    • Adjust zoning policies to limit sprawl and promote energy conservation

    • Continue to monitor GDP as a a measure of the size of the economy; use other measures for welfare

    • Prevent unconstrained capital mobility

    • Work towards full utilization of costs in prices

    • Institute policies that move away from globalization and towards localization (conservation)

    • Limit advertising to prevent unnecessary demand