Center for the Advancement of the Steady State Economy
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Enough Childish Name Calling

by Sharon Ede

Supporters of the steady state may have been irked, if they had not been so bemused, by the content of a recent piece from the UK’s Institute of Economic Affairs (IEA), which took issue with steady state economics.

The opening paragraph of the article by IEA’s Kristian Niemietz is:

Imagine Jean-Jacques Rousseau, Thomas Malthus, Karl Marx and Saddam Hussein were meeting somewhere in the afterlife, deciding to write a joint policy paper. Difficult to imagine? Not at all. The result would probably look a lot like Enough is Enough, the report which came out of the Steady State Economy Conference.

I am sure even Saddam would have been bemused at this randomly selected “who I’d have dinner with” list.

The article continues into familiar territory encountered by steady staters: there are no limits to growth; steady staters and their ilk are doomsday environmentalists trying to spoil everybody’s consumption party; seeking to debunk Malthus and Ehrlich because their predictions have not (yet) manifested – which, based on current trends that a lot of people are very, very worried about, is arguably a bit of premature congratulation.

If Niemietz thinks that Ehrlich missed the mark about ‘prophesying decades of mass starvation in the Third World’, I suggest he familiarises himself with the Millennium Development Goals, which include a target to halve the number of people suffering from hunger between 1990 and 2015. Just because you are not starving, Mr Niemietz, does not mean many others are not. According to the UN Food & Agriculture Organization, one in six people in the world are suffering. That’s over a billion people.

Niemietz also creates a straw man of epic proportions when he states that “proponents of Steady State Economics think of people as a swarm of locusts: left to themselves, they will blindly devour their own livestock. But this interpretation is misleading. Locusts cannot generate scarcity signals. We can: they’re called market prices.”

Locusts do create scarcity signals – collapse of their number when the food source runs out. But that’s another story. In the meantime, will somebody contact the Mayans, the Romans and the Easter Islanders and tell them there is nothing to worry about.

A few tips for Mr Niemietz:

1. Limits to nature and to growth are a fact. There is only so much planet. Ask an astronaut.

2. Market prices signal a resource’s availability in the marketplace – not in the biosphere. This is why, where I live, a liter of petrol is cheaper than a liter of Coca Cola.

3. If perpetual consumption is the path to happiness, why do many western nations have such high levels of stress, personal debt, depression/mental illness? Is there a connection between the focus on maximizing consumption via the identity of the individual at the expense of community life and social connection? No chance we are out of balance in this one, then?

The author also cites a nonsensical metaphor courtesy of Bjørn Lomborg – the logic of resource depletion is akin to somebody who looks into a fridge and concludes there is only food for three days in it, and after that, the owner will starve.

An accurate metaphor would be that we are pulling apart our house to burn on the fire to keep warm; we are liquidating our capital, the natural systems that sustain us. Ask any conservation biologist and they will tell you that this is a dumb approach to asset management.

In an article peppered with inaccuracies and faulty logic, the author makes a claim that is way off target – an accusation that those advocating a steady state economy are misanthropists.  On the contrary, we want to see good lives for all, now and into the future, secured through sound management of our ecological assets, and a quality of life that includes meeting material needs – but recognizing material needs as only one aspect of the totality of being human.

Although it’s pleasing to see that these ideas are starting to pop up as debates in this kind of forum, because it means that the growth monster is being perturbed, critics should try adding some basic physics, biology and a bit of history into their all-economics diet. Think of it as a bit of fiber!

Sharon Ede is a collaborating author of Post Growth and the curator of the Cruxcatalyst blog.

10 Responses to “Enough Childish Name Calling”

  1. Chris Kuykendall says:

    It’s kind of a strange membership for the imaginary meeting. I would have thought that the imaginary core would instead start with maybe Aldo Leopold and Rachel Carson, and kind of go from there. The Daly News regulars, which I am not one of except as an occasional reader, would probably have some better ideas on an alternative imaginary composition. I will say that I’m having a hard time discerning where Mr. Niemietz got Saddam Hussein from.

  2. jaykimball says:

    Good one Sharon.

    Regarding your point #4, Eben Fodor posted a good article on Examining the Relationship Between Growth and Prosperity. Good news – slow/no growth can result in healthy prosperous communities. See:

    http://8020vision.com/2011/01/15/examining-the-relationship-between-growth-and-prosperity/

    Jay Kimball
    8020 Vision

  3. jaykimball says:

    Sorry, that should have been point #3, not #4.

    jay

  4. Bruce E. Woych says:

    If market price theory indicates a signal of scarcity, then Mr. Niemietz is a failure at his own methodology; even allowing for flagrant abuse of control fraud over markets and profit gauging on necessities, the cost of resource chain allocation and distribution is rapidly increasing along with our path dependence towards a catalytic crisis of mass redistribution of those end products being hoarded and monopolized aggressively around the world. Water alone is no longer a guarantee in either quality or quantity.

    Goethe stated that there is nothing more frightful than ignorance in action. I would say that applies to your model of the global condition and its value distorted economic matrix.

    L. Fletcher Prouty restated Goethe in a nice turn of phrase which applies more to Mr. Niemietz’s theoretical capacity and credibility in his critique article
    “The Steady State Economy Conference – the economics of misanthropy
    Kristian Niemietz
    12 January 2011

    Prouty stated thusly: “There is nothing so frightful and so self-righteous as an otherwise intelligent and experienced man who, to serve his own ends, will champion the cause of ignorance in action.”

  5. Cole Thompson says:

    I’ve been looking at ways to talk to neo-classical economists in their language, as a way of making the case for steady state. I haven’t completed this yet, but when I look at long term commodity prices (the prices of all stuff combined), compared to GDP and to wages, I have a hunch one would see that in the last couple decades the price level for physical inputs *as a whole* have increased faster than GDP and much faster than wages.

    If true (and I hope to get this graphed out, in consistent nominal or real dollars) that would I think show the opposite of what econs such as Julian Simon have said. Simon and others would say, for any physical commodity, that commodity gets cheaper as the planet adds more people , because , per Simon, more people = more ideas = ever cheaper ways to extract stuff. Which is crazy but ….

    I’m hopeful that I can demonstrate that price signals over the last 20 years are saying “material inputs as a whole are getting more and more dear, relative to human labor”. I think that might get neo-classicals such as Mr. Niemietz to think long and hard about why that could be.

  6. Philip says:

    I find it so odd that a piece that complains about name-calling is so unpleasant and patronising in its tone. Kristian, by the way, is not a neo-classical, as far as I am aware. The point is that the resources available and the value that arises from how they are allocated can be expanded dramatically through the use of the price system and the extension of trade, invention, innovation and so on. As such, many of the resource scarcity problems may simply not be problems because their very scarcity encourages conservation and innovation. For example, in many sub-Saharan African countries, water is not priced and the main proponents of not pricing water are the better off who benefit from its free use on farms. This leads to the depletion of an important environmental resource and its extremely inefficient use in agriculture (eg water intensive crops being grown where water is short rather than where water is plentiful – I should add that this is a developed-country problem too: Australia, US etc). A tolerably free economy based on exchange in most sub-saharan African countries would transform those countries. Indeed, since 1980, the proportion of people who do not have the basics on which to live has halved – the most rapid fall in absolute poverty in human history (which puts the childish and petty dig at Kristian above into perspective). As for over-consumption leading to stress etc, etc for various reasons (not least the growth of government spending, taxation and regulation) in many western countries and in Japan GDP per capita has more or less stagnated.

    The problem is not that those believers in market mechanisms do not understand the arguments of the “steady-staters” – the “steady staters” identify precisely the problems that economics seeks to solve. We might be wrong, but we certainly understand the opposition argument but I wonder if it is the case the other way round? I suspect not given the tone of the comments and argument in the original post.

  7. Arthur Robey says:

    Name calling is good.
    How about “Disinformation Professional”?

    Let us not be naive.
    Do you remember the disinformation campaign around the harmful effects of smoking?
    Linzen was part of the team to discredit the evidence of smoking’s harmful effects.
    Linzen was also part of the team sent in to discredit Jim Hansen’s evidence of the climate catastrophe.
    Read “The Merchants of Doubt”.

    Where there is money, there is muck.
    We live in a Machiavellian world.

  8. Rob Dietz says:

    To Phillip: Thanks for making the effort to add some meaningful thoughts. In the spirit of having a dialogue, I will offer a few of my own. As you say, Kristian may not be a neoclassical economist, but it is very difficult to intuit what he believes from his article (it is, however, extremely easy to grasp what he does not believe, since he spent most of the article on insults meant to refute the possibility of limits to growth). He’s a witty writer, but he didn’t actually address any of the issues raised in Enough is Enough.

    Regarding your discussion of resource scarcity and water shortages, I’m not sure what you’re saying. Are you calling for corporate privatization of water supplies? Are you calling for government regulation and public utilities? In a steady state economy, different types of goods would be allocated in different ways, and the allocation would be accomplished in a way that avoids overshoot. Please see Herman Daly’s recent essay on this topic here:
    http://steadystate.org/sustaining-our-commonwealth-of-nature-and-knowledge/

    You go on to say that “since 1980, the proportion of people who do not have the basics on which to live has halved – the most rapid fall in absolute poverty in human history.” Let’s look a little more closely at the numbers. I want to use the story of Norman Borlaug to illustrate my point. Borlaug was an amazing plant scientist. He directed an agricultural research program in Mexico, and over the course of twenty years, he developed a new strain of high-yield, disease-resistant wheat. He took what he learned and set out on a humanitarian mission to battle hunger by spreading his new strains and farming techniques around the world. His effort came to be called The Green Revolution, and it prevented famine, suffering, and starvation for huge numbers of people. Borlaug was spectacularly successful in achieving breathing room. What did we do with this cushion? We used it for growth.

    When Borlaug won the Nobel Peace Prize in 1970, the number of malnourished, hungry people was estimated to be about a billion – a huge and scary number. Today we still have about a billion malnourished, hungry people. Yes, the proportion of malnourished people decreased because we have so many more people today, but I wouldn’t say we’ve achieved an unqualified success when we still have a billion hungry people. It’s also astonishing to note that there are about a billion overweight people in the world, another sign of an overgrown economy (see Planet Obesity by Egger and Swinburne for more depth on the relationship between uneconomic growth and public health).

    What happened? Instead of using our breathing room to eliminate hunger, we used up our breathing room by growing population and consumption. Spending our breathing room on economic growth failed to eliminate hunger, but it also intensified our resource and ecological problems. The water shortages you mention, expanding deserts, pollution, habitat loss, and other consequences of attempting to feed an ever-larger appetite have become more frequent and more profound. To deal with these limits and consequences, maybe another Norman Borlaug or another 100 Norman Borlaugs will come along, but might we have been better off stabilizing our growth and preventing both hunger and all the collateral damage to ecosystems? Why can’t we put growth on hold and enjoy our breathing room?

    Isn’t it at least worth considering the idea seriously rather than trying to bury it under an avalanche of tired insults?

  9. Sharon says:

    Ah, apologies if my humour missed the mark, Philip. I personally don’t think its unwarranted that those who use ridicule and a patronising tone should expect a gentle touch of the same! I don’t think I descended into unpleasantness, however.

    Although as Rob pointed out, Kristian’s piece would have carried more weight if the Enough is Enough report had been analysed rather than somewhat pompously dismissed.

  10. Chris says:

    Ehlrich predicted hundreds of millions of people starving to death; that is a bit different to people being hungry. So he was wrong and to say otherwise is perverse. I don’t know about the Mayans and the people of Easter Island, but the Romans didn’t die out due to lack of resources. They didn’t die out at all, they were invaded and the empire was broken up. There is no parallel there.

    “Limits to nature and to growth are a fact. There is only so much planet. Ask an astronaut.” – a common environmentalist/growth sceptic argument. We know this. The question is at what point do we reach this limit? 9 billion people? 12 billion? 20 billion? We don’t know, but we are some way off and are probably are very long way off. If population projections are correct, we will likely never reach the peak. Unless you have reason to say that we have reached the limit of the planet’s capacity here and now, it is fallacious to give capacity as a reason to stop growth here and now. In any case, economic growth is crucial to stopping the population explosion (birth rates falling once countries become rich). And economic growth is crucial to creating wealth in poorer countries.

    Finally, you assume that economic growth has to involve resource depletion. It can, and often has in the past, but growth comes from technology and efficiency, and neither of these require fossil fuels.

    Oh, and richer countries are happier than poorer countries, as numerous studies have shown.