Center for the Advancement of the Steady State Economy
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Three Glimmers of Hope for an Economic Transformation

by Brent Blackwelder

BlackwelderEcological economists, top scientists, and even a few financiers have put forth powerful arguments for moving to a steady state economy. Sometimes described as a true-cost economy, a sustainable economy, or a spaceship economy, the steady state offers a positive alternative to the delusion of endless growth.

Viewed from an environmental perspective, the need to transform the U.S. and global economic systems is becoming more urgent by the day — if you scan the headlines about global warming, biodiversity loss, and natural resource depletion, you’ll quickly get the picture. It turns out that the most important environmental policies of any nation are its economic policies. For example, there is no chance of stabilizing the ongoing climate chaos if the major economies of the world continue to reward fossil fuel usage and fail to include pollution externalities in their prices. In a true-cost economy, however, clean energy would be the cheapest, and fossil fuels would be too expensive to use.

Given the severity of the problems we face and the strong potential for steady state policies to solve them, the question is, “Why are nations failing to embrace this positive alternative?” There are many obstacles standing in the way of a sustainable economy. The skeptic would assert, “You are asking the most powerful nations in the world to change the cherished economic system they have been functioning under and embrace an economic system which no modern nation has ever used. It is a wild fantasy.”

There’s some merit to the skeptic’s argument — the suggested economic changes seem like a paradigm shift akin to those seen over the centuries in physics and astronomy. But given the unpredictability of paradigm shifts, we can encourage incremental steps toward an economic transformation.

A number of experts have laid out such steps. For instance, the economist Peter Victor has illustrated how Canada could achieve a sustainable economy. But even with a blueprint in hand, it’s questionable whether Canada or China or the U.S. or Brazil or India would ever start constructing such an economy.

Part of the problem stems from the international economic infrastructure. The continued push for economic expansion from global bodies such as the World Bank, the IMF , the G-8, the World Trade Organization, undermines intellectual support for the transformation from cowboy economies to spaceship economies.

Another obstacle comes from the extractive industries and the way they exert influence within governmental bureaucracies. These industries are propping up a business-as-usual approach to economics. If this approach continues, we can expect collapses around the world stemming from food and water riots, weather disasters, and ongoing erosion of life-support systems worldwide.

It’s tough to come up with plausible ways of overcoming these major obstacles, but three recent developments provide some much-needed hope. They may be long-shots for breaking through the resistance and spurring the transformation to a new true-cost economy, but they offer a chance.

Economic output and energy use are highly correlated. Data shown are for 175 countries in the year 2007. Sources: U.S. Energy Information Administration and the World Bank.

Economic output and energy use are highly correlated. Data shown are for 175 countries in the year 2007. Sources: U.S. Energy Information Administration and the World Bank.

The first glimmer of hope is emerging from the energy changes happening in Germany, which has become the world’s leader in electricity produced from solar and wind sources. Germans are aiming to generate half of their electricity from renewable sources within ten years. If the most powerful economies in the world were to replicate Germany’s energy policy, it would not only be a shift in the energy sector, but also a monumental shift in economics, given the way economic growth and energy consumption are connected.

The second glimmer of hope comes from growing concern about caring for creation on the part of religious congregations from many faith traditions. More and more religious organizations, liberal and conservative, are pointing to the excessive consumption in the global economy as destroying God’s creation. What if Pope Francis surprised everyone and included population stabilization on his agenda. His text could align with Genesis by envisioning a flourishing of all life on earth. That is why the blessing “be fruitful and multiply” is first given explicitly to all the animals on the planet.

A third glimmer of hope is arising from the surge of public outrage over corporate tax dodging and subsidies. Stories of financial fraud and abuse are popping up in the news coverage. The Economist’s Special Report on Offshore Finance (February 16, 2013) highlights the trillions of dollars stashed in offshore tax havens.

It’s scandalous that some of the wealthiest corporations in the world, such as General Electric, Apple, and Google, are paying little or no income tax. It’s equally scandalous that U.S. corporations continue to receive taxpayer handouts. The anger and unrest spurred by this situation offers a good opportunity to change the way businesses operate.

The obstacles to a establishing a true-cost, steady state economy are daunting, but now’s the time to get on board with efforts to overcome them. People are responding to the challenge and taking positive actions all over the world. I’ve summarized three of my favorites here, and I’m hopeful that you know of plenty of other efforts to create an economy that will work for people and the planet.

6 Responses to “Three Glimmers of Hope for an Economic Transformation”

  1. Tim Gieseke says:

    Will a new economy be instigated by the powerful policy-makers throwing a new economic blanket over us, or will it be weaved into the existing economy by the practitioners in their daily activities?

    Sure, it probably takes a bit of both, but I would ask in what sector(s) did the first economic transactions occur and why. I am afraid that if we depend on a new blanket woven from the top, it is going to smother many of those at the bottom – not maliciously, but via ignorance.

    We must be diligent, but patient. The practitioners, those in the trenches and isolated from the elite and intelligent, now have access to data and networks, which can be much more powerful in the practitioners’ hands than the theorists.

  2. Bruce E. Woych says:

    This is a very nice read; and intelligent. But it is parlor talk by people in position. There is no mention of the distortion that the all encompassing progression of distorted “wealth” has created in the proportions of reality. There is no mention in the waste institutionalized by “wealth” in its perverted form…nor even an attempt to bring “wealth” into sane proportions for motivational and incentive purposes. There is no mention of corruption, competition and control fraud. There is no mention of warfare and the ideology of perpetual war. I could go on like this but until the idealists of well healed position begin to assess their own peers and the process of progressive-regression we call no-conservative global supremacy…then we are simply speaking to a feel good audience and convincing an entire strata of activists that the intellectual community can “blueprint” this resource depletion and human rights nightmare into a “planned” global community through a far flung leap of faith in run away capitalism. Rather than “engineering” coffee table road maps to exotic islands in the sky. we would be much better off if the people on high shared a little re-engineering and tracked out the blueprint of precisely what, who, when, where and why things ARE going the way they have been and who is responsible for the destruction over corrections in the institutional systemics. This is essentially the 3rd century into a nationalistic model that has bubbled and popped several times and now seeks to “business plan” the next 50 years of supremacy over the globe…exploiting scarcity not solving it. Address “sustaining” WEALTH on this globe to a limited model of endurance and we will have the beginning of a solution to sustainability. Right now, in real time, wealth is being serviced to expand and grow by cut-throat corporate private equity strategists with tactical plannings that promise only to sustain the powerful with evermore control mechanisms over a planet that is becoming dominated by ruthless schemes and offshore practices that facilitate power dreams.

    In that regard, despite the critical tones of this comment I have high praises for Mr. Blackwelder’s recognition that “A third glimmer of hope is arising from the surge of public outrage over corporate tax dodging and subsidies. Stories of financial fraud and abuse are popping up in the news coverage. The Economist’s Special Report on Offshore Finance (February 16, 2013) highlights the trillions of dollars stashed in offshore tax havens.

    It’s scandalous that some of the wealthiest corporations in the world, such as General Electric, Apple, and Google, are paying little or no income tax. It’s equally scandalous that U.S. corporations continue to receive taxpayer handouts. The anger and unrest spurred by this situation offers a good opportunity to change the way businesses operate….” and suggest we …START THERE; DON’T STOP… AND NOT TURN BACK FROM TRUE EXPOSURE…NOT JUST ACKNOWLEDGEMENT OF A PUBLIC OUTRAGE.
    Bruce E. Woych
    Cultural Anthropologist

  3. Borderglider says:

    http://www.bloomberg.com/news/2013-02-27/germany-to-add-most-coal-fired-plants-in-two-decades-iwr-says.html

    Germany will this year start up more coal-fired power stations than at any time in the past 20 years as the country advances a plan to exit nuclear energy by 2022.

    New coal plants with about 5,300 megawatts of capacity will start generating power this year, the Muenster-based IWR renewable energy institute said in an e-mailed statement today, citing data from the German regulator. About 1,000 megawatts of coal-fired capacity are expected to come offline, it said.

  4. Surely transition must come from the bottom, where no company or people are served by global bodies like WTO etc. but sustained local business healthy over decades in total lack of permanent growth: the barber round the corner, the pub nearby, the tobacconist in my street, the shop selling gloves since three generations. Endless growth is needed by corporations DESIGNED for endless growth. Take a close look: the overwhelming part of our economy, SME´s round the corner, are NOT designed for permanent growth but more or less to be as they are for years and decades. Lean out of the window and see prove! We need an economic theory that describes THEIR world as blue print for the big picture, not the world of Apple, General Electric & Co. To abandon endless growth is round the corner, literally speaking.

  5. For some additional embellished thoughts on the topic of taxpayer handouts and the profits they create, see my latest blog post titled “Small Manufactured Article For Adornment” at the following link.

    http://ecologicalleadership.blogspot.com/2013/03/small-manufactured-article-for-adornment.html

  6. There is a lot to like in what you are suggesting. I do wonder, however, about the term “Steady-State Economy”. My background is fluid dynamics, computational mathematics and ecology, so please excuse me if I don’t know your precise economists definition of “Steady-State Economy”. But I suggest that steady-state is an illusion, except as a mathematical idealization.

    I would suggest that our present global population needs to be reduced in order to maximize human well-being. I’d also suggest that it should be our objective to achieve “Real Economic Growth” — by which I mean that as we expand our knowledge and find better ways to do things, we deploy this advantage to make lives better rather than making more lives or making more lives that are more miserable.

    I recommend to you the excellent book by Paul Colinvaux “Fates of Nations: a biological theory of history”. The basic point that Colinvaux makes is that population expands every time humanity learns something that builds capacity. Thus, the advantage gained is eventually dissipated by greater numbers.

    The present-day fixation on GDP is a total nonsense, of course. The surest way to grow GDP is to increase population. Unfortunately, on a resource-limited planet, the increase in population means less GDP per individual. Of course, I recognize that GDP is a poor metric, even when normalized by population. For now, I’ll just say that I’d prefer “Real Economic Growth” (and leave it for another day to define exactly what that means).