“Driving” the Growth of Local Economies: Farming or Financing?

/0 Comments/in , , , , , /by

by Brian Czech

Among today’s headlines is the pedestrian-sounding “Colin Hanna: Economic growth, new jobs, strengthened pensions.” Author Hanna, surely a well-meaning soul, is pitching the merits of the private equity “industry.” The problem is, Hanna goes so far as to reference “the industry’s clear record of driving economic growth.”

Hanna’s article reminds me of the many, many (oh, so many) times I’ve read about tourism, bowling, and even gambling “generating” money for a town, county, state, country, or planet! Once again, it’s time to set the record straight.

The notion of the private equity industry “driving economic growth” is misleading at best, and disastrous at worst. It is only misleading when the pedestrian-sounding column is glossed over by locals who think “that’s nice” and forget about it. It is dangerous when used by local decision makers to inform the economic development plans of towns, cities, and counties. It is disastrous when it becomes a widely-accepted paradigm guiding the economic strategy of nations.

Let’s consider the macroeconomic fundamentals: It is agricultural and extractive surplus that allows for the division of labor into heavy and then light manufacturing sectors. Along the way, heavy and light service sectors (including the financial sector) are also developed. Such is the “trophic structure” of the economy, which I’ve written about at length in books such as Shoveling Fuel for a Runaway Train and Supply Shock.

It’s a “trophic” structure because it mirrors the economy of nature, where plants support primary consumers (such as rabbits), which in turn support secondary consumers (such as foxes). In other words, nature is comprised of “trophic levels” —a basic term in ecology—and so is the human economy.

To think that financing – of Dunkin Donuts and Hilton hotels no less – is “driving” the economy is to commit the “self-sufficient services fallacy.” The fact that private equity firms hire a lot of people has nothing to do with “driving.” McDonald’s hires a lot of people. So does General Electric and UnitedHealth. They help pack the cars and they sure crowd the roads, but none of them are driving. It’s the farmers, loggers, miners, fishers, that fill up the tank and do the driving.

Some of these drivers are on dead-end roads, too. The countryside is littered with mined out quarries, rusted old wells, and fished-out rivers. Sustainable “driving” is all about safe speed, enough room for all the “cars,” and ultimately renewable “fuels” (literally and figuratively).

So if you—you in western PA, the eastern U.S., North America, or Planet Earth—want to support the drivers of the economy, your best bet is to support the farmers. Furthermore, at this point in history, “supporting” our farmers means protecting the lands needed for ecologically sustainable production. And that boils down to a steady state economy with stabilized population and per capita consumption.

If local, regional, and national authorities—supercharged with international trade agreements—are all about GDP growth, the pressure will be too much and our farms will end up like mined out quarries, rusted old wells, and fished-out rivers. Down will come Dunkin Donuts, Hilton hotels, Yankee Candles, private equity firms, and the Pennsylvania State Employees’ Retirement System.

So appreciate your local Colin Hanna, but don’t let him snow you into thinking the financial sector is “driving” the economy. The road to hell is filled with good intentions—and fuzzy notions.

Neocornucopianism and the Steady State: Part I

/0 Comments/in , , , , , , , /by

The cornucopia is an age-old symbol of celebrating plenty. Today, the world has plenty and a new goal is needed. (Image credit: Yzrael. Image used under Creative Commons Attribution-Share Alike 3.0 Unported license.)

By Josh Farley

Perhaps the main reason people reject the need for a steady state economy is some form of cornucopianism, the belief that technological progress will overcome all ecological and physical limits, allowing endless economic growth into the indefinite future. Cornucopianism has several flavors, and I will describe three: mainstream economics, eco-modernism, and singularity theory.

Mainstream Economics Fuels Cornucopian Ideas

First, let’s examine how mainstream economics feeds a belief in cornucopianism. Most mainstream economists argue that as resources become scarce, their prices increase and that this incentivizes suppliers to produce more, innovators to develop substitutes, and consumers to demand less. They claim centuries of empirical support for their beliefs. Take for example the need for energy sources to fuel societies. The English economist William Stanley Jevons once said there was no conceivable substitute for increasingly scarce supplies of coal, but then we discovered oil. Oil production in the U.S. peaked in the 1970s, declining rapidly thereafter, and global production would inevitably peak sometime around 2012. Then the oil industry found deep sea deposits and refined hydraulic fracturing, while innovators developed alternative energy technologies. Oil production in the U.S. has surged back to its previous levels, global production has continued to rise, and solar energy prices are plunging.

To mainstream economists, climate change is a bit pesky, but it just requires internalizing ecological costs into market prices. They argue that technological advance, together with economic growth, will save us from any scarcity. But the folly in this idea is that demand does not stabilize or reduce just because new innovative sources (of fuel, for one example) become available. Demand continues to rise in parallel as new sources are found, new technologies are created, and economic growth is pushed to accelerate—to find more and use more. Demand becomes a runaway train, one that drives not an overflowing cornucopia of supplies (fuels, products, or anything else humans need), but rather drives a perpetual cycle of endless need that is never satisfied, an overflowing cornucopia with food going rotten.

Eco-Modernism as Cornucopianism

The second flavor of cornucopianism I want to explore is eco-modernism. Eco-modernists recognize that human impacts on our global ecosystems are currently unacceptable, but they believe that humanity can refocus technological progress to reduce these impacts. Eco-modernism believes that technology can end our reliance on nature. That we can use nuclear power to extract atmospheric gases and terrestrial minerals to build food in a laboratory, eliminating the ecological damage from agriculture. That we can extract carbon from the atmosphere and convert it directly into hydrocarbons.  That if the climate grows too hot too fast, we can geo-engineer some cooling by throwing aerosols into the atmosphere. In their own words, eco-modernists say: “we affirm one long-standing environmental ideal, that humanity must shrink its impacts on the environment to make more room for nature, while we reject another, that human societies must harmonize with nature to avoid economic and ecological collapse,” (see the ecomodernism manifesto). They are saying that we need to accelerate, not move toward a steady state.

Singularity as Cornucopianism

Perhaps the most extreme flavor of cornucopianism is singularity theory. Singularity theorists are not concerned by the exponentially growing impacts of human activities on global ecosystems, because they say knowledge is growing super-exponentially, which means the power of human knowledge will become infinite by 2045.  With infinite knowledge, they say, we can undo all the previous harm done to earth’s ecosystems, or simply abandon the earth and even our human bodies all together. We can download our consciousness into solar powered computers floating in space and virtually experience any reality we choose. This may sound far-fetched, but the idea has gained traction among Silicon Valley hotshots.

Truly novel technologies are inherently unpredictable: Since we can’t know what will emerge, we can’t possibly know the odds that it will emerge on time or truly address the problems we think it might. Betting the future of civilization and biodiversity on gambles with unknown odds is unwise to say the least. Rather than arguing over an unpredictable future, I propose neo-cornucopianism as a new argument for a steady state economy.

Neocornucopianism: We Already Have Plenty

I coin the term “neocornucopianism” to describe the recognition that, in wealthy nations, the horn of plenty is already overflowing, so the desire to establish an endless plenty is an empty, misplaced, and problematic desire.

The average American home has nearly doubled in size since the 1950s, and consumption has grown even faster: Americans rent an average of 21 square feet of storage space per person and generate more than 250 million tons of garbage per year, including 40% of the food we purchase. It’s to the point where we are actually paying to get rid of useful things. Additional production now makes us worse off.

A growing awareness of these trends leads to neocornucopianism: an idea, a mindset, and a lifestyle. Neocornucopians recognize that many of the new things they want will be thrown away within a week. So wanting and demanding less (instead of the endless pursuit of more) makes sense for personal choices, individual finances, local, state and national policies and for the larger global economic system.

Want to learn more? Stay tuned for future essays on this topic at the Steady State Herald, including articles in which Farley will provide examples of cornucopian wealth, with insights into the extreme inefficiency, injustice and unsustainability of our current system, as well as exploring a just and sustainable steady state alternative.

Population and the Steady State Economy

/0 Comments/in , , , , , , , /by

(Image credit: Sérgio Valle Duarte, Wikimedia Commons)

By Max Kummerow

Sir David Attenborough remarked in a 2011 presidential lecture to the Royal Society that “every environmental and social problem is made more difficult and ultimately impossible to solve with ever more people.” Wherever women’s status has improved and societies modernized, he said, birth rates have fallen. He begged his audience to “talk about population.”

We often hear politicians call for “more jobs.” Growing populations require a bigger economy to prevent unemployment. So if you assume population growth is good and/or unavoidable, you probably favor economic growth to prevent unemployment. And even if there was a steady-state population, the world desires (and some of it needs) higher incomes, more consumption, and more wealth.

Many regard growth as a moral imperative to alleviate extreme poverty. Two billion people still live on two dollars a day. How can their lives improve without economic growth? Attention is focused almost exclusively on economic growth as the path to supporting more people at higher living standards. But there is another path.

A conventional measure of economic well-being is Y/P, or output divided by population (that is, per capita income). Y in this equation represents GDP (gross domestic product). We can acknowledge that a growing GDP per capita may increase wellbeing, but only when GDP is not beyond the optimum level. A growing GDP causes environmental, economic, and social problems. Various measures of well-being (such as the Genuine Progress Indicator, the Happiness Index, and the Human Development Index) help us determine when GDP is beyond optimum. Indeed, numerous analysts inside and out of the CASSE network believe that is now the case – that GDP is beyond the optimum – and perhaps has been so since the mid-late 20th century.

(Graph created from UN World Population Prospects 2017 data.)

 

In a crowded world facing physical limits to growth, then, why not think more about reducing the denominator? If population falls, we can get by with fewer jobs. There will be more land per family for poor subsistence farmers. Wages will tend to rise and the prices of commodities—housing, fuel, food, etc.—will tend to fall.

To examine the problem if we do not reduce population, let us consider a simple equation comparing the Earth’s carrying capacity—or its ability to provide all that we need from it—with our use of the supply. When we exceed carrying capacity, we also reduce it. Carrying capacity is the Earth interest generated by Earth principal (natural capital, in other words). When we use more in a year than the Earth interest generated that year, we use up some Earth principal, so next year less interest can be generated. Many ecological economists and sustainability scholars have described in theoretical and empirical terms how we are currently over long-run carrying capacity, and we are using up Earth principal (biodiversity, for example). So every year there is less interest and less long-term capacity.

Before family planning, most women bore many children, and infant and maternal mortality rates were extremely high. In The Wealth of Nations Adam Smith wrote, “It is not uncommon… in the Highlands of Scotland, I have been frequently told, for a mother who has borne twenty children not to have two alive” (Book 1, Chapter 8).

In 1970, global fertility still averaged five children per woman. Now the global average fertility rate has fallen to 2.4 children per woman. In about 90 countries, women currently average less than 2.1 children each, which is the replacement fertility rate (two children reaching adulthood for every couple equals replacement). When fertility falls, it takes about 50 years for “demographic momentum” to play out so that growth stops. Young populations have to grow up, have children and age before death rates exceed birth rates. That has finally happened in a handful of countries. Germany and Japan, with declining populations, are doing much better than high fertility countries. Scarcity caused by growth is not alleviated by more growth. Growth is the problem, not the solution.

Country average fertility rates currently range from about 1.1 (Singapore, now one of the richest per capita) to 7 (Niger, one of the poorest). Europe’s fertility averages about 1.7. Sub-Saharan Africa’s fertility rate of 5 children/woman is falling slowly. But death rates by country are falling faster, so natural increase (births minus deaths) is higher now than in 1960 (the current rate is about 2.7% population growth per year).

Globally, annual population growth fell from 2% in 1970 to 1.1% in 2010. Meanwhile, world population doubled from 3.5 billion to 7 billion. World population is therefore growing as fast as ever (2% x 3.5 =1% x 7) and increasing by about one billion every 12 years, which means it is headed from 3 billion in 1960 to 10 billion by 2050.

(Graph created from UN 2017 population prospects data.)

Completing the fertility transition in places with corrupt governments and poor people will be difficult. Fundamentalists in all religions have more children. But modernization helps fertility rates fall, especially education and improving the status of women. Low fertility rates in Cuba, Iran, Brazil, Botswana, Thailand, and about 85 other countries shows that fertility transitions are possible anywhere. There are trade-offs, but countries with small families are usually better off economically and their children tend to be better educated.

Lower fertility rates have numerous benefits for individuals, families and societies. It is possible to stabilize world population and to reduce population back down toward global carrying capacity. Education can help change family size norms to reflect the reality that we live on a small planet that doesn’t get bigger when we add more people.

With declining population, the strongest arguments for economic growth disappear, and a steady state economy with universal prosperity becomes both physically and politically more feasible.

Max Kummerow is a retired Real Estate professor. He has presented a dozen papers at the Ecological Society and Population Association and other meetings advocating completing the global demographic transition.

 

 

Yale/Mara Lavitt

A Not-So-Nobel Prize for Growth Economists

/6 Comments/in , , , , , , /by

William Nordhaus shaping vulnerable minds in his Yale classroom – Oct. 8, 2018.  (Photo credit: Yale/ ©Mara Lavitt)

by Brian Czech

How ironic for the Washington Post to opine “Earth may have no tomorrow” and, two pages later, offer up the mini-bios of William Nordhaus and Paul Romer, described as Nobel Prize winners.

Without more rigorous news coverage, few indeed will know that Nordhaus and Romer are epitomes of neoclassical economics, that 20th century occupation isolated from the realities of natural science. Nordhaus and Romer may deserve their prizes for economic modeling, but each gets an F in advanced sustainability.

Nordhaus won his prize (actually the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel”— not the Nobel Prize per se) for his mastery of mathematical modeling. He applied his skills to carbon taxes for lowering greenhouse gas emissions. All along he prescribed economic growth – the key driver in greenhouse gas emissions—as the way to afford such taxes!

In 1991 Nordhaus uttered one of the most iconic sentences in the history of unsustainability: “Agriculture, the part of the economy that is sensitive to climate change, accounts for just 3% of national output. That means that there is no way to get a very large effect on the US economy” (Science, September 14, 1991, p. 1206).  Think about that. He must have set a graveyard’s worth of classical economists (Adam Smith, David Ricardo, John Stuart Mill…) to rolling. They’d be rolling in laughter if the folly of Nordhaus wasn’t so dangerous.

No follow-up should be needed to expose the ludicrous nature of Nordhaus’s statement, but just in case: Agriculture is the very foundation of the economy. No agriculture, no anything else. Think about it. Any hit on agriculture—whether from climate change, bad luck, or stupid policies—has a magnified effect on the entire, integrated economy. Nordhaus’s “3%” statement was a classic case of ivory-tower cluelessness.

Too many trees for seeing the forest?

Romer, meanwhile, deserves some credit for his elegant theory of “endogenous technological change,” which took the work of Robert Solow (the father of economic growth theory) to the next level by describing in nuanced detail how R&D leads to technological progress. That said, there has never been a bigger forest missed for so many trees. For him, all that mattered was capital and labor; he said nothing about land, natural resources, or the environment.

Some readers may recall Julian Simon, the ultimate Pollyanna who claimed in the 1980s (and I paraphrase after thoroughly reviewing his 813 page Ultimate Resource II during my post-doc studies), “Sure, there are environmental problems caused by growth, but the more people we have, the more brains we have to solve the problems. Therefore, the more people we have the better, without limit forever.” Romer’s work amounted to a highly nuanced repetition of Simon’s self-christened “grand theory.”

Romer said in a nutshell: We have capital and labor. Part of the labor force is devoted to research and development (R&D). As limits arise, we get over them with more R&D. So we need ever more people, with ever more devoted to R&D, to keep raising the bar for GDP.

For Romer, it was as if ideas alone could overcome water shortages, biodiversity loss, mineral depletion, soil erosion, pollution, and climate change. As if ideas could be perpetually borne out of human minds struggling in a degrading environment, a warming climate, and an imperiled agricultural base (not to mention a crowded, noisy, and stressed out society). Romer was like a cook thinking up recipes with no idea where the ingredients would come from.

A generation and then some of economists and business students have been led to the exceedingly dangerous myth that there is no limit to either population or economic growth. Nordhaus and Romer have done as much as anyone to lead them into such a fallacy. Yet politicians and publics heed their advice, while the media regurgitates their fallacious notions.

Does Earth have “no tomorrow,” as the Washington Post wondered? One thing is for sure: Any hope for a happy tomorrow on Earth means rejecting the neoclassical economics of today. Even when such economics wins the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.”

 

Gross Domestic Problem On World Animal Day

/0 Comments/in , , , , , , , /by

Nervous now, future worse: pronghorn antelope at the edge of a growing economy. (Photo Credit: Michael Shealy)

~Republished from The Daly News for World Animal Day 2018~

 

by Brian Czech

If you like animals, your feelings may have been nurtured by “Hedgehogs Being Adorable,” “Baby Hippo Has Won Our Hearts,” and other such gems. The Huffington Post, The Animal Blog, and various animal-lover media take a heartfelt approach to the appreciation of animals—wild as well as domesticated—reminding us of the needs and vulnerabilities of our fellow creatures. It’s a refreshing approach compared to the stodgy science and economics of conservation.

And it’s important. Mahatma Gandhi said, “The greatness of a nation and its moral progress can be measured by the way in which its animals are treated.” Abraham Lincoln said, “I care not much for a man’s religion whose dog and cat are not the better for it.” Animal welfare is a barometer of national “goodness” in a sense that resonates with our common sense.

Yet if we are serious about animal welfare, we have to get beyond the mere adoration of hedgehogs and hippos. We have to face up to the big-picture, systematic erosion of wild animal welfare. It’s all around us and getting worse by the day, and our public policies precipitate it.

The most prevalent source of animal suffering is habitat destruction. Habitat includes food, water, cover, and space. When any of these elements are destroyed or depleted, wild animals suffer and often die more miserable deaths than if killed by hunters or predators.

Some animals survive an initial wave of habitat destruction only to be stranded in an unfamiliar, unforgiving environment. When a food or water source is destroyed, wild animals may starve, die of thirst, or suffer from malnutrition and the associated agonies. When thermal cover is lost, animals expend valuable time and energy trying to regulate body temperature. This lowers the time and energy available for feeding, playing, and mating. When hiding cover is lost, wild animals experience fear and stress, seeking cover from predators that may or may not be present.

What kind of a life does that sound like? It would be like getting thrown out of your home, into a perilous world with no social net, no health system, no Salvation Army, and no street corner to beg from. Yet it’s the life we’ve been forcing animals into by the millions. How can we stop?

We often hear of “human activity” being the cause of habitat loss. That’s a start, recognizing our basic role in the problem, but we have to dig deeper to detect precisely what type of human activity is problematic. After all, the habitat destruction caused by humans beings isn’t spiritual activity, or neighborhood activity, or political activity (at least not directly), but almost always economic activity.

The macroeconomic nature of the problem is evident when we consider the causes of species endangerment. These causes are essentially the sectors and byproducts of the whole, interwoven economy, starting with agricultural and extractive sectors such as mining, logging, and livestock production. These activities directly remove or degrade the habitat components required by wild animals.

Another major cause of endangerment is urbanization. Urbanization reflects the growth of the labor force and consumer population as well as a variety of light industrial and service sectors. Few types of habitat destruction are as complete as urbanization. While extractive activities can be a traumatic experience for the denizens of wildlands, logging, ranching, and even mining usually leaves some habitat components. But when an urban area expands, it does so with pavement, buildings, and infrastructure. These developments are devastating to most of the animals present.

The economic system extends far into the countryside, too. Roads, reservoirs, pipelines, power lines, solar arrays, and wind farms are examples.

It would be hard to conceive of a more prevalent danger to animals than roads. Roads and the cars upon them leave countless animals mangled and left, during their final hours, to be picked apart by wild and domestic scavengers. Power lines induce electrocution, a significant source of bird death and crippling. Power line collisions cause their share as well. Wind farms and solar arrays, thought to be the keys to “green growth,” are the latest hurdles for migratory birds.

Pollution is an inevitable byproduct of economic production. Pollution is an insidious and omnipresent threat to wild animals. Whether it’s nerve damage from pesticides, bone loss from lead poisoning, or one of the many other horrible symptoms of physiology gone wrong, pollutants ensure some of the most excruciating diseases and slowest deaths in the animal kingdom.

Climate change is another threat to species, although its mechanisms are less direct. Temperature is a key factor in the functioning of ecosystems and the welfare of the animals therein. Climate change is pushing polar bears and other polar species off the ends of the earth; at what point will this climate-controlled conveyor belt stop? Climate change, too, is a result of a growing (and fossil-fueled) economy.

We should give thanks for the Humane Society, International Fund for Animal Welfare, and Society for the Prevention of Cruelty to Animals. These and related organizations do the good work that Gandhi and Lincoln would have endorsed. Yet when is the last time you’ve heard these organizations give a hoot about economic growth, the single biggest threat to animal welfare?

And why does no one put in a word for our furry and feathered friends when Congress, the President, and the Fed pull out all the stops for GDP growth? Where are the advocates of humane treatment of animals, when the biggest decisions are made about the rate of habitat loss and therefore animal suffering? When a hundredth percentage point less in GDP growth could save hundreds of thousands of animals a year?

Why don’t we have a mainstream media, which isn’t afraid to expose nastiness to horses and chickens, talking about the millions of animals suffering at the cumulative hand of economic growth? Has economic growth become the inconvenient truth for animal welfare?

It’s definitely inconvenient—and that’s an understatement—for millions of animals.

 

The Poison Beer of GDP

/1 Comment/in , , /by

 

By Herman Daly, CASSE Economist Emeritus – October 3, 2018

Disaggregating reported GDP growth to reveal the differences in growth by income class, as per the Schumer-Heinrich Bill, is a good idea. After all, telling us, say, that average income grew by 4% is not nearly as informative as telling us that the richest ten percent received the entire growth increment while the bottom ten percent suffered a decline in income. Average income and growth rates are like the famous recipe for “50% rabbit stew”—one rabbit, one horse. We already know the extreme inequality in the distribution of wealth, of income, and of the growth increment, even without the Schumer-Heinrich Bill. However, if that information is incorporated every time new GDP figures are reported it will be much harder to ignore. Of course, that is exactly why the bill will be opposed by those who want us to believe that we are all getting 4% better off every year or that “a rising tide lifts all boats”, when in fact a rising tide in one place means an ebbing tide somewhere else.

Once we correct GDP for ignoring distribution, then perhaps we can go on to correct other defects, such as the fact that it adds defensive expenditures made to protect ourselves from the unwanted costs of growth (pollution, depletion, congestion, crime, etc.) while failing to subtract as a cost the damages that made the defensive expenditures necessary in the first place. For example, damages caused by an oil spill are not deducted, but expenditures to clean up the spill are added; depletion of soil fertility is not deducted, but expenditure on fertilizer is added, etc.

In addition, the very concept of income in economics is defined as the maximum amount that a community can consume this year and still produce and consume the same amount again next year, and the years after. The income from a fishery is its sustainable catch; the income from a forest is its sustainable cut. Consuming more than that is capital consumption, not income. Yet, as far as GDP is concerned, we can cut the entire forest and catch every fish this year and count it all as income—there is no rule against counting consumption of natural capital as income in GDP accounting.

If our main goal is to increase GDP rapidly, then we will not want to slow it down for concern about equity of distribution, or by correcting the asymmetric accounting of defensive expenditures, or by correcting the fundamental economic error of counting capital drawdown as income.  Maximizing GDP growth will lead to less concern for distributional equity, more depletion and pollution, and more consumption of natural capital.

I am reminded of a story told by G. K. Chesterton. A pub was serving poison beer and customers were dying. Alert citizens petitioned the local magistrate to close down the offending establishment. The cautious magistrate said, “You have made a convincing case against the pub. But before we  can do something so drastic as closing it down, you must consider the question of what you propose to put in its place…”.  Contrary to the magistrate you don’t need to put anything in the pub’s place. Nor is it really necessary to put anything in the place of the poison beer of GDP. As it happens, however, there are in fact better things to put in its place, such as the Index of Sustainable Economic Welfare, National Welfare Index, and Genuine Progress Indicator.

Herman DalyHerman Daly is an emeritus professor at the University of Maryland School of Public Affairs and a member of the CASSE executive board. He is co-founder and associate editor of the journal Ecological Economics, and he was a senior economist with the World Bank from 1988 to 1994. His interests in economic development, population, resources and environment have resulted in more than 100 articles in professional journals and anthologies, as well as numerous books.

NGOs Challenged to Back Up Their Rhetoric

/5 Comments/in , , , , , , /by

The following letter was sent to the top ten environmental NGOs today, challenging them to a debate on the topic, “Is there a conflict between economic growth and environmental protection?” Recipients included the National Wildlife Federation, Defenders of Wildlife, World Wildlife Fund, Sierra Club, Friends of the Earth, Environmental Defense Fund, Natural Resources Defense Council, The Nature Conservancy, National Audubon Society and the Izaak Walton League.

An Act of Congress for the Steady-State Timeline

/6 Comments/in , , , , , /by

By Brian Czech

Some years down the road—probably decades—we’ll pass the Full and Sustainable Employment Act, calling for a steady state economy in the USA. This is our vision at CASSE. When that day comes, scholars and commentators will construct a timeline demarcating the major steps along the way. On that timeline, August 28, 2018 will be duly noted. This was the day when the Measuring Real Income Growth Act, “MRIGA,” was introduced in the U.S. Senate by Chuck Schumer (D-NY) and Martin Heinrich (D-NM).

Even if MRIGA is never enacted, the Senate bill will belong on the timeline. It recognizes one crucial point on the way to a steady state economy: namely, that something is wrong with using GDP as an indicator of success. It represents an American paradigm shift, away from the bankrupt notion that “a rising tide lifts all boats” to the reality that some boats are falling to pieces while others are accruing new decks.

Now it’s true that MRIGA is far from a Full and Sustainable Employment Act. It’s all about a more equitable distribution of wealth, and says nothing about limits to growth. And that is precisely why it will be an early mark on the steady-state timeline, as opposed to the culmination of steady state economics.

Steady state economics centers around the themes of sustainability, distribution of wealth, and allocation of resources. When asked for advice, the steady state economist will prescribe stabilized GDP (for sustainability), an equitable distribution of wealth, and efficient allocation of resources using a variety of approaches. In contrast, conventional economics deals almost entirely with the allocation of resources by prescribing especially the “free market.”

Similarly, American political history has favored the free market. The American Constitution was conducive to the fast track of a capitalist economy. The founding fathers – and certainly subsequent politicians – emphasized economic freedom over issues of fairness and sustainability.

As we start bumping up against limits to growth in the 21st century, some cold hard facts reveal themselves. One is the accelerating pace of environmental deterioration. Another is that a rising tide no longer lifts all boats. When it takes drastic measures to grow the economy – including the revocation of longstanding environmental protections – the benefits accrue to fewer individuals, such as oil and chemical company executives.

Chuck Schumer explaining the bill on C-SPAN.

Environmental deterioration is noticed by ecologists and overlooked by most others, while the general inability to get ahead financially is experienced by the vast majority of individuals. Therefore we can expect political action on the distribution of wealth before any action on protecting the environment, much less any steady statesmanship to intentionally limit the size of the economy. And this is precisely what we are seeing in MRIGA: political action on the distribution of wealth, with no heed paid to sustainability (in the current bill at least).

So we suffer no illusions that Schumer and Heinrich are attacking GDP out of a concern for environmental protection or even long-term economic welfare. Even their apparent concern for the current distribution of wealth doesn’t hide the obvious fact that MRIGA is a political response to President Trump’s braggadocio over GDP growth rates. Nevertheless, the mere fact that Schumer and Heinrich focused in on GDP, rather than for example a progressive tax reform, will help us immensely as we raise awareness of the trade-off between GDP growth and environmental protection, economic sustainability, national security, and international stability.

Unfurling the Banner at the Steady State Herald

/0 Comments/in , , , , , , , , , , , /by

~Steady State Herald Premiere~

By Brian Czech

It’s been quite a run with our CASSE blog, the Daly News. Regular readers will recall a consistent weekly column from March 2010 through late 2015. Then for a couple years it was hit-or-miss, for reasons already explained (in a Daly News entry, naturally.) Now we’re back to blogging regularly under a new banner: the Steady State Herald!

Well, almost regularly. We do have a technical glitch to overcome first. The CASSE website has gotten bogged down with old plug-ins, programming bugs, and a generally creaky platform. We must fix it, thoroughly, and that process begins this week. This also means our blog (which happens to be at the center of the technical difficulties) will be static for the time being.

We will notify our subscribers and signatories when we’re rolling again with the next article of the Steady State Herald, most likely before summer is officially upon us. Meanwhile it won’t be such a bad thing for readers, new and old, to reflect a bit on the topics and events we covered with the Daly News. This article should help us do just that.

So as we unfurl the new banner of the Steady State Herald, let’s toot the old horn one last time for the Daly News.

“Daly News” was a play on words for capitalizing on the good name of Herman Daly, the champion of steady state economics. The Daly News was the flagship communications tool for CASSE during our formative stages. We published approximately 246 Daly News articles, with Herman Daly and yours truly penning 60 apiece. Brent Blackwelder wrote 50 more, and Rob Dietz (serving concurrently as CASSE executive director) another 40. We’ve had dozens of guest authors and semi-regular contributions from James Magnus-Johnson (20) and Eric Zencey (15).

With the Daly News, we proved there is plenty of news – not to mention opinion – on limits to growth and/or the steady state economy. Even given that theme, our articles ranged far and wide in style and in substance. We came at our topics from philosophical, theological, ecological, economic, historical, political, sociological, and psychological angles.

We used every tenor from sober prescriptions for public policy to hyperbolic parody. We celebrated anniversaries and we posted obituaries. We covered the terrain from local to global. Through it all, we kept to the tenets of a 501(c)(3), non-profit educational organization. We never lobbied for a candidate, but we sure critiqued a number of them, all across the political spectrum.

We should all – producers and consumers of the Daly News – thank Herman Daly for the privilege of using his name. Those familiar with Herman’s modesty won’t be surprised that he was never comfortable with the moniker. But “Daly News” helped to put us – CASSE and our blog – on the map, especially in the field of ecological economics and in the surrounding, broader terrain of political economy.

With Herman’s name gracing our blog, each new article came out of the starting blocks with the traction of credibility. The name also compelled our authors to take their task seriously and to seek… if not perfection, the best of our abilities and perhaps a more civil discourse. The quality of articles was such that the Daly News was often cross-posted at the request of other organizations. It compelled or provoked many follow-ups; numerous articles still do. The Daly News helped CASSE win the 2011 Best Green Think Tank Award.

So yes, we did capitalize – in the best sense of the word – on Herman’s name. We also recognized some trade-offs from the beginning. One of them was the opportunity cost of not being able to send other valuable signals with the name of the blog. And so we come to the naming of the Steady State Herald.

Naming a blog is a bit like designing a logo. With a logo, you only have so much space, and the image must send a clear and instant message. Ideally it will also pique the curiosity required for further contemplation, and in the process convey additional nuance.

With a blog, you only have so many syllables, and they must send a clear and instant message. Ideally they will also pique the curiosity for further contemplation, and in the process convey additional nuance.

“Steady State Herald” has five syllables and readily rolls off the tongue. It’s a phrase that clearly conveys what our blog is about, especially with the subtitle, “Ushering in the Steady State Economy.” Now it’s true that “steady state economy” is not yet in the vernacular. So, just as some had to contemplate the meaning of “Daly News” (because not everyone knew of Herman), “steady state” won’t instantly connect with everyone. Yet the phrase remains the best thing we have going to convey, very quickly, the concept of a stabilized, sustainable economy. (See how quickly the syllables add up without using “steady state”?)

We’ve analyzed the rhetorical properties of “steady state economy,” as well as the technical and linguistic. We’re committed to using the phrase. We are, after all, the Center for the Advancement of the Steady State Economy. We remain confident the phrase “steady state economy” has the potential to be writ into public policy as well as implanted in the vernacular. We come a step closer, we think, by using the phrase as the very title of our blog.

That said, you can’t just call a blog “Steady State,” or even “Steady State Economy.” A blog is not a state (unless you really want to argue), nor is it an economy. So what else could you call it? We considered many examples, and among them were:

  • Steady State Times
  • Steady State Chronicles
  • Steady State Gazette
  • The Steady Statesman
  • The Steady Statement

You get the picture. We thought of the usual suspects; the news-papery nouns to couple with “Steady State.” We considered a few minor plays on words, too. We ultimately chose “Herald” as the proper coupling.

We’d all be happier if “Chronicles,” for example, was the appropriate coupling. Such would be the case if there was enough public awareness about limits to growth. Things would be happening toward steady-state policy reform and steady statesmanship in international diplomacy, and these happenings would warrant chronicling.

Unfortunately the vast majority of citizens haven’t connected the dots from biodiversity loss, pollution, climate change, noise, congestion – and many other indicators of illth– back to GDP growth. It may be the case that the majority doesn’t even recognize some of the indicators themselves. That seems to be true of climate change, for example, which happens so slowly (so far) as to escape the notice of casual citizens. The human race has become the frog in the metaphorical pot, oblivious to the perils of perpetual economic growth.

So we need a herald to awaken our fellow frogs from their slumber. This herald can’t be just another big mouth. He or she – or it, in the case of a blog – isn’t going to help matters by shouting oxymoronically for “green growth” or belting out a chorus of Kuznets Curve Kumbaya. Some people like to complain about “Cassandras,” but we think it worse to live in an age with so many Pollyannas. Certainly it’s a dangerous world when naïve notions of perpetual GDP growth prevail in the midst of melting ice caps, the Sixth Great Extinction, and the Anthropocene in general.

Let’s also recall that Cassandra was always right – never wrong – with her warnings to the Trojans. Her only curse was that no one believed her. If there were fools in this mix, Cassandra wasn’t one of them. The Pollyanna, on the other hand, is disastrously wrong. Her naïve “optimism” leads others astray, right down the path of least resistance.

So we eschew simplistic notions of “positive” messaging. We’re not optimists, pessimists, or notionists at all. We are, first and foremost, realists. We understand limits to growth, and we know we must do the yeoman work of rowing upstream in the river of political economy. We’re equal parts Cassandra, David, and Paul Revere. We won’t suffer Pollyannas, we’ll fight Goliath, and we’ll awaken you with our warnings. We ask only that you spread them, because we long for the day the Herald may be aptly renamed the Chronicles, Times, or Gazette.

Stay tuned for the blogroll of the Steady State Herald…