Freedom and Government in a Steady State Economy

In a steady state economy, citizens exercise as much freedom as possible without impinging on the freedom of others. Stable numbers of people consuming sustainable levels of resources means that each person has more freedom to pursue desired activities. Economic institutions are designed to respect ecological limits, but personal choice is maximized within that institutional framework. Numerous governmental formats could be used to strike this balance between institutional limits and personal choice. A steady state economy can exist in a constitutional democracy with a common-sense mixture of markets and market regulations. We would continue to employ markets for what they do best — use prices, supply, demand, and consumer choice to allocate goods and services. But many functions that are not efficiently handled by the market, such as how big to grow or how to treat commonly held natural resources, would instead be decided by other democratic institutions.


More of this…

With an economy structured to prevent
consequences from too much growth, we
know where we stand and we are free to
choose where we want to go.

Image credit: Redgum


Impingement as Limits Are Reached in a Growth Economy

In an economy that is growing bigger, more people are consuming more stuff — that is the very literal meaning of economic growth. The increasing scale of economic activities adds more potential for people to get in each other’s way. A simple example involves the number of cars on the road. When a road has a relatively small amount of traffic, such as a scenic country lane, drivers do not impinge upon one another. There is little need for rules to restrict driving behavior, rules like low speed limits and no-passing zones. As growth adds more and more vehicles to the road, however, each driver becomes less free to drive as he or she pleases. As economic growth adds more complexity to daily life, governing authorities are forced to enact all sorts of rules to keep citizens from trampling nature and one another — hardly the way to maximize freedom.


Less of that…

Restrictions ad infinitum as
we pile on more and more
regulations to deal with
the limits of economic growth.

Image credit: Mtlp


Exemplary Governance

The Alaska Permanent Fund is an institution that distributes income to Alaskan citizens based on their common ownership of oil and gas resources. The state leases the right to drill oil to corporations, and the funds paid by the corporations are distributed to residents. In his book Capitalism 3.0, Peter Barnes proposes using this model to create an American Permanent Fund to manage commonly held natural resources. Operating such a fund would provide an economic institution that respects ecological limits (assuming it is well run to provide a steady stream of income and ecosystem services over the long haul), and it would provide more freedom to citizens in the form of higher income and greater access to intact natural areas.