CASSE’s Top 15 Policies for Achieving a Steady State Economy

  1. Formally adopt the steady state economy as the overarching economic goal. In the USA, for example, this should be specified in legislation, namely a Full and Sustainable Employment Act (1).
  2. Maintain a network of conservation areas sufficient in size and diversity to ensure the long-term provision of vital ecosystem services. (6)
  3. Stabilize population, and aim for a long-term population size that enables a high standard of living for everyone without undermining ecological systems and the life-support services they provide. (4)
  4. Gradually reset existing fiscal, monetary, and trade policy levers from growth toward a steady state. For example, manage the money supply and redevelop the tax code with the new macroeconomic policy goal as a guide. (1,2)
  5. Limit the range of inequality in income and wealth, including both a minimum and maximum allowable income. Implement tax reforms to tax “bads” (e.g., pollution and depletion of natural resources) rather than goods (e.g., income from wages). (1,4)
  6. Employ cap-auction-trade systems in the commons sector for allocating basic resources. Set caps based on biophysical limits. Use auctions to distribute rights to extract resources. Equitably redistribute auction payments through public trusts. Implement a trading system for extraction rights to achieve efficient allocation of resources to those uses with the highest demand. (4)
  7. Establish a more flexible working day, week, and year to provide more opportunities for people to decide how to use their own time and to alleviate employment pressures. (4)
  8. Overhaul banking regulations, starting with gradual elimination of fractional reserve banking, such that the monetary system moves away from a debt structure that requires continuous economic growth. (3)
  9. Adjust zoning policies to limit sprawl and promote energy conservation.
  10. Continue to monitor GDP, but interpret it as a measure of the size of the economy and an indicator of environmental impact. Use other indices to measure economic welfare and social progress, such as the Genuine Progress Indicator. (1,3)
  11. Prevent unconstrained capital mobility so that financial resources are more directly tied to the real assets they represent. (4)
  12. Work toward full internalization of costs in prices (e.g., costs associated with environmental protection and fair labor laws), and adopt compensating tariffs to protect efficient national policies of cost internalization from standards-lowering competition from other countries. (4)
  13. Institute policies that move away from globalization and toward localization to conserve energy resources, provide high-quality local jobs, and maintain local decision-making authority. (3,4)
  14. Limit the scope of advertising to prevent unnecessary demand stimulation and wasteful consumption.
  15. Establish a Bureau of Population and Consumption to replace the Council of Economic Advisers and to report on sustainability criteria. (1)

 

Sources

1. Czech, B. 2013. Supply Shock: Economic Growth at the Crossroads and the Steady State Solution. New Society Publishers, Gabriola Island, British Columbia. 367pp.

2. Czech, B. 2000. Shoveling Fuel for a Runaway Train: Errant Economists, Shameful Spenders, and a Plan to Stop Them All. University of California Press, Berkeley, California. 206pp.

3. Daly, H., and J. Farley. 2003. Ecological Economics: Principles and Applications. Island Press, Washington, DC. 450pp.

4. Daly, H. 2008. A Steady-State Economy: A Failed Growth Economy and a Steady-State Economy Are Not the Same Thing; They Are the Very Different Alternatives We Face. UK Sustainable Development Commission, London, United Kingdom.

5. Daly, H. 1973. Toward a Steady-State Economy. W. H. Freeman, San Francisco, California. 332pp.

6. Dietz, R., and B. Czech. 2005. “Conservation Deficits for the Continental United States: an Ecosystem Gap Analysis.” Conservation Biology 19(5):1478-1487.