Presuppositions of Policy
by Herman Daly
[Wouldn’t it be great to get advice directly from Herman Daly? It’s no surprise that his speech to graduating public policy students contains wisdom for all of us.]
As you graduate I want to remind you of something you already know. Since you have not only chosen to study public policy, but have persevered to graduate with a Master’s degree, you must already have rejected the perennial and pernicious philosophical doctrines of determinism and nihilism. That is what I want to remind you of.
Determinists believe that there is only one possible future, rigidly determined either by atoms in motion, selfish genes, dialectical materialism, toilet training, or the puppet strings of a predestining deity. If there is only one possible future state of the world then there are no options, nothing to choose from, and therefore no need for policy—or schools of public policy or Master’s degrees in public policy. You should head straight to the unemployment office! You are necessarily non-determinists who must believe that there are at least a few possible alternative future states of the world, and that purposive policy can be causative in choosing among them.
Of course there are also many merely conceivable or imaginary futures that really can be ruled out as impossible—such as, for example, growing the economy forever on a finite planet that is subject to the laws of thermodynamics and ecological interdependence. Our commitment to the fantasy of unlimited growth as the foundation of all national policy should top the list of things to be reconsidered. But that is a story for another time. My point for today is that after eliminating all impossible futures we are still left with more than one possible future.
To choose from the remaining menu of possible futures we need a criterion of value by which to distinguish better from worse states of the world. Nihilists, or extreme relativists, deny the existence of any such criterion. For them it is all a matter of subjective individual preferences, suitably weighted by ability to pay, as modified by gender, race, and class interests. The nihilists say that there is no such thing as the common good or objective value, and that therefore we cannot distinguish better from worse future states. So even though real alternatives may exist, policy still would make no sense without an objective criterion of value, and some vision of the common good.
Without choice there can be no responsibility, so the determinists and nihilists are often undeservedly comfortable in their irresponsible irrelevance. “Never knowing where they are going, they can never go astray.” As future policy makers I am sure that you will have to confront some complacent determinists and nihilists, perhaps disguised as political pollsters, apocalyptic televangelists, cost-benefit analysts, bio-ethicists, evolutionary neuropsychologists, or growth economists. One way or another they will insist that there is no alternative, and even if there were, it would not matter. That such people should bother to argue publicly about anything already involves them in a logical contradiction to which they are evidently blind. That makes rational dialog with them unpromising. But, as I said earlier, this is something you must already know or you would not be here. I am just reminding you of it on your way out, like your mother telling you not to forget your umbrella.
Herman Daly is CASSE Chief Economist, Professor Emeritus (University of Maryland), and past World Bank senior economist.
I was lead to your website from an article in the Yorkshire Evening Post (UK) and was somewhat surprised that your organisation believes that a sustainable economy is possible under the capitalist system . “I think steady state economics can work, it’s not incompatible with capitalism. The capitalism of today is nothing like the capitalism of the 1950s, for example. It’s constantly changing” Dan O’Neil is quoted as saying
No doubt you will offer up various models to justify such a position but capitalism has not changed in any of the fundamental way – it is the same society that can only survive by accumulation , accumulation accumulation as one Karl Marx discovered and to use another term of his , socialists seek to establish what Marx called “simple reproduction”
Perhaps you may be interested in the socialist model for a steady state society .
If i understand your general position it is to seek a society whose methods of providing for the needs of its members did not use up non-renewable resources quicker than renewable substitutes for them could be found; did not use up renewal resources quicker than nature could reproduce them; and did not release waste into nature quicker than the environment’s ability to absorb it. If these practices are abided by, then the relationship and interactions between human society and the rest of nature would be able to continue on a long-term basis – would be able to be “sustained” – without harming or degrading the natural environment on which humans depend.
Socialists contend that these practices could be systematically applied only within the context of the Earth’s natural and industrial resources being the common heritage of all humanity under democratic control. In other words, we place ourselves unambiguously in the camp of those who argue that capitalism and a sustainable relationship with the rest of nature are not compatible. The excessive consumption of both renewal and non-renewable resources and the release of waste that nature can’t absorb that currently go on are not just accidental but an inevitable result of capitalism’s very nature. Endless “growth” – and the growing consumption of nature- given materials this involves – is built in to capitalism. However, this is not the growth of useful things as such but rather the growth of money-values .If one’s answer to the question is that they are, indeed, mutually exclusive (that capitalism, in whichever manifestation, is in its very essence inherently unsustainable), then one’s only morally consistent response is to devote one’s political activities to the overthrow of capitalism.
But the picture of capitalism is still not complete. It is an ever-expanding economy of capital accumulation. In other words, most of the profits are capitalised, i.e. reinvested in production, so that production, the stock of means of production, and the amount of capital, all tend to increase over time (not in a smooth straight line, but only in fits and starts). The economic circuit is thus money-commodities-more money-more commodities, even more money . This is not the conscious choice of the owners of the means of production . It is something that is imposed on them as a condition for not losing their original investment. Competition with other capitalists forces them to reinvest as much of their profits as they can afford to in keeping their means and methods of production up to date. As a result there is continuous technological innovation. Defenders of capitalism see this as one of its merits and in the past it was insofar as this has led to the creation of the basis for a non-capitalist society in which the technologically-developed means of production can be now—and could have been any time in the last 100 years—consciously used to satisfy people’s wants and needs. Under capitalism this whole process of capital accumulation and technical innovation is a disorganised, impersonal process which causes all sorts of problems—particularly on a worldscale where it is leading to the destruction of the environment . As a system it must continually accumulate or go into crisis. Consequently, human needs and the needs of our natural environment take second place
The dream of a sustainable ‘zero growth’ within capitalism will always remain just that, a dream.If human society is to be able to organize its production in an ecologically acceptable way, then it must abolish the capitalist economic mechanism of capital accumulation and gear production instead to the direct satisfaction of needs.
In case there is any confusion on what socialism is it is a money-less society in which use values would be produced from other use values. Socialism is a decentralised or polycentric society that is self regulating , self adjusting and self correcting , from below and not from the top . It is not a command economy but a responsive one .Production and distribution in socialism would be a question of organising a coordinated and more or less a system of linkages between users and suppliers, enabling resources and materials to flow smoothly from one productive unit to another, and ultimately to the final user, in response to information flowing in the opposite direction originating from final users. The productive system would thus be set in motion from the consumer end, as individuals and communities took steps to satisfy their self-defined needs.
In response to Alan: What you are describing is only one version of socialism, the anarcho-socialist brand. Socialism has been critiqued as being productivist, just as much as capitalism (see the work of Moishe Postone for example).
And by the way, what you describe (a poly-centric self regulating, self adjusting and self correcting society) seems pretty close to the libertarian utopia where the free market is key to “organising a coordinated and more or less a system of linkages between users and suppliers, enabling resources and materials to flow smoothly from one productive unit to another, and ultimately to the final user, in response to information flowing in the opposite direction originating from final users”.
Interesting to see there is such common ground between hyper-capitalists and anti-capitalists!
This said, I agree that a steady-state economy is not a capitalist economy, but it might not be too strategic to phrase it as plain as this…
“Interesting to see there is such common ground between hyper-capitalists and anti-capitalists!”
Strange that you pick up on certain words and ignore others such as “a money-less society”. There is no similiarity between communism and libertarianism (the current American usage , not the more common European and more historical anarchist interpretation of the word)
I am not sure if you are aware of the existence of the Socialist Party of Great Britain but since 1904 our aim is to build a movement working towards socialism – a democratic society based upon co-operation and production for use, a world community without national borders. An end to buying and selling and money, where goods will be voluntarily produced and services voluntarily supplied to meet people’s needs. People will freely take the things they need. The SPGB is an organisation of equals with no leaders. So you can see straight away that we possess certain distinquishing features that separates us from those others who call themselves socialists. Some have described the SPGB as anarcho-marxists, the pro-parliamentary political party wing of anarchism ( if you can conceive of such an oxymoron).
The problem , it seems to me, for Casse, is that they want to retain the market system in which goods are distributed through sales at a profit and people’s access to goods depends upon their incomes. The market, however, can only function with a constant pressure to renew its capacity for sales; and if it fails to do this production breaks down, people are out of employment and suffer a reduced income.
It is a fundamental flaw in the Casse case and an insoluble contradiction in the argument that they want to retain the market system, which can only be sustained by continuous sales and continuous incomes, and at the same time they want a conservation society with reduced productive activity. These aims are totally incompatible with each other.
Also what Casse advocate in their version of a “steady-state” market economy, is that the surplus would be used not to reinvest in expanding production, nor in maintaining a privileged class in luxury but in improving public services while maintaining a sustainable balance with the natural environment. It’s the old reformist dream of a tamed capitalism, minus the controlled expansion of the means of production an earlier generation of reformists used to envisage.
Throughout its long history, the SPGB has been advocating for an eventual steady-state, zero-growth society as yourself but , of course, we differ with Casse in not accepting that there is a possibility for it within the confines of the capitalist economic system – nor might i add, before there is any confusion, in any system of state-owned nationalised and centrally-planned enterprises. Nor do we accept that such an objective can be gradually achieved step-by-step in a series of reforms.
The preservation of the environment is a social problem which requires Humanity to establish a viable and stable relationship with the rest of nature. In practice this implies a society which uses, as far as possible, renewable raw materials and energy and practise the recycling of non-renewable resources; a society which, once an appropriate balance with nature has been formed, will tend towards a stable level of production, indeed towards “zero growth”. This does not mean that changes are to be excluded on principle, but that any change will have to respect the environment by taking place at a pace to which nature can adapt. But the employment by capitalism of destructive methods of production has, over two centuries, upset the balance of nature.
It is not “Humanity” but the capitalist economic system itself which is responsible for ecological problems. It is only after having placed the means of society’s existence under the control of the community that we will be able to ensure their management, no longer in the selfish interest of the capitalist class , but in the general interest.
Most environmentalists accept the economic dictatorship of the owning minority since they don’t understand the link that exists between the destruction of the environment and the private/state ownership of the means of production.Because by definition capitalism can only function in the interest of the capitalists, no palliative can (nor ever will be able to) subordinate capitalist private property to the general interest.
We envisage and expect such a socialist world community , (or to use another archaic term , world commonwealth) will be a situation where human needs were in balance with the resources needed to satisfy them.
Such a society would already have decided, according to its own criteria and through its own decision-making processes, on the most appropriate way to allocate resources to meet the needs of its members. Planning is indeed central to the idea of socialism, but but is not Central Planning. This having been done, it would only need to go on repeating this continuously from production period to production period. Production would not be ever-increasing but would be stabilized at the level required to satisfy needs. All that would be produced would be products for consumption and the products needed to replace and repair the raw materials and instruments of production used up in producing these consumer goods. The point about such a situation is that there will no longer be any imperative need to develop productivity, nor will there be the blind pressure to do so that is exerted under capitalism through the market .
Since the needs of consumers are always needs for a specific product at a specific time in a specific locality, we can assume that socialist society would leave the initial assessment of likely needs to a delegate body under the control of the local community (although, other arrangements are possible ) In a stable society such as socialism, needs would change relatively slowly. Hence it is reasonable to surmise that an efficient system of stock control, recording what individuals actually chose to take under conditions of free access from local distribution centres over a given period, would enable the local distribution committee to estimate what the need for food, drink, clothes and household goods would be over a similar future period. Some needs would be able to be met locally: local transport, restaurants, builders, repairs and some food are examples as well as services such as street-lighting, libraries and refuse collection. The local distribution committee would then communicate needs that could not be met locally to the bodies charged with coordinating supplies to local communities.
The individual would have free access to the goods on the shelves of the local distribution centres; the local distribution centres free access to the goods they required to be always adequately stocked with what people needed; their suppliers free access to the goods they required from the factories which supplied them; industries and factories free access to the materials, equipment and energy they needed to produce their products; and so on. Production and distribution in socialism would thus be a question of organising a coordinated and more or less self-regulating system of linkages between users and suppliers, enabling resources and materials to flow smoothly from one productive unit to another, and ultimately to the final user, in response to information flowing in the opposite direction originating from final users. The productive system would thus be set in motion from the consumer end, as individuals and communities took steps to satisfy their self-defined needs. Socialist production is self-regulating production for use.
We can set out a possible way of achieving an eventual zero growth steady state society operating in a stable and ecologically benign way. This could be achieved in three main phases.
First, there would have to be urgent action to relieve the worst problems of food shortages, health care and housing which affect billions of people throughout the world.
Secondly, longer term action to construct means of production and infrastructures such as transport systems for the supply of permanent housing and durable consumption goods. These could be designed in line with conservation principles, which means they would be made to last for a long time, using materials that where possible could be re-cycled and would require minimum maintenance.
Thirdly, with these objectives achieved there could be an eventual fall in production, and society could move into a stable mode. This would achieve a rhythm of daily production in line with daily needs with no significant growth. On this basis, the world community could live in material well being whilst looking after the planet.
For socialism to be established, there are two fundamental preconditions that must be met. Firstly, the productive potential of society must have been developed to the point where, generally speaking, we can produce enough for all. This is not now a problem as we have long since reached this point.Secondly, the establishment of socialism presupposes the existence of a mass socialist movement and a profound change in social outlook.
Humans behave differently depending upon the conditions that they live in. Human behaviour reflects society. In a society such as capitalism, people’s needs are not met and people feel insecure. People tend to acquire and hoard goods because possession provides some security. People have a tendency to distrust others because the world is organized in such a dog-eat-dog manner. If people didn’t work society would obviously fall apart. To establish socialism the vast majority must consciously decide that they want socialism and that they are prepared to work in socialist society. If people want too much? In a socialist society “too much” can only mean “more than is sustainably produced.”
If people decide that they (individually and as a society) need to over-consume then socialism cannot possibly work.
Under capitalism, there is a very large industry devoted to creating needs. Capitalism requires consumption, whether it improves our lives or not, and drives us to consume up to, and past, our ability to pay for that consumption. In a system of capitalist competition, there is a built-in tendency to stimulate demand to a maximum extent. Firms, for example, need to persuade customers to buy their products or they go out of business. They would not otherwise spend the vast amounts they do spend on advertising.
There is also in capitalist society a tendency for individuals to seek to validate their sense of worth through the accumulation of possessions. As Marx contended, the prevailing ideas of society are those of its ruling class then we can understand why, when the wealth of that class so preoccupies the minds of its members, such a notion of status should be so deep-rooted. It is this which helps to underpin the myth of infinite demand. It does not matter how modest one’s real needs may be or how easily they may be met; capitalism’s “consumer culture” leads one to want more than one may materially need since what the individual desires is to enhance his or her status within this hierarchal culture of consumerism and this is dependent upon acquiring more than others have got. But since others desire the same thing, the economic inequality inherent in a system of competitive capitalism must inevitably generate a pervasive sense of relative deprivation. What this amounts to is a kind of institutionalised envy and that will be unsustainable as more peoples are drawn into alienated capitalism .
In socialism, status based upon the material wealth at one’s command, would be a meaningless concept. The notion of status based upon the conspicuous consumption of wealth would be devoid of meaning because individuals would stand in equal relation to the means of production and have free access to the resultant goods and services . Why take more than you need when you can freely take what you need? In socialism the only way in which individuals can command the esteem of others is through their contribution to society, and the stronger the movement for socialism grows the more will it subvert the prevailing capitalist ethos, in general, and its anachronistic notion of status, in particular.
By the replacement of exchange economy by common ownership basically what would happen is that wealth would cease to take the form of exchange value, so that all the expressions of this social relationship peculiar to an exchange economy, such as money and prices, would automatically disappear. In other words, goods would cease to have an economic value and would become simply physical objects which human beings could use to satisfy some want or other. The disappearance of economic value would mean the end of economic calculation in the sense of calculation in units of value whether measured by money or directly in some unit of labour-time. It would mean that there was no longer any common unit of calculation for making decisions regarding the production of goods.
Socialism is a money-less society in which use values would be produced from other use values, there would need no have a universal unit of account but could calculate exclusively in kind .The only calculations that would be necessary in socialism would be calculations in kind. On the one side would be recorded the resources (materials, energy, equipment, labour) used up in production and on the other side the amount of the good produced, together with any by-products. Calculation in kind entails the counting or measurement of physical quantities of different kinds of factors of production. There is no general unit of accounting involved in this process such as money or labour hours or energy units. In fact, every conceivable kind of economic system has to rely on calculation in kind, including capitalism. Without it, the physical organisation of production (e.g. maintaining inventories) would be literally impossible. But where capitalism relies on monetary accounting as well as calculation in kind, socialism relies solely on the latter. That is one reason why socialism holds a decisive productive advantage over capitalism by eliminating the need to tie up vast quantities of resources and labour implicated in a system of monetary/pricing accounting.The function of cost/pricing is to enable a business enterprise to calculate its costs, to fix its profit expectations within a structure of prices, to regulate income against expenditure and, ultimately, to regulate the exploitation of its workers. Unfortunately , prices can only reflect the wants of those who can afford to actually buy what economists call “effective demand” . – and not real demand for something from those without the wherewithal – the purchasing power – to buy the product (or even to express a preference for one product over another )
Socialism will seek an environmental friendly relationship with nature. In socialism we would not be bound to use the most labour efficient methods of production. We would be free to select our methods in accordance with a wide range of socially desirable criteria, in particular the vital need to protect the environment.What it means is that we should construct permanent, durable means of production which you don’t constantly innovate. We would use these to produce durable equipment and machinery and durable consumer goods designed to last for a long time, designed for minimum maintenance and made from materials which if necessary can be re-cycled. In this way we would get a minimum loss of materials; once they’ve been extracted and processed they can be used over and over again. It also means that once you’ve achieved satisfactory levels of consumer goods, you don’t insist on producing more and more. Total social production could even be reduced. This will be the opposite of to-day’s capitalist system’s cheap, shoddy, throw-away goods with its built-in obsolescence, which results in a massive loss and destruction of resources.
A moneyless society can calculate opportunity costs and allocate resources rationally by :-
1) Calculation in kind
2) A self-correcting system of stock control – which identifies quantities of stocks available and provides a reliable indication of consumer demand (via the depletion rates of stocks)
3) The law of the minimum – whereby you economise most on those factors of production that are relatively scarcest
4) A social hierarchy of production goals – which sorts out the allocation of scarce factors where competing demands are placed upon them.
Free access to goods and services denies to any group of individuals the political leverage with which to dominate others (a feature intrinsic to all private-property or class based systems through control and rationing of the means of life ) . This will work to ensure that a socialist society is run on the basis of democratic consensus. Decisions will be made at different levels of organisation: global, regional and local with the bulk of decision-making being made at the local level. Anything less than the demand for full free access socialism does not go far enough. In the final analysis, those who oppose it lack the confidence that either there are sufficient resources on the planet to provide for all , or that human beings can work voluntarily, and co-operate to organise production and distribution of wealth without chaos, and consume wealth responsibly without some form of rationing. In the end , these critics remain fixated to the lazy person, greedy individual critique of human behaviour.
To repeat once more , competitive pressures to minimise costs and maximise sales, profit-seeking and blind economic growth, with all their destructive effects on the rest of nature, are built-in to capitalism. These make capitalism inherently environmentally unfriendly and unsustainable . I find very few environmentalists who reject capitalism . Most Greens i have encountered are in favour of some form of capitalism, generally small-scale capitalism involving small firms serving local markets and if they desire to be seen as progressive they call for “co-operatives”. An underlying philosophy that “small is beautiful”and a philosophy that leads to mistakenly blaming large-scale industry and modern technology as such for causing pollution and not the capitalist system per se.
It is a highly misleading notion that society can live with a market economy that is ‘green’, ‘ecological’, or ‘moral’, under conditions of wage labour, exchange, competition and so forth.The framework within which humans can regulate their relationship with the rest of nature in an ecologically acceptable way has to be a society based on the common ownership and democratic control of productive resources, freed from the tyranny of the economic laws that operate wherever there is production for sale on a market.
I am sure you are acquainted with the writings of Porritt. suggests that governments could achieve a “a market-based model of sustainable capitalism” would be to force the competing enterprises to treat natural resources as if they were capital, subject to depreciation which had to be accounted for in monetary terms. He talks of “natural capital”, treating Nature as an economic category with a price-tag .
Porritt complains that “we show nothing but contempt for the contribution from nature, valuing it at zero as some kind of free gift or subsidy” and that, as a result, “today’s dominant paradigm of capitalism” leads to the plundering of non-renewable resources (such as oil and minerals) and the over-harvesting of renewable ones (such as fish and forests).
This is true but his proposed solution – to take into account the non-renewed consumption of natural material as a negative amount when calculating GDP, as an incentive to cut back on it as a way of avoiding a reduction in GDP leaves the real world unchanged.
In the real world, which GDP attempts to measure, the competing enterprises would still only take into account as a cost what they had to pay for. As it costs no labour to produce natural materials (only to extract or harvest them, not to create them), whether or not they are renewed doesn’t enter into the calculation. If enterprises were forced to artificially take into account using up non-renewed natural resources in their business accounts, that would distort the calculation of the rate of profit which is the key economic indicator for capitalism. There is no way round this under capitalism, which simply cannot be remodelled or reformed on this point.
Porritt does concede that he could be wrong about capitalism and environmental sustainability and how bad it would be “to be committed to a reform agenda if the system one sought to reform was inherently incapable of accommodating the necessary changes in the first place”. This is precisely the case I have been trying to present [quote from Porritt’s Capitalism As if the World Matters]
“Capitalism can no more be ‘persuaded’ to limit growth than a human being can be ‘persuaded’ to stop breathing. Attempts to ‘green’ capitalism, to make it ‘ecological’, are doomed by the very nature of the system as a system of endless growth. ” –Murray Bookchin, social ecologist
Marx was fond of quoting the 17th century writer Sir William Petty’s remark that labour is the father and nature the mother of wealth.
To the best of my abilities I have tried to identify the fundamental reasons why a sustainable zero-growth society is inherently not possible under capitalism and have argued for the creation and establishment of a different type of society which will permit a steady- state , ecologically sound world to flourish. Casse , i say is doomed to failure because of the nature of capitalism.
Apologies for this lengthy tract but your basic misunderstanding of the free access – or anarcho-socialist position rquire a more elaborate reply.
Further debate is always possible and i think it would be highly desirable and fruitful between Casse and the SPGB, perhaps in some sort of informal public forum, presenting our mutual alternative models of sustainable steady state societies.
By all means contact the SPGB at firstname.lastname@example.org to arrange such a discussion meeting and there are some very useful background reading at our website http://www.worldsocialism.org/spgb/