By Herman Daly
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.
There are physical limits to growth on a finite planet. In 1972, the Club of Rome issued their groundbreaking report—Limits to Growth (twelve million copies in thirty-seven languages). The authors predicted that by about 2030, our planet would feel a serious squeeze on natural resources, and they were right on target.
In 2009, the Stockholm Resilience Center introduced the concept of planetary boundaries to help the public envision the nature of the challenges posed by limits to growth and physical/biological boundaries.
… appealing to people to restrain themselves [by] self-enforced abstinence alone is a waste of time. By and large, we consume as much as our incomes allow…. changes… cannot take place without constraints that apply to everyone rather than everyone else. Manmade global warming cannot be restrained unless we persuade the government to force us to change the way we live.
—George Monbiot, Heat (2006/2009)
The results indicate that the likelihood of paying a positive amount for supporting renewable energy is higher under a mandatory scheme compared to a voluntary payment option in the UK.
To be economic, something has to be worth more than it costs. Economic activity, per se, is more beneficial than detrimental. Technically speaking, “marginal utility is greater than marginal disutility.”
If you liked a rug, but liked your grandkids more, it wouldn’t be smart to grab the rug out from under them. That’s basic microeconomics. Yet if we look around and reflect a bit,
Brian explains how GDP growth will eventually stop tracking with environmental damage–but the reasons may not be what you’d expect!
Daly explains how the conflation of growth and development, and a reliance on the Cobb-Douglass production function, can lead to the spurious conclusion that natural resources are unimportant factors of production.
Brian Czech discusses a theological basis for a steady state economy.
Our current economic policy goal is not fit for a finite and entropic world. But what would our economic policy goal be in a steady state economy?
Our economy faces a futility limit, ecological catastrophe limit, and an economic limit. Fortunately, the economic limit will likely be the first we encounter; hopefully we can implement a steady state economy before the others are reached!
Vermont moves to the forefront of a quiet revolution to integrate GPI into social and economic policy.