Posts


What is Wrong with a Zero Interest Rate?

by Herman Daly

The stock market took a dip, so the Fed will likely continue to keep the interest rate at zero, in conformity with its goal of supporting asset prices by quantitative easing. What is wrong with a zero interest rate? Doesn’t it boost investment, growth, and employment?

There are many things wrong with a zero interest rate. Remember that the interest rate is a price paid to savers by borrowing investors.


The Future History of Political Economy – Part 2

Thermodynamics in Economics: Revolutionary portent, future history

by Eric Zencey

Ecological Economics represents the extension into economics of the thermodynamic revolution of the nineteenth and twentieth centuries. In physics, that revolution dethroned Newton and brought relativity. In biology, it was midwife to the birth of ecology, the study of ecosystems as wholes in which energy networks—food webs—are a defining structure. In chemistry the laws of thermodynamics brought clarity and rigor to a science that struggled to bring theoretical unity to diverse phenomena.


The Future History of Political Economy – Part 1

Economics Ignores Thermodynamics

by Eric Zencey

Editor’s Note: An earlier version of this essay appeared as a comment in the Great Transition Network Forum, which will appear on the Great Transition Initiative website next week along with a new essay by Herman Daly, “Economics for a Full World.”

Ecological Economics and its corollary, Steady State Economic thinking, represent a step forward for the discipline of economics and also a return to how it was practiced in the past.


Paul Krugman on Limits to Growth: Beware the Bathwater

Brian Czech responds to Paul Krugman’s shockingly weak column, which argues against the limits to growth with the example of slow steaming.


A Question of Scarcity

On our full-world planet, we face an urgent challenge to find strategic points in decision-making processes to encourage “right-sized” consumption.


Growth and Free Trade: Brain-Dead Dogmas Still Kicking Hard

Of course, it’s better to be rich than poor, but the conventional approaches for making us rich — GDP growth and free trade — no longer apply.


Neoclassical Economist Recants Key Article of Faith

Eric Zencey explains why GDP is an indicator for amnesiacs.