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Voluntary Simplicity and the Steady-State Economy

by Mark Burch

Voluntary simplicity is most basically characterized by the practices of mindfulness and material sufficiency. Through bringing mindfulness to our daily lives, we seek the maximum of well-being achievable through the minimum of material consumption. Well-being applies to all life forms on Earth, not just people.

The practice of sufficiency implies conscious moderation of material consumption to some admittedly flexible limit discerned by weighing both physical needs and ethical principles. Voluntary simplicity is about enough, for everyone (including other species), forever. The practice of sufficiency replaces the pursuit of affluence in consumer culture.

There are a number of synergies between voluntary simplicity and the social arrangements conducive to a steady-state economy. There are also some differences and divergences.

First, voluntary simplicity traditionally takes an individual household or “microeconomic” perspective of the good life. Most of the literature about simple living is addressed to individuals and how they can exercise choice within the scope of their personal lifestyles and families to improve quality of life through reducing material consumption. Steady-state economics is a set of macroeconomic policy recommendations. There is a discontinuity of scale between these two ways of looking at life, though certainly not a discontinuity of the values that inform both perspectives.

Both steady-state economists and practitioners of voluntary simplicity care deeply about ecological limits and social justice. Both see conserving ecosystems and reducing inequity as intimately tied up with decisions about consumption. The steady-state goal of limiting the scale of the economy relative to the ecosphere would probably be endorsed by many practitioners of simple living.

Second, there is little reference in the simplicity literature to population issues. But I would suggest that among most practitioners of voluntary simplicity, limiting population as a necessary condition for a good life is a concept so taken for granted that it scarcely gets mentioned. From its earliest formulations, steady-state economics has urged limits on human population as a prerequisite for attaining a steady state within Earth’s carrying capacity (Daly 1995). Just how this might be achieved is a continuing topic of discussion with fertility licensing being only one option.

simplifyThird, mindfulness practice helps us distinguish material from nonmaterial needs. As we become more skilled at securing appropriate satisfiers for each, we discover that material needs are small and relatively stable over time, thus calling for a small, steady-state economy to provide for them. Consumer culture’s emphasis on production for affluence derives from its tendency to conflate nonmaterial needs (which are limitless) with material consumption (which is constrained by planetary limits). The insights offered by voluntary simplicity about what makes for a good life, what role material things play in it, and how to cultivate mindfulness about our consumption choices offer a powerful complement to macroeconomic policies in promoting overall sustainability.

Fourth, the history and present-day practice of voluntary simplicity illustrate that a high quality of life depends jointly on sufficient material provision and abundance of nonmaterial experiences that contribute to well-being. Fortunately, sufficient material provision is easy to achieve within ecological limits if our economy and marketing methods do not systematically and artificially inflame desire for material goods as proxies for meeting nonmaterial needs. Once material needs have been met, the extra ecological footprint incurred for meeting nonmaterial needs is remarkably small. Practitioners of voluntary simplicity, therefore, provide living examples of the good life that is possible in a steady-state economy.

Fifth, living within the means of what the planet can provide, as urged by steady-state economics, requires a move away from economic globalization and toward localization. Voluntary simplicity recognizes self-reliance as a key element of a good life. Cooperating with our neighbors to provide local goods and services achieves community economic development. Such cooperation builds economic assets with tools such as local currencies, barter systems, cooperative enterprises, and all manner of production using local labor and resources. These practices also build “social capital” — the dense network of relationships which include, but also transcend, economic exchange relationships. Psychological research has repeatedly shown that the quality of our relationships is the most important contributor to well-being, followed closely by the quality of our work experience, access to leisure, and physical health. Beyond modest sufficiency, monetary riches occupy a distant fourth or fifth place on the list of what makes for a good life. Promoting personal and community self-reliance seems highly synergistic with the requirements of a steady-state economy.

Perhaps the greatest difference between the voluntary simplicity movement and steady-state economics is the analysis of desire (or lack thereof). For simple living, this analysis is fundamental to a good life. The origins of desire seem to be mostly lacking from economic theory and analysis. Mainstream economics rests on an 18th-century theory of human psychology and motivation that finds no empirical support from modern psychological research (see the critique of the “standard economic model” offered in Schor 2009). Moreover, macroeconomic policies amount to the imposition of measures by elite economic agents upon the rank and file of humanity who are often kept in the dark about social and environmental problems and are intentionally kept out of decisions for fixing these problems. While expedient in some circumstances, such an approach squares poorly with the values of simple living. Something more is required.

The discipline of economics claims that people can be forced to modify the expression of their desires through their consumption behavior. The forcing device is the pricing mechanism, which is driven by those who want to exploit desire to generate profit. But in reality, changing behavior requires much more than getting the prices right. It requires both inquiry into the nature of desire itself and further insight or self-awareness on the part of consumers.

Certainly people can be coerced to behave in certain ways by creating price incentives for desired behavior. But another approach is possible that grows from enlightened self-awareness — not just “rational” self-interest. Human behavior changes when our consciousness of ourselves and our relationships change. Since consciousness is at least partly socially constructed, it is through our relationships with others that transformations of consciousness can occur. Therefore, changing the focal length of consciousness through mindfulness practice and conscientization experiences represents an alternate evolutionary pathway toward a better life. We need not be limited to just tinkering with price systems or imposing “limits” by elite fiat.

I should hasten to add that my view is not universal among voluntary simplicity practitioners. But there is noteworthy consistency over centuries and across cultures that the choice to adopt a simpler life is usually preceded by a fundamental change in outlook (Wagner 1903, 17). Sometimes this is caused by trauma or loss (Spina 1998), sometimes by deliberate spiritual practice (Kasser and Brown 2005), and sometimes it happens as a series of spontaneous insights that lead us to question our previous understanding of what constitutes the good life and seek alternatives (Elgin 2010; Pierce 2000).

I see many synergies between a steady-state economy and the sorts of policies and social structures that support simple living. Broad acceptance of a steady-state economy would almost necessarily include the practice of simple living, especially if the transition is to be democratic and involve the majority of citizens. Conversely, voluntary simplicity has much to offer in achieving a steady-state economy through its analysis of human desire and its emphasis on the power of mindfulness to transform consciousness. Voluntary simplicity can help us evolve toward wanting what we must in any case do.

References

Daly, Herman (1995). The steady-state economy: Alternative to growthmania. In: Steady State Economics, (2nd Edition). Washington, DC: Island Press, pp. 180-194.

Elgin, Duane. (2010). Voluntary simplicity: Toward a way of life that is outwardly simple, inwardly rich. 2nd ed. New York, NY: HarperCollins, Publishers. Elgin discusses collective action through the creative use of social media.

Kasser, Tim and Brown, Kirk Warren (2009). A scientific approach to voluntary simplicity. In: Cecile Andrews and Wanda Urbanska (2009) Less Is More: Embracing simplicity for a healthy planet, a caring economy and lasting happiness. Gabriola Island: New Society Publishers, pp. 35-40.

Pierce, Linda Breen (2000). Choosing simplicity: Real people finding peace and fulfillment in a complex world. Carmel, CA: Gallagher Press.

Schor, Juliet. (2009). “The new politics of consumption.” In: Voluntary simplicity: The poetic alternative to consumer culture. Samuel Alexander. ed., 253-269. Wanganui, NZ: Stead and Daughters Ltd. Schor provides yet another take on what might motivate the formation of a politics of simple living and some key principles that might guide it.

Spina, Anthony C. (1998). “Research shows new aspects of voluntary simplicity.” The Simple Living Network On-Line Newsletter, January-March, 1999.

Wagner, Charles (1903). The simple life. New York, NY: McClure, Philips & Co.

Mark Burch is a fellow of the Simplicity Institute and also the author of Stepping Lightly: Simplicity for People and the Planet.

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Too Many Jobs

by Max Kummerow

Without doubt unemployment blights people’s lives. Those who want to work need jobs. But an even more fundamental economic problem is too many people beavering away, wrecking our home planet. Politicians and economists assume population growth means more people need jobs, so the economy must grow. Better to reverse that logic, starting instead by calculating the level of output the world’s environmental resources can sustainably support. How can jobs and economic output keep growing on a damaged planet with shrinking resources?

Some economists claim that technology or human ingenuity is the ultimate resource, but such platitudes ignore the realities of technological advance. The truth is that technology both creates and destroys jobs. Labor-saving innovations often increase productivity by reducing employment. And the downsides of technology abound. Fanatics use the “ultimate resource” to build bombs. Nuclear physics gave us an energy source and medical advances, but also atomic bombs and toxic pollution. The Green Revolution that helped double or triple world grain yields relies on fertilizer made from natural gas that will eventually run out. Meanwhile, populations needing food have tripled since the inception of the Green Revolution. Growth enabled by technology puts humanity further out on a limb, increasing ecological and economic risks.

If we are so smart and technology can solve every problem, why hasn’t every problem been solved? Historians list dozens of collapsed societies. Why didn’t brainpower save past empires? Why are carbon dioxide emissions still increasing? Why, after the global financial crisis affected so many people and communities, did banks go back to speculating in derivatives? Why are a billion people stunted by malnutrition? Why are so many species going extinct? Why do war and arms races persist? And so on across a range of unsolved local and global problems.

A sign of too many jobs: this eyesore (a modular worker colony) sprouted at the Bakken shale oil deposits near Williston, North Dakota.  Photo by Ben Garvin, Reuters.

A sign of too many jobs: this eyesore (a modular worker colony) sprouted at the Bakken shale oil deposits near Williston, North Dakota. Photo by Ben Garvin, Reuters.

Perhaps the greatest irony is that even though we are counting on technology to save us, the U.S. is cutting research funding. At the same time, the cost of attending college is becoming unaffordable. In 1992 dozens of Nobel Prize-winning scientists signed a “warning to humanity” saying we should stop changing the earth so rapidly. When the world ignores scientists like Jim Hansen (NASA pioneer climate modeler), isn’t public indifference squandering the “ultimate resource?” What a contradiction: relying on science to save us and then ignoring the recommendations of our leading scientific experts.

The ecological footprint reveals that the world economy is already too big. Ecologists calculate that sustaining current levels of output would require 1.5 earths. If everyone lived like Americans, more than four planets like earth would be required. Scientists have identified nine key areas where the scale of human economies could damage earth’s ability to support us for the long run. Three of the nine “planetary limits” have already been exceeded, reducing the planet’s capacity to support human life. Current levels of economic output require drawing down planetary “savings accounts” (soils, fossil fuels, species diversity, etc.) that are rapidly being overspent and depleted.

We’re caught in a dilemma. We have too many jobs — too many people are consuming too many resources as they go about their jobs — and yet huge numbers of jobless people struggle to meet their basic needs. At the same time, policies are geared toward growing the economy with the hope of adding more jobs, while disregarding the problem of overconsumption. What can we do?

Several commonsense jobs policies could help us achieve full employment within planetary limits. In the short term we could share employment more fairly. The U.S. could achieve full employment by increasing vacation time — we get two weeks where Europeans get five weeks. We could cut back to a four-day work week, lower retirement age (say to 60), offer more part-time work or job sharing, and send more people back to school to upgrade skills. Incomes would be reduced and social security taxes would increase due to these measures, but we would enjoy more fairness in distribution of income; less crime; more leisure time; more time for family, friends and community; and improved quality of life. We might even live longer — people in half a dozen well-off European countries live two years longer than Americans.

In the long run, we must stabilize or decrease population. Society should subsidize the first child and allow a second child without penalty, but require parents who choose to have more than two children to pay the full costs of educating and providing medical care and old age support for those extra children. People who expand population take more than their fair share of everything while imposing costs on the rest of us by collectively pushing up prices for housing, land, food and energy. Crowding makes life more stressful in many ways — traffic congestion, longer lines, more competition for jobs and college admissions, higher unemployment, lower wages and higher taxes. Extra kids contribute to climate change, pollution and resource depletion. Requiring those with large families to bear the costs their extra children impose on others would incentivize responsible family planning decisions. Far from being repressive, having smaller families corrects market failure, liberates women and makes families and children better off. The world’s best educated women voluntarily choose small families as shown by the below-replacement fertility rates in some of the best educated countries.

Reversing direction to optimize the total number of jobs, rather than pursue unlimited job growth, won’t be easy. Economists must accept a major paradigm shift. Such a shift has been described in the literature for over 200 years starting with Malthus, Ricardo and John Stuart Mill. Classical economics theory included limits to growth — a “stationary state.” Sharing jobs and stabilizing population won’t solve all economic and ecological problems. Many other reforms need to be included on the agenda to achieve a steady state economy that features environmental protection and sustainable levels of consumption — reforms like a carbon tax, conservation of species diversity, and redistribution of wealth.

For such laws to be passed in democracies, the public would have to be far better informed to understand why these changes make sense. Pro-growth messages come at us incessantly from mass media, the Internet, and pro-growth lobbyists, politicians and businesses. A keystone reform will be to overhaul the way we fund our information-providing institutions. We currently use information from these institutions to make important decisions. The trouble is that much of the information is actually misinformation, because the institutions obtain their revenues from advertising that pushes the infinite-growth agenda.

Abandoning the ideology of growth so firmly embedded in economic theory, popular culture and the media will be difficult. But economic theory reform, media reform, job sharing and changing human fertility behavior will be far easier than changing the inescapable laws of physics, expanding the land area of the earth, or doing business in cities inundated by rising sea levels. Difficult is still a lot easier than impossible.

Open Borders and the Tragedy of Open Access Commons

by Herman Daly

Herman Daly“Open borders” refers to a policy of unlimited or free immigration. I argue here that it is a bad policy. If you are poor and your country provides no social safety net, you move to one that does. If you are rich and your country makes you pay your taxes, you move (or at least move your money) to one that doesn’t. Thus safety nets, and public goods in general, disappear as they become both overloaded and underfunded. That is the “world without borders,” and without community. That is the tragedy of open access commons.

Some will think that I am attacking a straw man, because, they will say, no sensible person really advocates open borders. They simply advocate, it will be said, “more generous levels of immigration, and a reasonable amnesty for existing illegal immigrants.” I agree that some form of strictly conditional amnesty is indeed necessary as the lesser evil, given the impasse created by past non-enforcement of our immigration laws. Deporting 12 million long-settled residents is too drastic and would create more injustices than it would rectify. But unless we enforce immigration laws in the future there will soon be need for another amnesty (the first, often forgotten, was in 1986), and then another — a de facto open-borders policy. Nevertheless, the policy of open borders should be fairly discussed, not only because some people explicitly advocate it, but also because many others implicitly accept it by virtue of their unwillingness to face the alternative.

Immigration is a divisive issue. A good unifying point to begin a discussion is to recognize that every country in the world has a policy of limiting immigration. Emigration is often considered a human right, but immigration requires the permission of the receiving country. Some countries allow many legal immigrants. Others allow few. As the World Bank reported in its Global Bilateral Migration Database:

The United States remains the most important migrant destination in the world, home to one fifth of the world’s migrants and the top destination for migrants from no less than sixty sending countries. Migration to Western Europe remains largely from elsewhere in Europe.

There are also arguments about the emigration side of open borders — even if emigration is a human right, is it unconditional? Might “brain-drain” emigrants have some obligation to contribute something to the community that educated and invested in them, before they emigrate to greener pastures?

Immigrants are people, and deserve to be well treated; immigration is a policy, and deserves reasoned discussion in the public interest. It seems that neither expectation is fulfilled, perhaps partly because the world has moved from largely empty to quite full in only one lifetime. What could work in the world of two billion people into which I was born, no longer works in today’s world of seven billion. In addition to people, the exploding populations of cars, buildings, livestock, ships, refrigerators, cell phones, and even corn stalks and soybean plants, contribute to a world full of “dissipative structures” that, like human bodies, require not only space but also a metabolic flow of natural resources beginning with depletion and ending with pollution. This growing entropic throughput already exceeds ecological capacities of regeneration and absorption, degrading the life-support capacity of the ecosphere.

The US is indeed a “country of immigrants,” although for American Indians this frequent refrain reflects a less positive historical experience than it does for European settlers. Nor does the term resonate positively with those African Americans whose recent ancestors were brought here as involuntary immigrants. Many Americans, including me, think that heirs of slavery deserve priority in the US job market (including job training) over new immigrants, especially illegal immigrants. Likewise for the many Americans of all races living in poverty. Some other Americans, unfortunately, seem to feel that if we can’t have slaves, then the next best thing is abundant cheap labor, guaranteed by unemployment.

We have in the US a strong cheap-labor lobby that uses immigration (especially illegal immigration) to force down wages and break labor unions, as well as weaken labor safety standards. This is less the fault of the immigrants than of our own elite employing class and pandering politicians. The immigration issue in the US is largely an internal class battle between labor and capital, with immigrants as pawns in the conflict. Class division is more basic than the racial and ethnic divide in current US immigration politics, although the latter is not absent. Progressives in the US, with their admirable historical focus on racial justice, have been slow to see the increasing dominance of the class issue in immigration. The Wall Street Journal, the Chamber of Commerce, and big corporations in general, do not mind seeing the class question submerged by racial and ethnic politics favoring easy immigration as a cheap-labor supplement to off-shoring. It feeds the myth that we are a classless society, even as it contributes to increasing income inequality. Also, given the closeness of recent elections, a bit of ethnic pandering can be politically decisive.

The US is also a country of law, or at least strives to be. Illegal immigration falls outside the rule of law, and renders moot all democratic policy deliberations about balancing interests for the common good. It is hardly democratic to refuse to enforce democratically enacted laws, even though difficult individual cases arise, as with any law. Humane provisions for difficult cases must be worked out, e.g., children brought here illegally by their parents twenty years ago. We have judges to deal with difficult cases, as well as statutes of limitation regarding the time period within which certain laws must be enforced, and this principle could be applied to immigration laws.

Which democratically enacted laws will the open-borders lobby not enforce next? How about laws against financial fraud? We have apparently already quit enforcing those, partly abetted by globalization and foreign tax havens as well as too big to fail or jail banks. Acceptance of illegal immigration is only one part of the broader trend toward impunity, and while impunity for banksters is arguably worse than for illegal immigrants and their employers, the latter still plays a part in undermining the general respect for law.

Map of Bhutan

What would an “open borders” policy mean for Bhutan, sandwiched between the world’s two most populous nations?

Surely our immigration laws could be improved. Indeed, the 1995 US Commission on Immigration Reform, chaired by the late Texas Congresswoman Barbara Jordan, made a good start, but was ignored for reasons already suggested. Her commission called for lower legal immigration quotas, stricter family reunification criteria, and enhanced border control, as well as stricter sanctions against employers of illegal immigrants. The last embraced the caveat that ethnic profiling would likely result without a secure national identification system, since employers are not able to adjudicate false documents. A secure identification system would of course make it easier to identify illegal immigrants and is often opposed by open-borders advocates and libertarians. The present Congress should build on the good work of the Jordan Commission, but they seem to have forgotten it.

Would open borders be good for Japan, or Germany, or Greece, or for an independent Catalonia, if that should come about? Do any political parties in member countries advocate open borders for the European Union with respect to the rest of the world? Should the areas of the Amazon reserved for indigenous people be open to free immigration? Should Bhutan, bordered by the world’s two most populous countries and trying to preserve its culture and ecosystems, declare a policy of open borders?

In developed countries immigration boosters are especially interested in opening borders to young workers to help cover social security shortfalls resulting from the older age structure caused by slower natural population growth. The cheap-labor lobby is joined by the cheap-retirement lobby. Apparently the immigrants are expected to die or go home as soon as they reach retirement age and would start receiving rather than paying into social security. Also, while working they are expected to boost fertility and population growth sufficiently to postpone the necessity of raising the retirement age or lowering benefits. Population growth is expected, indeed required, to continue indefinitely.

In addition to the cheap-labor and cheap-retirement lobbies, advocacy of open borders comes both from the politically correct faction of left-wing economists, and from the libertarian faction of right-wing economists. The former consider any limits on total number of immigrants as “thinly disguised racism.” All evil is reduced to racism, often “in disguise.” The libertarian economists label any restriction on immigration as a “market distortion,” their synonym for regulation. We already have open borders for capital (as well as goods), so that open borders for labor would complete the global integration agenda — deregulation taken to the limit. This is not “free trade” or reasonable recognition of interdependence among many separate trading economies, as embodied in the 1945 Bretton Woods Treaty. Rather it is a single global economy tightly integrated on the principle of absolute, not comparative, advantage. It is being imposed top-down by transnational corporations via the undemocratic World Trade Organization.

Net immigration is the overwhelming cause of US population growth. How big should the US population be? We are currently the third most populous country in the world. Do we aspire to overtake China and India? What numbers define a “more generous immigration policy,” and exactly who is being generous to whom, and at whose expense? Our elite is being generous to itself at the expense of both the US working class and of immigrants.

Any limitation of the number of new immigrants still requires selectivity and enforcement of immigration laws. It requires saying “no” to many worthy applicants, which is difficult, and is why some humanitarians are tempted to favor open borders. It is easier to pretend that unlimited “economic” growth can support an unlimited population, including immigrants. Never mind that growth in the US has, at the margin, become uneconomic, increasing social and environmental costs faster than benefits. The idea of a steady-state economy goes out the window, and customary growth-mania is reaffirmed.

If the US could just set an example of how a country can live justly and sustainably within its ecological limits (i.e., in a steady-state economy), that would be a splendid contribution to the rest of the world. We are far from setting such an example — indeed we are not even trying.

Maybe It’s Time to Offend a Few Folks

by Alexandra Paul

Paul_AlexandraSpeaking out about human overpopulation is not an easy thing, as I have been told that people get offended. I have not personally experienced offending anyone, but perhaps those folks have been too polite to tell me. I have not read any studies that prove people are offended, but perhaps I have missed them. If I offend you in this video, please let me know.

I once asked the executive director of the Rainforest Action Network why RAN didn’t discuss the huge number of people on the planet as a factor in rainforest devastation and encourage smaller human families, as everyone in that nonprofit organization probably understands that the demand for resources from 7 billion people on the planet is causing extensive damage to the earth. They know that if the UN projection of 10 billion people on the planet by 2050 is right, it will be disastrous for forests everywhere. She admitted, abashedly, that she did not want to alienate donors.

RAN is an organization whose members break into corporate offices and hang banners out the windows excoriating Big Oil, yet they are afraid to talk about human overpopulation in their pamphlets or on their website. If RAN won’t admit the link between diminishing natural resources and a population that grows by 220,000 people every day, then what large environmental organization will?

It turns out, none.

Is it really impolite to promote smaller families?

Is it really impolite to promote smaller families?

Even within the population community, there is disagreement on how to approach the topic of lowering fertility. Some activists believe that the word “overpopulation” is too strong, even though by all accounts the world IS overpopulated: An article in the journal Nature reports that the global groundwater footprint is about 3.5 times the actual amount we have in our aquifers. Scientists have estimated that humans consume 50% more of the earth’s resources than she is able to restore each year. If people continue to consume the planet’s resources at this rate, by 2030 humanity will need two planets worth of resources to support the world’s population.

My message is clear: I recommend one child per couple to lower the population, avert future famines, and avoid wars over water. If that sounds radical, then maybe it is time for radicalism. In a culture that bemoans a falling fertility rate because it will damage the economy — instead of praising smaller families because it means less crowding, more nature and better quality of life for all — there is great need for more voices of sanity. Voices like Edward Abbey who said, “Growth for the sake of growth is the ideology of the cancer cell.”

For those of us in the United States, this message is especially important. Although our families average 2 kids per couple, our consumption outweighs that of larger families in Africa and Asia. The average American consumes 20 times more resources than someone from Mozambique and generates 169 times more carbon dioxide than a Bangladeshi. We have even outdone ourselves: a family of four today lives in a house twice as large as one the family would have occupied in 1950.

I believe that we must stabilize and then lower the world population if humans are to survive on this planet. If advocating a culture that encourages smaller families is offensive, then I must offend. Too much is at stake to be polite.

Alexandra Paul is an internationally recognized actress and an environmental and social activist.  To hear Alexandra speak about overpopulation, please see her TEDx video.

The Visible Hand: Manipulating Market Prices by Influencing Laws and Regulations

by Max Kummerow

Recently a member of a mailing list for resource economists asked how to value endangered species given that they are not bought and sold in markets. A common method is to infer prices (“existence values”) by indirect methods such as answers to surveys (e.g., “How much would you be willing to pay to keep tigers from going extinct?”). An issue raised in the online discussion was whether species grow more valuable as they become more scarce and their numbers fall toward zero. If prices keep changing, what is the “right” price?

Thought experiment: suppose a keystone species is about to go extinct, but few people know about the threat. Oh, heck, let’s be more realistic. Leading ecological authorities believe that the effects of climate change will drive 1/3 or more of the world’s species to extinction by 2100 with unpredictable system-wide effects. Meanwhile, the owners of $17 trillion of fossil-fuel reserves are spending hundreds of millions of dollars to convince the public that the threats from climate change are overstated or non-existent (See Bill McKibben’s Rolling Stone article or Oreskes and Conway’s Merchants of Doubt).

How can we have any idea about fundamental values (that is, “correct” utility-maximizing efficient market prices) with so much misinformation floating around? Advertising creates a set of consumption preferences tilted towards items sold by companies more concerned about profits than benefits to society.

Prices depend on preferences, and preferences depend on information. Knowledge of the unhealthy and even fatal effects of smoking changed preferences about and prices of tobacco. Such changes would also occur over time as people gain knowledge about the threats of extinction and climate change.

By similar means, misinformation and strategic uncertainty lead to mispricing. If such mispricing in the carbon market continues, the predicted result is a “tragedy of the commons” (collective irrationality, market failure) with features like Miami, Washington, DC, and Los Angeles ending up below sea level, mass species extinctions, crop failures, etc.

Economic systems are complex, and many external costs and benefits are not factored into prices or people’s decisions in the market. Time lags add to the complexity. What if it will take 2,000 years before climate change makes the planet too hot for human life? Such a time lag makes it harder to come to the best decision about whether to build a new coal-fired power plant.

Species extinctions may be portents of broader problems (e.g., climate change), akin to canaries in a coal mine. The same factors driving them extinct — various impacts of growing human populations and economies — may be driving us extinct in the longer run. Does it make sense to value threatened species without considering the linkage to these other related problems? An endangered species itself might be worth $1, yet the factors driving it toward extinction might cause $100,000 worth of damage over the long run, or maybe even infinite damage from our point of view if extinction extends to humans. We need a better benefit-cost picture — a larger, genuine, and more complete accounting.

Another major problem with prices is that they only reflect the preference of those who hold power in markets. Perhaps polar bears should have standing when it comes to determining prices. They are intelligent, sentient beings with the most at stake when ice melts, so maybe their preferences ought to be factored into decisions about the Keystone Pipeline and exploitation of tar sands oil. What about future generations? Nobel Prize winner Joseph Stiglitz called this problem “incomplete markets” leading to market failure and universal mispricing.

There are some things markets do very well, but only if the institutional framework (rules of the game) ensures that prices reflect all costs and benefits. Laws, lobbying, culture, taxes, regulations — all kinds of institutions collectively created by societies — have enormous influences on market prices or even the existence of markets. So, to some degree, through these institutions, we choose price levels through a “visible hand” of policies and institutions. Stiglitz points out that the deregulation policies that led to the Global Financial Crisis of 2008 did not come out of nowhere, but rather from intense lobbying by stakeholders at banks and other people whose profits were restricted by regulations — a situation in which prices were set by something like a visible-policy hand instead of the invisible hand of the market.

Because of the difficulty of getting prices right, we might do better to regard creation as sacred and take the conservative position of Aldo Leopold who said, “The first rule of intelligent tinkering is to save all the parts.”

Valuations always depend on preferences. Economists call prices “revealed preferences.” If we “prefer” to settle for a world without many wonderful creatures, then we won’t attach much worth to them. But if we value them for their intrinsic beauty and their relationship to us (we do share DNA with every living thing), then we’ll attach more worth to them. So rather than measuring values, perhaps we should be trying to create value by improving preferences.

Examples of worldwide mispricing and market failures that need institutional corrections include:

  • Energy — too cheap due to climate change, extinctions, and negative effects on future generations.
  • Having children — too cheap since growing population will raise real prices of land, food, and energy, and contribute to climate change and other global environmental problems.
  • Endangered species — too cheap because ecosystem interrelationships are poorly understood, and indirect effects could be enormous.
  • Economic growth — overvalued because growth negatively affects aggregate utility and public goods (“the commons” such as air, water, soil, species diversity, ecosystem health, and climate) once we begin to reach the limits to growth.

Most economics students are still taught that following market price signals leads to the best of all possible worlds (market efficiency and maximum aggregate utility). But the examples of under- and over-valuation contained in the short list above suggest that humanity is headed for trouble if we choose to let market prices and self-interested institutions’ manipulation of prices control outcomes. The markets we rely on fail to generate utility-maximizing prices for goods and services and for the future of humanity. Thinking of ourselves as an endangered species, what is it worth to keep us alive?

Max Kummerow has a Ph.D. in urban and real-estate economics.  He is currently studying population issues in Perth, Australia.

Economics as “Unusual” in Australian Politics

by Robert Lawrence

An important event has been hardly noticed in Australian politics. But it could be the start of a trend to recognize and address causes of social and environmental problems rather than merely to struggle with the symptoms. Until recently economic growth, as measured by gross domestic product (GDP), has been the primary indicator of governmental performance, with alternatives virtually absent from the political discourse. At last one brave member of Parliament is changing that, unafraid to lead the way toward a steady state economy.

To understand the significance of this event, we need to get some perspective on the Australian political situation. There are two rival sides that differ mainly in rhetoric and in their strategies for winning support from voters. More than 90% of elected politicians belong to these two sides.

There are two houses of Parliament. One is the House of Representatives, which does the main business of government. The other is the Senate, which reviews the decisions of the House of Representatives. A group of Senators is elected to represent each of the six Australian states.

Voting is compulsory in Australia for citizens over 18 years of age. There is a preferential voting system in which every candidate must be ranked for a vote to be counted at all. Effectively this has meant that Australians ultimately had to choose between two political parties. In voting for the House of Representatives, votes for independent candidates and minor parties have rarely made an impact. The electoral system is built around the two parties. There is a review of electoral boundaries every seven years. Boundaries of electorates are redrawn so that there is a more even competition between the two major parties. The parties distribute leaflets on how to vote for their candidate, and these suggest an order of preferences for the other candidates.

The situation is different for the Senate, in which each of the six Australian states has its own set of candidates. This setup has given the minor parties and independent senators an opportunity to wrest some power away from the two main parties. This happened during the last national election when the Australian Greens and a small number of independents were able to cast deciding votes. This meant that citizens who voted for a minor party actually had a voice at last. A tax on carbon emissions commenced on July first as a consequence.

Australia has a free press. A common approach in the media has been to strive for a “balanced” view, which has generally been achieved by presenting extreme viewpoints on any given issue to contribute a public “debate.” The effect of this is to polarize the public, rather than to seek well-reasoned, informed decisions.

Another major factor in the political landscape is the opinion poll. Although polls can help politicians be more responsive to the electorate, they can produce undesirable consequences. Politicians become concerned about managing perceptions rather than governing from the best advice of their departments. Another consequence is that both the major political parties tend to become almost indistinguishable. One gives lip service to workers’ rights and the environment, while the other to business. In practice it is impossible to tell which is better in any aspect. Both major parties express disdain for each other and struggle to find ways to differentiate themselves for voters. Often “debate” deteriorates into personal attacks.

But one issue on which both major parties agree, as is the case throughout the western world, is the imperative of economic growth. Rising GDP is the unquestioned prime measure of success.

Conservationists have been dealing with the consequences of the growth-is-good dogma. They have taken the approach of running campaigns on specific, strategic issues that tend to address the symptoms of too much economic growth. One could argue that they have been afraid of being further marginalized as a lunatic fringe with no grasp of reality. At least population growth has recently made it onto the political agenda, but there has been near silence on economic growth.

Christine Milne understands the link between economic growth and environmental deterioration.

Christine Milne has been a Senator for Tasmania since the middle of 2005, and she became the leader of the Australian Green Party in April this year. There are currently nine Australian Greens in a house with 76 members.

Milne delivered a speech in late September in which she made some astute observations. She said that we can build an economic system that serves the needs of people and nature, both for today and for tomorrow. She quoted from a report of the World Economic Forum, “More with Less: Scaling Sustainable Consumption and Resource Efficiency”:

“Current trends clearly show that business as usual no longer works. Unless the present link between growth and the consumption of scarce resources is severed, our resource base, governance and policy structures are unlikely to sustain the standard of living societies have grown accustomed to or indeed aspire to. Action to decouple business and economic growth from resource intensity and environmental impact, has never been more critical to the long term success of business.”

Milne continued by suggesting that we reconsider who belongs to the lunatic fringe in our 21st-century economy:

“Surely it’s time that those who advocate economic growth derived from resource extraction and pollution as the major path be the ones labeled wacky, loopy, irresponsible, divorced from reality or connected to the CIA.”

She went on to question who actually benefits from pandering to mining companies while ordinary people are struggling to make ends meet. Her full speech is worth reading.

Where is this likely to lead? The media and politicians are completely out of their depth in considering an alternative to the perpetual growth paradigm. Such a change even seems to be beyond the scope of thinking of conservationists. Even members of the Australian Greens may have underestimated the significance of this speech. Almost everyone seems content to ignore this speech and go on as they have.

But now that a prominent politician has publicly questioned the dogma of growth, we’ve moved a little closer to a much-needed turning point in Australian politics. Thanks to Christine Milne for saying what needed to be said. How refreshing to see true leadership taking root within the barren fields of the Australian political landscape.

Robert Lawrence runs Heritage Bushcare, a small business that removes weeds to improve the condition of areas of remnant vegetation. He is also secretary of the Nature Conservation Society of South Australia and the Native Orchid Society of South Australia. He is the author of Start with the Leaves: A Simple Guide to Common Orchids and Lilies of the Adelaide Hills.

The Populations Problem

by Herman Daly

Herman DalyThe population problem should be considered from the point of view of all populations — populations of both humans and their artifacts (cars, houses, livestock, cell phones, etc.) — in short, populations of all “dissipative structures” engendered, bred, or built by humans. In other words, the populations of human bodies and of their extensions. Or in yet other words, the populations of all organs that support human life and the enjoyment thereof, both endosomatic (within the skin) and exosomatic (outside the skin) organs.

All of these organs are capital equipment that support our lives. The endosomatic equipment — heart, lungs, kidneys — support our lives quite directly. The exosomatic organs — farms, factories, electric grids, transportation networks — support our lives indirectly. One should also add “natural capital” (e.g., the hydrologic cycle, carbon cycle, etc.) which is exosomatic capital comprised of structures complementary to endosomatic organs, but not made by humans (forests, rivers, soil, atmosphere).

The reason for pluralizing the “population problem” to the populations of all dissipative structures is two-fold. First, all these populations require a metabolic throughput from low-entropy resources extracted from the environment and eventually returned to the environment as high-entropy wastes, encountering both depletion and pollution limits. In a physical sense the final product of the economic activity of converting nature into ourselves and our stuff, and then using up or wearing out what we have made, is waste. Second, what keeps this from being an idiotic activity, grinding up the world into waste, is the fact that all these populations of dissipative structures have the common purpose of supporting the maintenance and enjoyment of life.

What good are endosomatic organs without the support of exosomatic natural capital?

As A. J. Lotka pointed out, ownership of endosomatic organs is equally distributed, while the exosomatic organs are not. Ownership of the latter may be collective or individual, equally or unequally distributed. Control of these external organs may be democratic or dictatorial. Owning one’s own kidneys is not enough to support one’s life if one does not have access to water from rivers, lakes, or rain, either because of scarcity or monopoly ownership of the complementary exosomatic organ. Likewise our lungs are of little value without the complementary natural capital of green plants and atmospheric stocks of oxygen. Therefore all life-supporting organs, including natural capital, form a unity. They have a common function, regardless of whether they are located within the boundary of human skin or outside that boundary. In addition to being united by common purpose, they are also united by their role as dissipative structures. They are all physical structures whose default tendency is to dissipate or fall apart, in accordance with the entropy law.

Our standard of living is roughly measured by the ratio of outside-skin to inside-skin capital — that is, the ratio of human-made artifacts to human bodies, the ratio of one kind of dissipative structure to another kind. Within-skin capital is made and maintained overwhelmingly from renewable resources, while outside-skin capital relies heavily on nonrenewable resources. The rate of evolutionary change of endosomatic organs is exceedingly slow; the rate of change of exosomatic organs has become very rapid. In fact the evolution of human beings is now overwhelmingly centered on exosomatic organs. This evolution is goal-directed, not random, and its driving purpose has become “economic growth,” and that growth has been achieved largely by the depletion of non renewable resources.

Although human evolution is now decidedly purpose-driven we continue to be enthralled by neo-Darwinist aversion to teleology and devotion to random. Economic growth, by promising “more for everyone eventually,” becomes the de facto purpose, the social glue that keeps things from falling apart. What happens when growth becomes uneconomic, increasing costs faster than benefits? How do we know that this is not already the case? If one asks such questions one is told to talk about something else, like space colonies on Mars, or unlimited energy from cold fusion, or geo-engineering, or the wonders of globalization, and to remember that all these glorious purposes require growth now in order to provide still more growth in the future. Growth is good, end of discussion, now shut up!

Let us reconsider in the light of these facts, the idea of demographic transition. By definition this is the transition from a human population maintained by high birth rates equal to high death rates, to one maintained by low birth rates equal to low death rates, and consequently from a population with low life expectancy to one with high life expectancy. Statistically such transitions have been observed as standard of living (ratio of exosomatic to endosomatic capital) increases. Many studies have attempted to explain this fact, and much hope has been invested in it as an automatic cure for overpopulation. “Development is the best contraceptive” is a related slogan, partly based in fact, and partly in wishful thinking.

There are a couple of thoughts I’d like to add to the discussion of demographic transition. The first and most obvious one is that populations of artifacts can undergo an analogous transition from high rates of production and depreciation to low ones. The lower rates will maintain a constant population of longer-lived, more durable artifacts.

Our economy has a growth-oriented focus on maximizing production flows (birth rates of artifacts) that keeps us in the pre-transition mode, giving rise to growing artifact populations, low product lifetimes, high GDP, and high throughput, with consequent environmental destruction. The transition from a high-maintenance throughput to a low one applies to both human and artifact populations independently. From an environmental perspective, lower throughput is desirable in both cases, at least up to some distant limit.

The second thought I would like to add to the discussion of demographic transition is a question: does the human transition, when induced by rising standard of living, as usually assumed, increase or decrease the total load of all dissipative structures on the environment? Specifically, if Indian fertility is to fall to the Swedish level, must Indian per capita possession of artifacts (standard of living) rise to the Swedish level? If so, would this not likely increase the total load of all dissipative structures on the Indian environment, perhaps beyond capacity to sustain the required throughput?

The point of this speculation is to suggest that “solving” the population problem by relying on the demographic transition to lower birth rates could impose a larger burden on the environment rather than the smaller burden that would be the case with direct reduction in fertility. Of course reduction in fertility by automatic correlation with rising standard of living is politically easy, while direct fertility reduction is politically difficult. But what is politically easy may be environmentally destructive.

To put it another way, consider the I = PAT formula. P, population of human bodies, is one set of dissipative structures. A, affluence, or GDP per capita, reflects another set of dissipative structures — cars, buildings, ships, toasters, iPads, cell phones, etc. (not to mention populations of livestock and agricultural plants). In a finite world some populations grow at the expense of others. Cars and humans are now competing for land, water, and sunlight to grow either food or fuel. More nonhuman dissipative structures will at some point force a reduction in other dissipative structures, namely human bodies. This forced demographic transition is less optimistic than the voluntary one induced by chasing a higher standard of living more effectively with fewer dependents. In an empty world we saw the trade-off between artifacts and people as induced by desire for a higher standard of living. In the full world that trade-off seems forced by competition for limited resources.

The usual counter to such thoughts is that we can improve the efficiency by which throughput maintains dissipative structures — technology, T in the formula, measured as throughput per unit of GDP. For example a car that lasts longer and gets better mileage is still a dissipative structure, but with a more efficient metabolism that allows it to live on a lower rate of throughput.

Likewise, human organisms might be genetically redesigned to require less food, air, and water. Indeed smaller people would be the simplest way of increasing metabolic efficiency (measured as number of people maintained by a given resource throughput). To my knowledge no one has yet suggested breeding smaller people as a way to avoid limiting births, but that probably just reflects my ignorance. We have, however, been busy breeding and genetically engineering larger and faster-growing plants and livestock. So far, the latter dissipative structures have been complementary with populations of human bodies, but in a finite and full world, the relationship will soon become competitive.

Indeed, if we think of population as the cumulative number of people ever to live over time, then many artifact populations are already competitive with the human population. That is, more consumption today of terrestrial low entropy in non-vital uses (Cadillacs, rockets, weapons) means less terrestrial low entropy available for capturing solar energy tomorrow (plows, solar collectors, ecosystem regeneration). The solar energy that will still fall on the earth for millions of years after the material structures needed to capture it are dissipated, will be wasted, just like the solar energy that shines on the moon.

There is a limit to how many dissipative structures the ecosphere can sustain — more endosomatic capital must ultimately displace some exosomatic capital and vice versa. Some of our exosomatic capital is critical — for example, that part which can photosynthesize, the green plants. Our endosomatic capital cannot long endure without the critical exosomatic capital of green plants (along with soil and water, and of course sunlight). In sum, demographers’ interest should extend to the populations of all dissipative structures, their metabolic throughputs, and the relations of complementarity and substitutability among them. Economists should analyze the supply, demand, production, and consumption of all these populations within an ecosphere that is finite, non-growing, entropic, and open only to a fixed flow of solar energy. This reflects a paradigm shift from the empty-world vision to the full-world vision — a world full of human-made dissipative structures that both depend upon and displace natural structures. Growth looks very different depending on from which paradigm it is viewed.

Carrying capacity of the ecosystem depends on how many dissipative structures of all kinds have to be carried. Some will say to others, “You can’t have a glass of wine and piece of meat for dinner because I need the grain required by your fine diet to feed my three hungry children.” The answer will be, “You can’t have three children at the expense of my and my one child’s already modest standard of living.” Both have a good point. That conflict will be difficult to resolve, but we are not yet there.

Rather, now some are saying, “You can’t have three houses and fly all over the world twice a year, because I need the resources to feed my eight children.” And the current reply is, “You can’t have eight children at the expense of my small family’s luxurious standard of living.” In the second case neither side elicits much sympathy, and there is great room for compromise to limit both excessive population and per capita consumption. Better to face limits to both human and artifact populations before the terms of the trade-off get too harsh.

More People, Less Unemployment?

by Max Kumerow

Bill Clinton took a welcome step toward reality. In his Democratic Convention speech, he pointed out that cutting taxes on rich people and fighting endless wars increased federal debt, and more of the same would make things even worse. Tax cuts and deregulation during the Bush administration failed to bring prosperity and helped cause the global financial collapse and widespread joblessness.

The Chicago School of economics has been preaching for decades, with lots of money from rich people adding to the volume of their message, that low taxes, small government, and deregulation are the road to nirvana. But the last time we had low taxes on the rich and little regulation was called the Great Depression. Clinton, at least, has come to understand that America made a mistake in believing the fairy tale that “government is the problem, so let’s cut rich people’s taxes.”

Clinton still remains bamboozled, however, by the neoclassical nonsense that sees economic growth as the solution to unemployment. On the Daily Show Clinton offered a demographic path to prosperity. He opined that because most of America’s competitors — Russia, Japan, China, and Europe — have low birth rates and aging populations, we will have a younger workforce with a lower old-age dependency ratio, so growth will solve our unemployment and debt problems.

But the notion that population growth cures unemployment is false, just like the idea that cutting taxes on the rich raises revenue and cuts the deficit. The immigration and higher birth rates that keep the population younger also guarantee a higher young-age dependency ratio and a growing population. In a world constrained by high commodity prices and other symptoms of reaching the limits to growth, a growing population leads to high unemployment, rising cost of living, and falling wages. If a young population leads to prosperity, why aren’t places like Nigeria, Rwanda, and Uganda thriving? Why has China gotten so much richer since starting its “one-child” policy?

The fertility rates in all the Asian tiger economies dropped below the replacement level during the decades when their economic output increased dramatically. Hong Kong and Singapore, places with no natural resources and aging populations, have a higher per capita income than the United States. Hong Kong’s 0.97 children per woman and Singapore’s 1.26 are two of the lowest fertility rates in the world.

Birth rates that low mean each generation inherits twice as much as the one before, and a future economy can have full employment with half as many jobs. Scarcer labor means higher wages. New technology and rising productivity can be used to raise incomes instead of what happens with a growing population (i.e., society treads water as the benefits of increasing productivity are canceled out by more people consuming more resources). Low fertility is the path to high incomes and abundance. High fertility is the path to poverty and scarcity.

America’s ongoing population growth has played a role in causing higher unemployment rates, more difficulty funding education, falling real wages for workers, and the incarceration of two and a half million people. You would think that in a country where oil production has fallen by 40% since 1972, a country responsible for so much of the global climate change problem, where forests have been burning, cities have been wrecked by hurricanes, and crops have been withered by drought, we would have learned that more growth is not the answer to unemployment and budget deficits.

Bill Clinton should read ecological economists like Herman Daly. He should pay attention to systems thinkers such as Donella Meadows and Bill McKibben, and consult Al Gore about our ethical responsibilities to future generations. Growth cannot be the solution to unemployment. If all countries decide to grow their populations and their economies, ice will melt, putting cities under sea level, oil will run out, food prices will rise, wages will fall, and human welfare will be reduced, not increased. We will be poorer and fewer people will be able to find jobs.

Common sense says that continuously increasing population makes it harder to keep everyone employed, not easier. The problem is not too few jobs; it’s too many people. There are already too many people consuming too much and diminishing the earth’s long-run carrying capacity.  Economic growth is running into the wall of limited resources on a finite planet. The trends created by economic growth and population growth include higher carbon emissions and climate change, loss of forests, depleted fisheries, soil erosion, species extinctions, toxic contamination, and the possible negative effects of technologies like fracking and genetically modified foods. The path the world is on — economic and population growth — is just as unsustainable as the subprime mortgage market and trillion-dollar federal deficits and will lead to collapse.

Long-run prosperity on a planet with limited land and water and air requires a transition to a steady state economy — a transition which in turn requires a transition to a smaller global population. The higher fertility rates, immigration, and economic growth that Clinton described as the path to prosperity turn out to be the path to collapse.

Do the arithmetic, starting with this year’s federal deficit, the short crop in the Corn Belt, the number of Americans in jail, and cuts to education budgets. Growth has not been the path to full employment or deficit reduction. If Romney was right about tax cuts, we wouldn’t have a federal debt crisis. If Clinton was right about population growth, we wouldn’t have unemployment. It’s time to try something beyond politics as usual.

Max Kummerow has a Ph.D. in urban and real-estate economics. This semester he is a visiting lecturer at Lincoln University in Canterbury, New Zealand.

Population and a Dose of Common Sense

by Blake Alcott

It isn’t true that population size (relative to the size of the earth and its resources) is the “main cause” of unsustainable environmental impact, or the “main problem” when it comes to depletion, pollution, and other concerns over health and happiness for people today and in the future. It also isn’t true that “the real problem” is too much consumption per person by rich people. It is both. It is P x A in the formula:

Impact = f(Population, Affluence, Technology), or simply IPAT.

Many researchers have measured the relative contributions of population and affluence to various kinds of impact. However, since decreases in population can be offset by increases in affluence, and vice versa, changes in either factor do not necessarily lower impact.

Can we be complacent about population size? Can we count on declining birth rates to stabilize or even lower population, now over 7 billion and increasing by 80 million per year (the size of Ethiopia’s population)? We are also, after all, experiencing declining death rates, and rising life expectancy counterbalances declining fertility to some extent. The deeper question is whether a population of 7 billion — or 8 billion or even 11 billion (low and high projections) — exceeds the earth’s carrying capacity.

The number of people that can live on earth obviously depends on how much food we can produce now and over the long term. The evidence suggests that we cannot count on food production to keep pace with population growth:

  • Very little land remains to be converted into agricultural hectares;
  • Such land conversion incurs high costs;
  • Yields per hectare can rise significantly only in Africa and South America;
  • Soil degradation and groundwater depletion curtail production;
  • Petroleum scarcity will increasingly constrain food production because agriculture requires fuel for machinery, water-pumping, and transport as well as oil-derived fertilizers and plastics.

A population’s sustainability depends on its affluence. Therefore, before any society can compute its carrying capacity, it must first decide what material lifestyle it wants — how much it wants to consume. Does it want to eat meat (and not just grain), or use land for sports and entertainment (and not just agriculture), and does it want wilderness for other species? If so, its maximum population is proportionally lower. Once a society has politically decided its desired level of affluence, it can assess appropriate technologies for producing its goods and services most efficiently. Only then can a number be calculated for a desirable and sustainable population size.

Population and affluence are both components of overall environmental impact.  Credit: www.TheEnvironmentalBlog.org

Many countries, if they were to estimate these parameters, would conclude that they are overpopulated, especially if they remember that sustainable size takes into account the rights of future generations and the desirability (on either utilitarian or ethical grounds) of leaving room and resources for non-humans.

Once overpopulation has been recognized, the search for appropriate population policies begins. In the rich countries (the ecological footprint of a rich child, ceteris paribus, will be greater than that of one born in poverty) one could end subsidies for child-bearing, including tax breaks, salary bonuses, parental leave from work and even one-off payments for having a child. Any policy change must consider the rights of already-born children and the goal of gender equality. In poorer societies there is unmet demand for the means of preventing pregnancy. Birth control “technology,” if available to all who want it, would cut today’s 80 million excess of births over deaths by perhaps two-thirds.

Whether rich or poor, a country could also choose to adopt direct policies. Some possibilities, as promoted by many ecological economists, are:

  • Ending subsidies after a couple’s second child;
  • Offering payments for sterilization;
  • Imposing tax penalties for large families; and
  • Setting quotas for child-bearing.

These measures however raise the question of whether a society has the right to legislate how many children its members can have. On this issue, two questions are often confused: (1) the legitimacy of restrictions on individual procreative freedom itself, and (2) the legitimacy of the political process deciding them. If it is an inalienable right to have as many children as one wants, then quotas and other constraining policies would be out of bounds. Treating procreation in this way fits well with the laissez-faire, individualist philosophy of our time. The opposing view holds that reproductive freedom has limits, that at some population level, the interests of society are harmed, and restrictions that support the common good are acceptable and even desirable. Population size, moreover, is one of many issues affecting living beings without a vote, namely other animals and future humans. Concrete proposals have included the right to one child, with permits being transferable (for free or for a price) to someone else.

Such direct policies can be decided democratically or autocratically, and it is the latter that leads many to think immediately of “compulsion” or “coercion” when imagining them. However, every law, by definition, coerces us, so let us just agree to use a democratic process and reject the option of an authoritarian eco-regime. The question then becomes: is it legitimate for a majority — say, 51 or 60 or 66% of the voters — to restrict everybody’s procreative activity? A majority cannot, after all, legitimately legislate the incarceration or death of all red-heads.  But red-heads don’t pose the same problems that overpopulation does.

There is truth in the statement, attributed to David Attenborough, that one cannot conceive of an ecological problem that wouldn’t be easier to solve with fewer people. For example, in poorer countries, hunger and environmental degradation could immediately be mitigated if there were less demand for resources. The issue is to figure out first how many fewer people we’re aiming for, and second how to make a transition that is democratic, compassionate, and fair.

For more details on this topic, see the full paper, which raises more questions and offers many references for further reading.

Alcott, Blake, 2012, “Population matters in ecological economics,” Ecological Economics 80: 109-120. (accessible at www.blakealcott.org > Publications)

“Steady State Economy” — a Positive Vision in International Affairs

by Brian Czech

Before we think about the steady state economy, let’s think for a moment about economic growth. Economic growth still has such positive connotations in domestic politics, especially American politics, that the vast majority of citizens simply assume that whoever can do more for economic growth is the better statesman (man or woman), better Federal Reserve chair, better economic advisor, etc. That’s why the definition of economic growth bears repeating over and over again, to pull the magic cloak from a purely material process. Economic growth simply means increasing production and consumption of goods and services in the aggregate.

In other words, economic growth means increasing population, increasing per capita consumption, or both. There’s nothing magical about it. Economic growth means more and more “stuff” – green stuff, brown stuff, pink stuff — and it takes more “stuff” to make it happen. That’s pretty obvious for the agricultural, extractive, and manufacturing sectors. But service sectors, even the information sector, take more stuff to grow, too.

And stuff tends to run out. Peak Oil, Peak Water, Peak Everything as Richard Heinberg called it; Earth has only so much to go around. Earth is big, but so is 7 billion — the number of people in the global economy. More importantly, guess which one is still growing.

Economic growth is indicated by increasing GDP. In nations with big ecological footprints — the United States, Japan, Germany, China, Brazil — economic growth has long been maxed out within the borders. Huge economies have to reach across their borders for natural resources, and their pollutants go international too. Economic growth is increasingly questioned as a positive vision in international affairs.

Many if not most nations recognize that economic growth has become more of a problem than a solution from a global perspective. That’s why Herman Daly calls it “uneconomic growth.” Resource shortages, pollution, climate change, congestion, and biodiversity loss are all results and indicators of economic (or uneconomic) growth.

In other words economic growth, indicated by increasing GDP, has become a bad deal, at least at the global level. It was a good deal some decades ago when it cost us little in clean air, clean water, fish and wildlife, and peace and quiet. But now it’s a bad deal and we need to recognize it as bad.

Calling economic growth a bad thing doesn’t make the steady state economy a negative vision. Far from it. In fact, when economic growth is a bad thing, only an alternative to growth can be a good thing, right?

So what are the alternatives to economic growth? This is where sticking to the standard, textbook, policy-relevant definition of economic growth comes in handy. Again, economic growth is increasing production and consumption of goods and services in the aggregate, indicated by growing GDP. So we have only two basic alternatives: decreasing production and consumption of goods and services in the aggregate, or stabilized production and consumption of goods and services in the aggregate. The former results in declining GDP and the latter in stabilized GDP. The former is called “recession.” The latter is called a “steady state economy.”

Of these, which one sounds like the better deal? Which one evokes the more positive image? Which one should be advocated as the solution to the problem of economic growth?

I’ll go out on a limb and say it’s the steady state economy.

Fortunately, I had the opportunity to test this hypothesis at the 20th anniversary of the Earth Summit, otherwise known as “Rio+20,” from June 20-22. There in Rio de Janeiro I talked with dozens of delegates from countries ranging in GDP from the gargantuan United States to the diminutive Comoros. Here’s what I found: nearly all favored the steady state economy as the positive solution to the problem of economic growth. Nearly all saw continuous economic growth as bad and the steady state economy as good.

That’s right, nearly all!

Doubt it? Think again. These diplomats ain’t no dummies. They know full well the planet is filling up with people and stuff, and that many national economies are beyond their sustainable levels.

Of course, there are exceptions. Some diplomats have the intellectual disadvantage of a background in neoclassical economics, leading them to believe there is no limit to economic growth. They can’t defend such a fallacious hypothesis, but they still believe it.

Then again, not all diplomats who agree about limits to economic growth will formally acknowledge such agreement. A distinct tendency was clear in Rio: wealthy-nation delegates were afraid to buck the party line of economic growth except in private conversation. The reasons should be obvious. In the United States, for example, we have Wall Street, the Federal Reserve System, and the Department of Commerce pushing hard for economic growth. No one should underestimate the power of these players to influence the language of statesmen, political appointees, and bureaucrats.

In small nations with widespread poverty, on the other hand, the general public, professional diplomats, and elected politicians have one thing in common: they’ve all experienced the unfairness of global economic growth and pro-growth policies. When it comes to natural resources, smaller countries tend to be deal takers, not deal makers, and the terms of trade are harsh.

That’s why the CASSE position on economic growth has garnered signatures from numerous small-country diplomats, ministers, and other delegates in international affairs. In Rio, I found delegate after delegate supportive of steady state economics for international diplomacy. Many were from African, South American, and Asian countries far removed from Wall Street and wary of international pro-growth institutions such as the World Bank, International Monetary Fund, and World Trade Organization. I got the succinct impression that, if only we had the time and access to all diplomats of the world, and even to heads of state, we would find the vast majority of them calling for steady state economics just as the CASSE position describes. That means starting in large, wealthy countries and gradually expanding to other nations after an opportunity to catch up in per capita consumption, at least to a reasonable degree.

Yet many activists, scholars, and ‘think-tankers’ are afraid to talk openly in public about the steady state economy, much less to go on record as supporting it. They think the phrase “steady state economy” has negative connotations. They think this makes the steady state economy too difficult to promote.

The fact is that any macroeconomic goal (growth, steady state, recession) has negative connotations. It’s time to pick your negative connotations!

Some may think that negative connotations can be avoided by the use of feel-good rhetoric such as “green,” “blue,” or “new” economics. I hate to burst the bluegreen bubblegum, but these too have plenty of negative connotations. This was evident in Rio. “Green,” “blue,” and “new” are seen by diplomats for what they are: rhetorical ploys to skirt the tough issues we face in the real world.

Long-time explicit advocates of the steady state economy could, I suppose, be accused of a biased opinion. But I know what I saw in Rio: delegates almost invariably connected quickly with the phrase “steady state economy.” Although it’s a phrase that requires some thought for translation to other languages, it makes so much common sense that the translation occurs alright. For example, the CASSE position on economic growth is already posted in 19 languages. After all the followups from Rio+20, it will also be posted in Chinese, Turkish, Hindi, Bangladeshi, Japanese, and Hungarian.

In political science, a central principle is name recognition. All else equal, the name recognized is the name favored. This applies to politicians, policies, and platforms. That’s why it matters when a professor, activist, diplomat, minister, or head of state chooses a label for a particular economic goal. “Green” has name recognition, but its meaning is fuzzy. “New” has little recognition or meaning, at least as applied to economics. “Steady state economy” has modest recognition, so far, but it clearly expresses the primary principle; a stabilized economy that is neither growing nor shrinking, but fluctuating around a sustainable level.

“Steady state economy” is a positive, proactive phrase that’s productive in international affairs. It has decades of academic reputation from the work of Herman Daly and others. It speaks clearly of the need to stabilize the size of the human economy. It has plenty of backing by dignitaries in sustainability science, policy, and diplomacy, and the list of dignitaries (not yet updated from Rio) is growing fast. We should encourage the purveyors of “green,” “blue”, and “new” economics to adopt it.

Aren’t there reasons enough?