Abstract
A steady-state economy is incompatible with continuous growth, either positive or negative growth. The goal of a steady state is to sustain a constant, sufficient stock of real wealth and people for a long time. A downward spiral of negative growth — a depression — is a failed growth economy, not a steady-state economy. Halting downward spiral is necessary, but is not the same as resuming continuous positive growth. The growth economy now fails in two ways: (a) positive growth becomes uneconomic in our full-world economy; (b) negative growth, resulting from the bursting of financial bubbles inflated beyond physical limits, though temporarily necessary, soon becomes self-destructive. That leaves a non-growing or steady-state economy as the only long-run alternative. The level of physical wealth that the biosphere can sustain in a steady state is almost certainly below the present level. The fact that recent efforts at growth have resulted mainly in bubbles is evidence that this is so. Nevertheless, current policies all aim for the full reestablishment of the growth economy. No one denies that our problems would be easier to solve if we were richer. That rich is better than poor is a definitional truism. The question is, does growth any longer make us richer, or is it now making us poorer?
Systems, scientific and philosophical, come and go. Each method of limited understanding is at length exhausted. In its prime each system is a triumphant success; in its decay it is an obstructive nuisance.
(Alfred N. Whitehead, 1948, 203–4)1
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Note
The epigraph from Whitehead is respectfully repeated from K. William Kapp’s prescient book of 1950, The Social Costs of Private Enterprise. That the same quotation (as well as Kapp’s arguments) should be as relevant in 2011 as it was in 1950, is a sad reflection on economists’ predilection for the role of obstructive nuisance.
Editor information
Editors and Affiliations
Copyright information
© 2012 Julien-François Gerber and Rolf Steppacher
About this chapter
Cite this chapter
Daly, H.E. (2012). Moving From a Failed Growth Economy to a Steady-State Economy. In: Gerber, JF., Steppacher, R. (eds) Towards an Integrated Paradigm in Heterodox Economics. Palgrave Macmillan, London. https://doi.org/10.1057/9780230361850_10
Download citation
DOI: https://doi.org/10.1057/9780230361850_10
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-33825-2
Online ISBN: 978-0-230-36185-0
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)