The ecological economics against the crisis. The horizon? Herman Daly: «A steady state economy»

[30 settembre 2013]

herman daly 4

Even before the ecological economics, steady state economy has a long historical tradition, which goes back to great economists like John Stuart Mill up to the most recent studies carried out by you and other ecological economists. How would you summarize this model?

«A steady-state economy is defined by constant stocks of aggregate physical wealth (artifacts) and a constant population, each maintained at some chosen, desirable level by a low rate of throughput—i.e., by low birth rates equal to low death rates and by low physical production rates equal to low physical depreciation rates, so that longevity of people and durability of physical stocks are high. The throughput flow, viewed as the cost of maintainng the stocks, begins with the extraction (depletion) of low entropy resources at the input end, and terminates with an equal quantity of high entropy waste (pollution) at the output end. The throughput must be within the regenerative and absorptive capacities of the ecosystem».

Six years of crisis have already passed, asking for solutions that envisage measures in support of economic growth and consumption: a goal that has never been achieved, at least in Italy. In this context, what does the steady-state economy suggest to this end?

«The solution can no longer be growth because continuing growth in today’s full world has become uneconomic—it increases environmental and social costs faster than it increases production benefits, making us collectively poorer rather than richer. Poverty must be fought by wealth and income redistribution, technical advance in resource productivity, and ethical improvement in our priorities».

How would you judge the “green” economic policy of Obama’s administration – which is also trying to give a new impulse to the American manufacturing industry and is investing billions of dollars in the study of the human brain – and the EU policy, which on the contrary considers austerity the only solution to this crisis?

«Both US and EU are still growth economies. They just have differing policies aimed at the same goal of growth. Since growth is now uneconomic neither policy makes sense».