If we must stop aggregate growth because it is uneconomic, then how do we deal with poverty in the SSE? The simple answer is by redistribution — by limits to the range of permissible inequality, by a minimum income and a maximum income. What is the proper range of inequality — one that rewards real differences and contributions rather than just multiplying privilege? Plato thought it was a factor of four. Universities, civil services and the military seem to manage with a factor of ten to twenty. In the US corporate sector it is over 500. As a first step could we not try to lower the overall range to a factor of, say, one hundred? Remember, we are no longer trying to provide massive incentives to stimulate (uneconomic) growth! Also, since we are not trying to stimulate aggregate growth, we no longer need to spend billions on advertising. Instead of treating advertising as a tax-deductible cost of production we should tax it heavily as a public nuisance. If economists really believe that the consumer is sovereign then she should be obeyed rather than manipulated, cajoled, badgered, and lied to. Herman Daly, A Steady-State Economy
Saturday, March 14, 2009
Sunday, March 8, 2009
Ecological economists have offered empirical evidence that growth is already uneconomic in high consumption countries (see ISEW, GPI, Ecological Footprint, Happy Planet Index). Since neoclassical economists are unable to demonstrate that growth, either in throughput or GDP, is currently making us better off rather than worse off, it is blind arrogance on their part to continue preaching aggregate growth as the solution to our problems. Yes, most of our problems (poverty, unemployment, environmental degradation) would be easier to solve if we were richer-that is not the issue. The issue is: Does growth in GDP any longer really make us richer? Or is it now making us poorer? Herman Daly, A Steady-State Economy, 2008The re-distribution of poverty that will happen over the next century will either occur as a deliberate and considered mass movement predicated on a collective understanding of what the landbase will actually support, or if we do nothing the re-distrution of poverty will be violent and horrible. Either way, the fat years are most probably over.