Sunday, January 09, 2005

A steady state economy?

The following web site was recently brought to my attention,

The site promotes the concept of a steady state economy. In other words it promotes sustainability as distinct from that chimera, sustainable development. A steady state economy has been proposed by several ecological economists, (see any of several books by Herman Daly) but the proposals often deny inconvenient necessary consequences, or avoid dwelling on them. The above web site conforms to this habit.

Humans will achieve an equilibrium with other life and with the natural rate of resource creation. If they do not volunteer to create that equilibrium, nature will do it for them. The rate of extraction of minerals will become a tiny fraction of the current rate. The destruction of renewable resources will be reduced from the current hugely excessive rate to a rate at which the world can renew itself. Our challenge is to accommodate this ineluctable necessity while preserving civilization.

The argument that a steady state economy will be necessary in the future is irrefutable and easy to understand. Any suggestion that the necessity is imminent is scorned by everyone of power or influence. It is scorned by virtually all business people who are aware of it. It may be scorned most by those who pretend to believe in "sustainable development". Most greens have no understanding of what it would mean to have a steady state economy. Most greens who do understand what it would mean avoid talking about it to avoid even further marginalization.

How would a steady state economy differ from ours? Its most consequential difference would be the absence of any net economic growth. Legal, cultural, and institutional mechanisms that would prevent economic growth while allowing a technical civilization to operate cannot now be fully imagined. It might take centuries to evolve them. To glimpse the difficulties involved, consider that any local increase of population, or increased production of physical goods or food, would have to be balanced by a decrease somewhere else. Any new invention or business practice that might increase the use of environmental factors of production in one area of the economy could be introduced to application only with extensive bureaucratic controls to reduce the use of the same environmental factors in other parts of the economy.

Because of the impractical complexity and intrusiveness of the mechanisms required to introduce innovation, a steady state economy would likely be also a static economy, with almost no innovation, except perhaps in purely personal matters of style, entertainment, and unapplied knowledge. Even here, no use of innovation, and no requirement for the means to pursue innovation, could be allowed to produce wealth. Law alone would be incapable of enforcing this restriction. The constraints would have to be embedded also in attitudes inculcated in childhood. It is hard to imagine now how attitudes of deprecation of most kinds of innovation could be made general without inculcating attitudes deprecating all innovation, but the future might find a way.

This analysis may seem fantastic. I find it so myself. But any hope for a continuing civilization seems to require it. Our civilization is now encountering circumstances that may end it long before a steady state economy could evolve, even if those in favor of a steady state economy were a dominant constituency, which they obviously are not.

Technical civilization can no longer tolerate interruption. If civilization is interrupted now, if we enter a truly primitive period, humans are unlikely ever to experience a technical civilization again. With fossil fuels gone, with easily accessible mineral concentrations gone, the means to climb the ladder of technical civilization will be gone for many millions of years. Unless we opt for a steady state civilization, one that eliminates internal economic instability, technical civilization will produce its own permanent end, even if the human race survives it by many millennia.

This century will see a great reduction of the human population. Can we find a way to preserve technical civilization through the chaos of the reduction?