Wednesday, August 29, 2018

The Inevitability of Steady-State Economics

You cannot have unlimited growth of anything on a finite planet.

Obvious, right?

Not to the geniuses in charge of the world's political-economic system. Or to humanity in general. The inherent lack of empathy in our species is evidenced by the continued desires of many of us for lots and lots of offspring. I once asked "Do you suppose that a Petri dish of bacteria had individuals in it saying 'Don't worry. God will provide.' before they used up all the nutrients and the population crashed and then died?"

[Before I forget, I'd like you to think about whether the majority of people in your neighbourhood would be as clueless about the rest of the world as these strollers on Hollywood Boulevard shown on the Jimmy Kimmel show? (Even assuming they edited out people who knew a few countries and where they were; the fact that in one afternoon they found that many people so ignorant of the world is sobering.) This is what I mean by our lack of empathy. The same thing that makes so many people so totally incurious about the planet they live on and the other people they share it with, so that they don't even occasionally break out a map to find out where a place is, is the same thing that makes so many of us never even think about people and events outside of our own personal social networks. Look at those people in that video. Many of them seem fairly well adjusted; materially successful, and of normal intelligence. I believe that many of the people you pass on the street are air-heads though. Many of the jobs in post-industrial societies are either bullshit jobs or ones that require little in the way of wide knowledge. You make a good choice about a career, you train for the career, you get in the career and you go through the motions and provide for your family and your toys. This is humanity. This is what we have to work with. It would behoove us to adjust our tactics to this reality.]

Capitalism is threatening the planet's ability to sustain us. (I don't think the planet is in any danger. Nor life on the planet for that matter. I'm sure microorganisms of one kind or another will survive. It's highly likely that humanoids of some sort will persist among the ruins. But civilization? Forget it.) This is the system that posits individual self-interest and a free economy of guiding society (like an "invisible hand") to the best outcomes. Self-interest is rewarded by profit. Profit is growth. (Getting more back than what you put in.) Capitalism requires economic growth. Perpetual economic growth is impossible.

The alternative is Steady State Economics.
Just as economic growth is the predominant macroeconomic policy goal identified or implied by neoclassical economics, the steady state economy is the predominant macroeconomic policy goal identified or implied by ecological economics. To the extent that ecological economics is a normative transdisciplinary endeavor rather than a purely analytical framework, its three main concerns are sustainability, equity, and efficiency, each of which may be served via public policy. Neither economic growth nor economic recession are sustainable; therefore, the steady state economy remains the only sustainable prospect and the appropriate policy goal for the sake of sustainability.
The steady state economy may be pursued in the policy arena with the same policy tools that have historically been used to facilitate economic growth. These include fiscal policy tools such as government spending and taxation, and monetary policy tools such as money supplies and interest rates. Certain institutional adjustments are also entailed. For example, some have posited that a fractional reserve banking system may not be reconciled with a steady state economy and that fee-service banking is the most feasible alternative. Other public policies pertaining to ecological integrity and environmental protection may also be conducive to a steady state economy. For example, some have posited that the Endangered Species Act of 1973 was an implicit prescription for a steady state economy balanced with an economy of nature characterized by numerous threatened and endangered yet stabilized species.
This obviously requires a radical re-thinking and restructuring of our entire political economy. How to achieve this? As with all things, the answer is "Workers as Citizens." Is your workplace creating crap that nobody needs? Well, instead of a Green dictatorship of granola-eating, sandal-wearing Stalinists, shutting it down and sending you out into the streets to grow grain in public parks, what if you found alternative uses for your workplace's productive capacity? Continue to follow business as usual for as short a period as possible, but utilize public revenues to transform your entire business.

This radical shift of productive capacity will need a stable, public sector to finance the changes that are needed (along with non-public revenue). None of this can really take place in conditions of violent revolutionary instability.

Think of the economy as more like a family than a business. A family doesn't consist of atomized individuals each seeking to maximize their profits in exchanges with the other members. Neither should the human race. Take the resources of the lands and the seas as a given and REDISTRIBUTE wealth from those who have more than enough to those who have little or nothing. Lower consumption expectations to what is feasible with given resources and which does not require leaving others with less than they need.

In our society, "happiness" is obtained by constant consumption and by having more than others. (Inevitably, this produces unhappiness for the majority who know that others are "winning" while they are losing.) Other societies have different ways of obtaining happiness and this requires far less in the way of resources. We could advertise the benefits of equality, stability, increased leisure, democratic control over one's own day-to-day life, and a myriad of other aspects of a democratic steady-state society.

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