I’ve been listening to a couple of different podcasts lately that have mentioned how our society could benefit from a steady state economy (shoutout to The Growth Busters podcast, produced by a Coloradoan). The steady state economy is a topic I will continue to write about and one that I’m interested in further exploring. I think it is an important topic to educate those that see the world through money more than the environment.
The phrase “steady state economy” originated from environmental economics, most notably the work of Herman Daly, but its roots are in classical economics. The steady state economy is often discussed in the context of economic growth and the impacts of economic growth on ecological integrity, environmental protection, and economic sustainability (Steady State, 2019). In layman’s terms, a steady state economy is not dependent on GDP or infinite growth; rather, it is dependent on a stable or mildly fluctuating economy. The “constancy” of a population and capital stocks implies mildly fluctuating in the short run but exhibiting a stable equilibrium in the long run (2019).
In a steady state economy, ecological limits are not exceeded, birth rates equal death rates, and production rates equal depreciation rates. Our population and consumption are stabilized and sustainable (and we are by no means sustainable or stabilized in either one). Before the capitalists get offended, I am not proposing a socialist economy or society at all and neither is the steady state economy. Simply, all this means is that we do not have to measure our economy by growth (GDP) and can measure our economy on overall human health and personal success. And with a lower and more sustainable population, this is easier to achieve. Every person can have access to better jobs, better healthcare, better education, better homes and neighborhoods, etc. This could also have the potential of offsetting some of the consequences from inflation and the continuous rise of cost of living expenses.
The steady state economy is not a new idea. Famous economists such as John Maynard Keynes greatly supported the idea of a steady state economy. He believed a day would come when society could focus on ends (ex: happiness) rather than means (ex: economic growth and individual pursuit).
“The day is not far off when the economic problem will take the backseat where it belongs, and the arena of the heart and head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behavior and religion.”
Over 100 years ago, economists and environmentalists predicted the devastation brought on by neoliberalism, or modern capitalism. Many modern-day economists are coming to terms with the limits on growth and how our economy and society needs to evolve around these limits. Our continuous need for more is only going to ransack us in the end – and we are not too far away from that. As a society, in order to be economically successful, we need to prioritize limits to growth and work on reducing what we have already exceeded (soundly and ethically). We need to be able to provide for a healthier society, because in return, happier people equals better financial security and stability. We cannot continue on with our growth-obsessed economy and environmental destruction. We are fully capable of remodeling our economy.
A steady state economy can enhance a society and assure every person a better life, but there is a maximum size at which this type of economy can exist. The question is, how do we get big businesses and politicians on board?
Steady State Economy Definition. (2019). Center for the Advancement of the Steady State Economy. Retrieved from https://steadystate.org/discover/definition/.