June 02, 2012

Avarice is a vice, the exaction of usury is a misdemeanour, and the love of money is detestable. - John Maynard Keynes


Poised on the brink of economic meltdown as we are, governments all over the world are baying frantically for growth. But growth is not the answer to our problems.

Way back in the 1700’s Adam Smith recognized a limit to economic growth. He predicted that in the long run, population growth would push wages down, and natural resources would become increasingly scarce. 
Consider a steady state economy - an economy of stable or mildly fluctuating size, minimal chance of the boom and bust cycle, less opportunity for outright greed. The term can apply equally to a national economy, a local, regional, or global economy. To be sustainable, a steady state economy must not exceed ecological limits, and that is it’s most important attribute.

Our recent and unprecedented growth in economic activity has significantly shifted the balance of nature with potentially disastrous consequences for the ecology of the planet, for our own well-being but particularly for that of the next generation. It is a mistake to believe that more growth will diminish our problems. In the long term more growth would be a disaster, as continuous growth is completely incompatible with sustainability.

A steady state economy does not imply a stationary state of human improvement. There would be as much scope as ever for all kinds of mental culture, and moral and social progress; as much room for improving the Art of Living (and a bigger likelihood of it being improved), when minds cease to be engrossed by the shallow art of obtaining more money.

The human economy is embedded in nature, completely. Without the natural world to draw upon, there is nothing to make money from. But we have been perverse. We have exploited nature to its very limits, maybe beyond its ability to absorb our delinquency. Economic processes are actually biological, physical, and chemical processes. Humans don’t create anything, they transform it into something else – plastics, cars, toxic waste.
Economic growth cannot be relied upon to alleviate poverty either. On the contrary, economic growth has polarized wealth – mostly into the hands of the few. If the pie isn’t getting any bigger, we need to cut and distribute the pieces in a fair way. Poor people who have trouble meeting basic needs tend not to care about sustainability - how can they when the priority is finding the next meal. At the other end of the scale, excessively rich people tend to consume unsustainable quantities of resources. Fair distribution of wealth, therefore, is a critical part of sustainability and the steady state economy.

60 years ago, John Maynard Keynes said “The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behaviour and religion.”

Economic collapse is extremely painful. But environmental collapse - the collapse of the planet's support systems which sustain life on earth as we know it - that is truly unbearable.

Governments have their heads stuck in the past. They can only think of recreating what has been – growth. But the future will be different. The future needs the fairness and sustainability only steady state economics can bring.

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