Growth is the be-all and end-all of mainstream economic and political considering. With no continually rising G.D.P., we’re told, we risk social instability, declining standards of living and just about any hope of progress. But what concerning the counterintuitive possibility that our current pursuit of growth, rabid because it is and causing such great ecological harm, may be incurring more costs than gains? That possibility — that prioritizing growth is ultimately a losing game — is one which the lauded economist Herman Daly has been exploring for greater than 50 years. In so doing, he has developed arguments in favor of a steady-state economy, one which forgoes the insatiable and environmentally destructive hunger for growth, recognizes the physical limitations of our planet and as an alternative seeks a sustainable economic and ecological equilibrium. “Growth is an idol of our present system,” says Daly, emeritus professor on the University of Maryland School of Public Policy, a former senior economist for the World Bank and, together with the likes of Greta Thunberg and Edward Snowden, a recipient of the celebrated Right Livelihood Award (often called the “alternative Nobel”). “Every politician is in favor of growth,” Daly, who’s 84, continues, “and nobody speaks against growth or in favor of regular state or leveling off. But I believe it’s an elementary query to ask: Does growth ever develop into uneconomic?”
There’s an obvious logic to your fundamental argument in favor of a steady-state economy, which is that the economy, like all the pieces else on the planet, is subject to physical limitations and the laws of thermodynamics and as such can’t be expected to grow perpetually. What’s less obvious is how our society would function in a world where the economic pie stops growing. I’ve seen people like Peter Thiel, for instance, say that without growth we might ultimately descend into violence. To me that means a reasonably limited and grim view of human possibility. Is your view of human nature and our willingness to peacefully share the pie just more hopeful than his? First, I’m not against growth of wealth. I believe it’s higher to be richer than to be poorer. The query is, Does growth, as currently practiced and measured, really increase wealth? Is it making us richer in any aggregate sense, or might it’s increasing costs faster than advantages and making us poorer? Mainstream economists don’t have any answer to that. The rationale they don’t have any answer to that’s that they don’t measure costs. They only measure advantages. That’s what G.D.P. is. There’s nothing subtracted from G.D.P. However the libertarian notion is logical. In the event you’re going to be a libertarian, then you definitely can’t accept limits to growth. But limits to growth are there. I recall that Kenneth Boulding said there are two sorts of ethics. There’s a heroic ethic after which there’s an economic ethic. The economic ethic says: Wait a minute, there’s advantages and costs. Let’s weigh the 2. We don’t need to charge right over the cliff. Let’s take a look at the margin. Are we convalescing off or worse? The heroic ethic says: Hang the fee! Full speed ahead! Death or victory at once! Forward into growth! I suppose that shows a faith that if we create too many problems in the current, the long run will learn easy methods to cope with it.
Do you’ve that faith? [Laughs.] No, I don’t.
Historically we predict that economic growth results in higher standards of living, lower death rates and so forth. So don’t we’ve got an ethical obligation to pursue it? In ecological economics, we’ve tried to make a distinction between development and growth. When something grows, it gets greater physically by accretion or assimilation of fabric. When something develops, it gets higher in a qualitative sense. It doesn’t should get greater. An example of that’s computers. You’ll be able to do unbelievable computations now with a small material base in the pc. That’s real development. And the art of living is just not synonymous with “more stuff.” People occasionally glimpse this, after which we fall back into more, more, more.
But how would a rustic proceed to boost its way of life without growing its G.D.P.? It’s a false assumption to say that growth is increasing the way of life in the current world because we measure growth as growth in G.D.P. If it goes up, does that mean we’re increasing way of life? We’ve said that it does, but we’ve not noted all the prices of accelerating G.D.P. We actually don’t know that the usual goes up. In the event you subtract for the deaths and injuries attributable to automobile accidents, chemical pollution, wildfires and lots of other costs induced by excessive growth, it’s not clear in any respect. Now what I just said is most true for richer countries. Actually for another country that’s struggling for subsistence then, by all means, G.D.P. growth increases welfare. They need economic growth. That signifies that the rich a part of the world has to make ecological room for the poor to catch as much as an appropriate way of life. Meaning cutting back on per capita consumption, that we don’t hog all of the resources for trivial consumption.
From Herman Daly
You said “make ecological room,” which brings to mind the arguments you’ve made about how we’ve moved from an empty world to a full one. But how can we know that our world is full and that we’re operating near the bounds of the planet’s ecological capability? What I call the empty world was filled with natural resources that had not been exploited. What I call the total world is now filled with folks that exploit those resources, and it’s empty of the resources which have been depleted and the spaces which have been polluted. So it’s an issue of empty of what and filled with what. Is it empty of advantages and filled with cost? Or filled with advantages and empty of cost? That gets to that time of taking note of the prices of growth.
Aren’t the intense difficulties that we’ve seen during past recessions or periods of stagnant growth indicative of what would occur in a steady-state economy? The failure of a growth economy to grow is a disaster. The success of a steady-state economy to not grow is just not a disaster. It’s just like the difference between an airplane and a helicopter. An airplane is designed for forward motion. If an airplane has to face still, it’ll crash. A helicopter is designed to face still, like a hummingbird. So it’s a comparison between two different designs, and the failure of 1 doesn’t imply the failure or success of the opposite. But with a purpose to move from our present growth economy to a steady-state economy, that’s going to imply some vital design principles — some changes in the elemental design.
Let’s say that tomorrow the US government says it recognizes the necessity for ecological balance and goes to de-emphasize growth. Wouldn’t every other country should make the identical decision for it to have the specified ecological effect? That’s a really difficult query. In the event you attempt to enact laws for counting the ecological costs of your production in the US and then you definitely enter into trading relations with one other country that doesn’t count the prices, they’ve a competitive advantage. They might damage themselves in the long term, but within the short run they’re going to undersell you. This creates huge problems for the free traders since the answer to the issue is to have a tariff to guard the U.S. industry. At one time I’d have tended to favor moving toward a worldwide government. I don’t know what modified my mind. Perhaps spending six years on the World Bank made me think that global governance looks like a chimera. I believe you’re stuck with nation-states. But that is globalism versus internationalism. Globalism says to erase national boundaries. Let’s have one global system that we manage globally. Internationalism says national boundaries are vital, but they’re not the last word thing. This was the philosophy behind the Bretton Woods agreements. We said we’ve got a world of interdependent nations, that are fundamentally separate but attempt to be cooperative. That’s the model that we’re stuck with. So one of the best road forward is for nations to try to maneuver toward a gradual state and accept the undeniable fact that you’re going to wish to have some tariffs and hope that the resulting advantages are sufficient to persuade other nations to follow suit.
Quite a lot of what you’re talking about has to do with getting humanity — from individuals to corporations to governments — to just accept the concept of getting “enough” and that constraining the flexibility to pursue “more” is an excellent thing. Those ideas are principally anathema to modern Western society and, especially, certain notions of liberty. So what would the inflection point or mechanism be which may move people away from that mind-set of “more”? So, how do you envision a successful steady-state economy? First, back up and say, How do you envision a successful steady-state Earth? That query is less complicated because we live in a single. Earth is just not expanding. We don’t get recent materials, and we don’t export stuff to space. So you’ve a steady-state Earth, and if you happen to don’t recognize that, well, there’s an education problem. But again, there’s this heroic ethic and economic ethic. Possibly the heroic ethic is the suitable one, but religion’s counsel is to listen to the fee. Don’t make people worse off.
Eric Roxfelt/Associated Press
Do your religious beliefs influence your economic ideas? I’ll start with the second a part of that query. Once you study economics, you’re the connection between ends and means. You would like to allocate your means in order to maximally satisfy your ends. But traditionally economics has begun with what I’d call intermediate means and intermediate ends. Our intermediate ends may be an excellent eating regimen, education, a certain quantity of leisure, health — the advantages of wealth. We dedicate our means toward these intermediate ends. Our intermediate means are commodities that we’re in a position to produce: food and industrial goods, education. Economics goes from intermediate means, that are limited, to intermediate ends, which economics says are unlimited. I say, let’s not only discuss intermediate means. Let’s ask what our ultimate means are. What’s obligatory to satisfy our ends and which we ourselves cannot make but must take as given? Is there a solution to such an enormous query? I believe there may be. I learned from my old professor Georgescu-Roegen that it’s matter and low-entropy energy. You would like matter and energy to perform your physical ends. But the primary law of thermodynamics says that matter and energy can never be destroyed or created. You’ll be able to change its form, and all processes change that form from low-entropy, useful energy to high-entropy, useless energy. Our ultimate means are constrained by the entropy law. But is there an ultimate end? That’s harder to reply.
Are you able to give it a shot for me? I believe we’re all within the position where we’ve got to try to reply it for ourselves. But I can rule out the present answer, which is that growth is the last word end. Now, as an alternative of that you possibly can say spiritual improvement is the last word end. That gets you into fundamental religious questions: What’s the meaning of life? Where did I come from? What’s going to occur once I die? These are questions people used to consider as fundamental. Now they’re marginal, unscientific. My critique of economics because it exists today could be that it is simply too materialistic since it doesn’t consider the connection between the last word ends and the intermediate ends. At the identical time, economics is just not materialistic enough since it also refuses to cope with the last word means. It doesn’t ask questions on the elemental limits of the entropic nature of the world, of matter and energy and adapting to those physical limits.
Let me keep on with ultimate ends for a second. What do you’re thinking that the meaning of life is? Everyone has a solution to that, even when it’s simply to punt, but I’m a Christian. I do think there’s a creator. I don’t think that you would be able to say life is an accident, which is actually what scientific materialism says. Neo-Darwinism has gotten a free ride philosophically for a very long time. Once you calculate the compound probability of all these infinitesimally probable events happening directly to generate life, it becomes quite absurd. The Neo-Darwinist types say, “Yes, we accept that, that’s mathematics.” It’s totally improbable that life must have originated by probability in our universe. “But we’ve got infinitely many unobserved universes!” Infinitely many universes, unobserved? “Mathematically it could have happened!” And our universe is the lucky one? They give the impression of being down their noses at religious individuals who say there’s a creator: That’s unscientific. What’s the scientific view? We won the cosmic lottery. Come on.
You’ve spent a lifetime arguing rationally and diligently to your ideas, and there may be real discussion happening about alternatives to an economy predicated solely on growth. But growth remains to be king. Is that in any respect disappointing? My duty is to do one of the best I can and put out some ideas. Whether the seed that I plant goes to grow is just not as much as me. It’s just as much as me to plant it and water it. In fact, I don’t think burning the world is ethically mandated by the last word end, so I prefer to see the ideas of ecological and steady-state economics move forward. But you’re asking about disappointment. I get a whole lot of criticism within the sense of “I don’t like that; that’s unrealistic.” I don’t get criticism within the more rational sense of “Your presuppositions are unsuitable” or “The logic which you reason from is unsuitable.” That could be a disappointment. Georgescu-Roegen made lots of the same arguments, and he was also completely ignored. In his case he had made other contributions to mathematical economics, which must have given credibility to his more radical ideas but didn’t. I lacked that independent thing, so it’s much more unlikely I could be taken seriously. But unlikely things do occur.
This interview has been edited and condensed from two conversations.
Opening illustration: Source photograph from University of Maryland
David Marchese is a staff author for the magazine and the columnist for Talk. Recently he interviewed Neal Stephenson about portraying a utopian future, Laurie Santos about happiness and Christopher Walken about acting.