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    The Golden Goose Egg
    By Holly Moeller | October 12th 2012 11:46 AM | 12 comments | Print | E-mail | Track Comments
    About Holly

    I'm a graduate student in Ecology and Evolution at Stanford University, where I study ecosystem metabolics and function. In particular, I'm interested...

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    I’ve been meaning to write a column on steady-state economics for some time. Last year, I even did some preliminary research, before getting caught up in topical current events instead. Then, last week, I returned to my internet perusal, again typing in my search phrase, “zero growth economy.” To my consternation, the results had changed dramatically. While the radically different economic philosophy I was after still topped the list, many of the recent hits came from news articles reporting on the dire economic straits of Europe, the United States, and even China.

    Then, as I glanced through the articles, absorbing the negative tone and fearful outlook, I realized how perfectly they highlighted the contrast between our present-day economic model and a zero growth one.

    In this country – indeed, globally – the economic motto is “Grow, grow, grow!” Unemployment on the rise? Grow businesses to add more jobs. Bank accounts dry? Grow sales to fill the coffers. Investments stagnating? Grow your portfolio until the zeros disappear.

    To some extent, economic growth is necessary, particularly because the human population is still expanding. Basic human needs for food and shelter – plus some extra for the luxury of financial security – must be met, so economies must expand accordingly. But beyond a certain point, happiness no longer scales with income.

    Where is that point? In the United States, a 2010 study by Princeton scientists Daniel Kahneman and Angus Deaton placed it at the (admittedly high) household income level of $75,000. While people who earned more than that did claim to be more satisfied with their lives, their happiness and emotional well-being didn’t improve with the extra income.

    Despite this intrinsic limit to how good tangible things can make us feel, we’ve pinned ourselves commercially and socially to an economic model that relies on growth. We tell ourselves – through advertisements, “keeping up with the Joneses,” and our definition of “success” – that the goal is to have more money and more things. And the only way to support this growing demand is to grow the economy.

    Unfortunately, economies simply cannot grow forever. Influential economists from Adam Smith to John Maynard Keynes acknowledged fundamental limits to growth imposed by natural resources. There’s only so much coal to fire the power plant, only so much lithium for hybrid car batteries. And we have plenty of evidence – Easter Island, the Mayan Empire, and so on – of societies who exceeded the natural limits to their growth and then collapsed.

    Of course, many have argued that knowledge-based economies, which exchange thoughts and ideas for money, can decouple economic growth from resource limitations. Likewise, increased technological efficiency can allow the same raw materials to stretch farther. Still, it seems impossible to imagine any real economy that could grow infinitely in any meaningful way – though it’s easy to envision runaway inflation driving up dollar values.

    Meanwhile, even in our current global economic state – which includes 1.2 billion people experiencing extreme poverty as they survive on less than $1.25 per day, and billions of citizens in growing economies dreaming of living a resource-demanding American lifestyle – we’ve already exceeded the natural limits of our planet. 

    We’re moving rapidly past the atmospheric checkpoints that scientists have earmarked as climate change turning points. We support most of our economic machinery on non-renewable fossil fuels. The ecological footprint analysis of Wackernagel and Rees – which tallies up the physical footprint of all our impacts, from water use to food production to carbon sequestration – calculated that we already use the equivalent of 1.5 Planet Earths.

    At what point will we realize that we have an obligation to ourselves, to live not as mindless consumers but rather by striving for balance by seeking fulfillment in a myriad of other ways. In this country, we continue to rank our families, our friendships, and our mental and spiritual wellbeing highly – at least in principle. Let’s allow our economic system to reflect those values by putting moneymaking in its rightful place.

    We need to re-define our economic system as seeking a sustainable steady state. In this time of increasing awareness of resource limitations, and of the consequences of human activity (e.g., climate change and species extinction), we have a unique opportunity to embrace zero growth and the idea of having “enough.” It’s time to see that goose egg at the bottom of the balance sheet not as a mark of economic failure, but rather as a sign of social growth.

    Comments

    I've been afraid to comment for fear of being called a communist or, even worse, not accepting Ayn Rand into my heart as my personal savior. I don't mind being called a Malthusian though.

    The economy too often is treated like some kind of god, instead of as a crude, social science description of a system. And economic activity gets elevated above all other human activity, or worse is used to evaluate the benefit of all human activity. It's gotten so bad that it actually sounds cheesy to say, money isn't everything.

    I think the most important thing is to find a way for the vaunted bottom line to include all the externalities, like pollution and the opportunity cost of exhausting natural resources, and just - everything. (I keep thinking, the chemists of the future might have amazing uses for light sweet crude, and curse us cavemen for setting GDMF fire to all of it.)

    My actual point amidst this rambling; I think that uber-comprehensive bottom line is the one that has to balance.

    But why does it have to come to zero? I can envision perpetual enrichment, for humans and the rest of the planet too, at least for centuries, after which it's impossible to guess. After the workers of the world unite, that is; for they have only their chains to lose.

    There, and I thought I was going to say something about how Malthus was a Pollyanna. Because while I can envision a world of perpetual happy eco-prosperity, what I actually see happening would give Malthus ulcers. Oh, good, I said it.

    Thor Russell
    Seeing as we are living unsustainably at the moment, some kind of zero growth isn't an option because that would mean the status quo, e.g. running out of fossil fuels while destabilising the climate. We need rapid growth of alternatives just to stay where we are. We don't of course need continuing growth of consumption, but we will need to manufacture transport/farming solutions etc for billions of people that doesn't require non-renewable resources.
    Economic growth is of course a pretty screwed up measure as it is reported at present. Technological progress doesn't even figure i.e. computers getting 2* better while using the same resources and costing the same amount is just ignored and counted as no growth. Also Increasing consumption of non-renewable resources is counted as growth, when you could argue it is more similar to spending your savings at an ever increasing rate.  Deciding where that sustainable steady state is going to be will be very difficult because of different agendas from practically everyone involved. e.g. Brazil might have a different idea as to what percentage of their rainforest should stay in its natural state as me. However I think it is something worth pursuing otherwise you are just arguing about which order species go extinct in. 

    Thor Russell
    Bonny Bonobo alias Brat
    Great points Thor.
    My article about researchers identifying a potential blue green algae cause & L-Serine treatment for Lou Gehrig's ALS, MND, Parkinsons & Alzheimers is at http://www.science20.com/forums/medicine
    Thor Russell
    Thanks
    Thor Russell
    Holly, this is really the most critical issue of our era. How do we become a sustainable civilization. Everything you wrote is on the money (literally and figuratively). I would add, however, that because we are already in overshoot, continued economic growth to meet the needs of a growing population is not sustainable and not possible. So at this stage we will just have to buck up and divide the pie into more, smaller slices. That's why it's important we end population growth as quickly as possible (humanely and voluntarily).

    I am particularly impressed with your observation of the messaging we get every day, that keeps us programmed to believe "economic growth good, stagnation bad." That's one of the things I am committed to rectifying.

    All the best,

    Dave Gardner
    Director of the documentary
    GrowthBusters: Hooked on Growth
    www.growthbusters.org

    Before I begin, I should say that you nailed my confirmation biases.

    I'm haven't studied enough psychology to define this properly, but it seems that the human parasite, which we are, has evolved to compete. We compete in almost every imaginable way in almost every imaginable field. The need to be the strongest, most agile, richest, most handsome, possessor of the most toys, and so on, drives much of our social system.

    Competition isn't limited to individual drives, either. In some contests smart competitors see the need for cooperation. But even within the team there is an undercurrent of competition. Who shall become the MVP or who will have her name as the lead investigator are drives within a cooperative. We all seem to have the innate desire to be the best.

    Consumer marketing has advanced as much as most any other study of the human condition. If you repeat an attractive package enough times, some will believe it. If the package is attractive enough, then millions will believe and consume. This holds with consumer goods as well as political or religious ideology. The package doesn't even need to be true, accurate, or even logical, if it is repeated often enough.

    That, I believe, is the 'how' in how we got to where we are today. Most thoughtful folks will admit that eternal growth doesn't make sense. So why, then, do we not only desire to keep up with the Jonses, but actually want to exceed them?

    Zero population growth is sometimes held up as a goal for reducing our growing demands on this planet we call home. I don't believe that will happen because we want it to. Involuntary controls are simply not acceptable. Voluntary controls will only affect a small subset of the population, and that set is not the one driving the growth. Now, if there should be some sort of external calamity, then the population could be forced back down to an acceptable level. I doubt that many would find that a happy solution.

    Even saying that a global calamity did occur, one which would eliminate, say, 50% of our current inventory of humans, we can't be sure that the same drives to compete will not start the race to doom all over again.

    In short, the upward spiral(s) will not flatten out and provide us with a sustainable future until the need to compete is eliminated from our collective persona. In my estimation, that ain't likely either.

    3 day weekends = instant 20% cut in human activity, and quality of life increase, and an opportunity for the currently unemployed or under paid

    Gerhard Adam
    I think you raise some good points, so I wanted to throw out a couple of points regarding economics to see the response.

    It is important to recognize that economics is not a science.  It is merely an attempt to describe an activity that humans have engaged in since they became human.  In other words, economics exists without economists.

    So, it becomes relevant to question what system is actually being described by economists?  In short, modern economic theory was born within a social system that was already mired in expansionism.  The idea that human social organization revolved around a particular city-state structure, hierarchical political leadership, etc. were all the ways in which the society was organized.  As a result, economic activity was interpreted with that as a backdrop.

    If you were to go to other cultures, especially more primitive ones, it would be absurd to talk with them about "growing an economy".  Despite the fact that many would have had trade amongst themselves or with other tribes, the idea that this represented the sum total of their existence would have been ridiculous on the face of it.

    This isn't to suggest some "return to nature" or "noble savage" kind of interpretation, but merely to point out that economics is not obligated to confine itself to communism, socialism, or capitalism.  People will engage in economic activities regardless of how anyone describes it.  It was people that shifted from barter to monetary systems; not economists.

    So, it is time to examine what we expect from our social system and how we expect it to behave, and then begin to address how we expect the flow of economic exchange and information to occur.  If we're really, really, lucky we might actually be able to influence things in that direction.

    The only thing that is certain is that our current system will not work for the long term.  Those that admire it the most are those that benefit the most, so their opinion is mostly worthless.  Others cling to it, in the hopes that they may get lucky and become one of the privileged.  However, the overwhelming majority of people are simply getting by and our current economic models, policies, and planning are a miserable failure to them.
    Mundus vult decipi
    Thor Russell
    Mostly agree, but will bring up "The only thing that is certain is that our current system will not work for the long term."While it may be the case that economists desperately want economic growth as measured by them, a country like Japan has had little to no economic growth (as measured conventionally) over the last decade or so and has a steadish population. So it hasn't all collapsed for them. Just because some economists apparently say growth is essential in our system doesn't mean it actually is. After all they are wrong about many things. However a country can have zero economic growth and steady population and still be very unsustainable e.g. Japan needs fossil fuels to function atm. 
    Thor Russell
    I don't disagree generally, but I think perpetual growth -is- necessary in the current system because of interest and lending.

    Good basic article. Your articulate. Comments are typical if a little wordy ( which I would expect for this site ) for the observation of our ( global predicament ) issues AKA using 1.5 planets for the 7B+ population.

    As we the readers of this blog are a rather small group, and there is no larger group with influence that will own this problem ( we all "own it", functional adults, not "our children" to whom we bequeath "the problem too" ) which you have expressed here. Statement of facts are good, they are however irrelevant to the major populations of the planet. Most of the planets residents "prays" for change, they do not see them selfs as that agent of change. Prayers are cheap & easy except for where they are forbidden and or taxed heavily.

    I would like to say thanks, it has been good knowing of you, I will get out your way now.

    Terence

    So how do you think growth or zero growth will apply as the work force is increasingly automated?

    I haven't seen an idea besides welfare that feeds millions or billions of displaced workers. Abundance maybe, but distribution?