The Steady-State Economy vs. "Growth"

[Gerald Iversen]

I was inspired by my recent interview with Brian Czech from the Center for the Advancement of the Steady-State Economy (CASSE). You can hear our conversation
at http://www.jubilee-economics.org/pod...-not-grow.html
He's the author of the recent book "Supply Shock."

Gerald 'Jerry' Iversen

[Rogar]

Thanks for the interesting interview. A steady state economy and simple living seem inextricably connected. The Limits to Growth was required reading for one of my economics courses back in the 70's. Even though none of the predictions for social, economic, or populations crashes came to be within the timeline I recall from the book, it still makes good sense to me. I can believe the we can prosper in a steady state, but I can't quite imagine convincing the managers of the nation's global corporations of that.

Sometimes I think mankind will get along as things are with the concept that growth is good, that science will continue to find ways to feed us and find alternate fuels. At least for those of us lucky to live in developed countries. But I can't see it having a good effect on the environment. I enjoyed the interview comments about the Sierra Club in that respect.

[bUU]

I can believe the we can prosper in a steady state, but I can't quite imagine convincing the managers of the nation's global corporations of that.

This is key: The way things are now, the growth economy can be imposed on all by its proponents; a steady-state economy can be scuttled almost unilaterally by its opponents.

[catherine]

Thanks for sharing this! I have a big interest in not only steady state, but de-growth, as proposed by Charles Eisenstein. However, steady state is a step in the right direction.

You are right, Rogar and bUU, that it's a tough sell. It's probably going to take something big (like a global fiscal catastrophe) to shake everyone off their belief system about what's best and what's normal.

What's NOT best and NOT normal is a system that depends upon raping the earth's resources and creating huge inequalities of wealth, with few people controlling the rest of us.

[bUU]

Yet, even a catastrophe is as likely as not to prompt the powerful to adopt even more rapacious approaches rather than less rapacious.

[catherine]

Yet, even a catastrophe is as likely as not to prompt the powerful to adopt even more rapacious approaches rather than less rapacious.

I can envision a science fiction book/movie where the world become divided: those who still believe in growth and greed live in one hemisphere and the other half find new ways go about life and business live in the other and then everybody's happy. Trouble is, that's an impossible scenario unless we could figure out a way to also segregate the water and air.

The thing that give me hope is that up until a few hundred years ago, people coexisted with nature. Of course, not all political systems throughout history have benefited all the populace, but some have. We have to somehow get back to the knowing that we are not separate from nature and each other. That belief in separation is the cause of this imbalance and exploitation.

This is a great movie by Tom Shadyac and part of it makes a case for the biology of connection among us. It's free and you can watch online. http://www.iamthedoc.com

[jp1]

The problem is that our economy has, since 1913, been set up to require growth because all the money in it is loaned into existence as interest bearing debt by the federal reserve. Without growth the holders of the debt have to default. A change to a steady state economy would require that the banks, who profit so extensively from the current system, be willing to allow a new system to be put in place. That isn't going to happen until the point when the current system collapses under its own weight.

[catherine]

The problem is that our economy has, since 1913, been set up to require growth because all the money in it is loaned into existence as interest bearing debt by the federal reserve. Without growth the holders of the debt have to default. A change to a steady state economy would require that the banks, who profit so extensively from the current system, be willing to allow a new system to be put in place. That isn't going to happen until the point when the current system collapses under its own weight.

That's only 100 years ago.. That doesn't make it immutable. The more people learn about alternatives, the stronger the web we'll have when the currently accepted way fails us. We don't have to resign ourselves to The World Is Flat. First step--educate ourselves and others.

[jp1]

Considering how fringe Ron Paul's calls to end the fed were considered I'd say it will be a difficult road. That said, I hope I'm wrong and that you' re right because the currently accepted way has already failed the vast majority of us.

[Rogar]

The problem is that our economy has, since 1913, been set up to require growth because all the money in it is loaned into existence as interest bearing debt by the federal reserve. Without growth the holders of the debt have to default. A change to a steady state economy would require that the banks, who profit so extensively from the current system, be willing to allow a new system to be put in place. That isn't going to happen until the point when the current system collapses under its own weight.

Interesting point. Loans to finance business operations have gone back way more than a hundred years. As I see it, a company has to make enough money to cover all of their expenses including cost of goods sold, operation expenses, and the cost of debt. The cost of debt is no different than the other expenses a company has to cover to survive. I'm not sure I see anything explicitly saying that companies have to grow, or even make a profit. What I see as the driver behind growth, at least for larger companies, is the return stockholders expect from their investments. Which usually translates into either current profits or anticipated future earnings. Even then, profits can either be re-invested into the company as growth, or returned to the shareholders as dividends. Although it is unusual, a company that returns all of its profits to the shareholder is not necessarily growing, but possibly just operating efficiently.

ETA: My father was a small business owner. He needed bank loans to replace worn out facilities, to finance inventory, or maybe a relocate from a declining neighborhood to a better one. For the most part his business was pretty much steady state with the same number of employees and the same facility requirements for the 40 years he was in business. He covered his debts and in good years he was able to withdraw more money from the business and there were bad years when he and my family lived on savings. My grandfather, who started the business, obviously had to grow from zero sales to a level to maintain operations. But repaying debt doesn't have to imply growth.