« Back to Home Page

Sign up for the 3p daily dispatch:

Steady-State Economy: Are we closer than we think?

Presidio Economics | Wednesday May 4th, 2011 | 5 Comments

This post is part of a blogging series by economics students at the Presidio Graduate School’s MBA program. You can follow along here.

By Ilana Lipsett

With consistently high unemployment and an on-again, off-again recovery, the political buzzwords these days are jobs and growth. But when we are fueling that economic growth by using up the earth’s resources 1.5 times faster than it can regenerate them, it seems high time to reconsider why we believe unbridled growth is such a good thing. Ecological economists have been pushing this point for some time now, urging movement towards a steady-state economy (SSE), one in which we aim for relatively stable population and physical capital levels, as a means to becoming more sustainable.

Critics will liken SSE to the final nail in the coffin of our society as we know it. I will leave others to argue the merits and feasibility of population control, and admit that at first glance, steady-state theories seem to be non-starters in our hyper-consumerist culture where our national well-being is measured by GDP. But a funny thing happened while our politicians were scouring charts and numbers looking for signs of renewed growth: forced by the recession to re-evaluate their spending habits, people gradually, and organically, started taking baby steps towards a steady-state economy.

Out of necessity more than anything else, people have begun to realize that bigger – and more – isn’t better. With less money to spend, people have had to re-evaluate their priorities and supposed need for the latest gadget.

Results from a 2010 New York Times/CBS poll, echoed by a Department of Labor survey, found about half of Americans are spending less money buying stuff, and spending more time on activities with family and friends. As we rethink how we spend, the environment benefits too.

When people do buy, they are doing it differently: collaborative consumption is on the rise, named a top 10 green trend by time.com. Veteran websites like Craigslist or Freecycle have for years provided free and informal online marketplaces for buyers, sellers and barterers. The proliferation of new and somewhat niche websites reflect a growing desire to participate in this less formal economy, one that involves bartering (swap.com), trading (thredup.com), and even profiting (rentalic.com).

These sites show that not only is there demand for these online platforms and informal markets, but that steps towards a steady-state economy can happen without government intervention. SSE does not preclude economic activity: it encourages it to happen in a more sustainable way. We’ve been pushing up against, if not exceeding the limits of our ecosystem for too long, driven in part by our addiction to overconsumption. Now that we’ve also reached the limits of our struggling bank accounts, buying a secondhand lawnmower, or better yet, renting one, seems like a much more attractive choice than buying a brand new one that will mostly gather dust on the days we aren’t using it.

As we continue to wean ourselves off of our consumption obsession, can adhering to steady-state theories fix our current economic woes? There is no question that people need jobs, and by emphasizing experience-based, and not consumption-based, sectors, we can create more demand for employment. In doing so, we will be happier, and so will Mother Earth. Oil shortages in the 1970’s changed American driving habits, but as soon as prices went down, we were back to our old ways. Have we learned our lesson this time? Once we are in a stronger position economically, will our experiments with SSE become standard ways of living?


▼▼▼      5 Comments     ▼▼▼

Newsletter Signup
  • http://www.steadystate.org Brian Czech

    Nice article. Readers are encouraged to support the steady state economy as a policy goal at:

    http://steadystate.org/sign-the-position/

    Brian Czech, President
    Center for the Advancement of the Steady State Economy

  • Del Ray

    MBA student – I think you left out the numbers. There is power in numbers, and weakness in your story without.

  • Cole Thompson

    I like the idea of moving toward experience-based, rather than consumption-based, jobs and economic activity. I do think I see signs of that taking place.

    I’ve studied economics as a student and as a hobby for decades, and quite honestly, steady state economic theory is the only economic paradigm that holds up under close inspection. Herman Daly’s writings on SSE, and the very accessible tutorials on SSE at steadystate.org are highly recommended for anyone.

  • http://steadystaterevolution.org Joshua Nelson

    The numbers are important. What are the big ones that matter?

    Middle-class Americans are making 18% less than they were a decade ago. The gap between the top 1% and bottom 99% has grown steadily every year, with the top 1% holding 25% of the income and 40% of the wealth – this wealth inequality wrecks havoc to our society (read The Spirit Level if you want proof).

    Our well-being and happiness flatlined sometime in the 70s while GDP continued to grow. Today we’re starting to see the statistics for well-being and happiness go down.

    We’re using 1.5 times the Earth’s capacity – eating into the savings instead of living off the interest (thereby making the interest smaller every year, as well).

    A stable climate close to the one that life on this planet is suited for can only be found below 350ppm CO2 and we’re currently at 393ppm, steadily climbing to over 400ppm by the end of the year.

    All of this is directly linked to economic growth. None of it can be unlinked, or decoupled, from that growth either. It is both historically and physically impossible – read Tim Jackson’s Prosperity Without Growth and consult the laws of thermodynamics if you don’t believe me. Anyone who says otherwise believes is mysticism.

    So, the numbers tell us that continued growth in the wealthy, high-consuming nations is doing many things:

    1. Eating away at our social fabric and well-being,
    2. Consuming more resources than can be replenished,
    3. Altering the climate in drastic ways, on the only planet we have to support us, and
    4. Is completely, utterly unsustainable.

    You can choose to not buy those facts, but it won’t change the truth or the outcome. Because it is physically impossible for us to continue to grow for much longer, we will be forced into a steady state economy by laws of nature if we don’t actively chose to transition to one. I prefer the latter, not the former.

    We can actively make our lives better, our planet and ourselves healthier, and transition to a dynamic, sustainable, post growth society. Join the rest of us that are campaigning to do so

    Cheers,
    Joshua
    steadystaterevolution.org
    postgrowth.org
    steadystate.org

  • http://steadystaterevolution.org Joshua Nelson

    The numbers are important. What are the big ones that matter?

    Middle-class Americans are making 18% less than they were a decade ago. The gap between the top 1% and bottom 99% has grown steadily every year, with the top 1% holding 25% of the income and 40% of the wealth – this wealth inequality wrecks havoc to our society (read The Spirit Level if you want proof).

    Our well-being and happiness flatlined sometime in the 70s while GDP continued to grow. Today we’re starting to see the statistics for well-being and happiness go down.

    We’re using 1.5 times the Earth’s capacity – eating into the savings instead of living off the interest (thereby making the interest smaller every year, as well).

    A stable climate close to the one that life on this planet is suited for can only be found below 350ppm CO2 and we’re currently at 393ppm, steadily climbing to over 400ppm by the end of the year.

    All of this is directly linked to economic growth. None of it can be unlinked, or decoupled, from that growth either. It is both historically and physically impossible – read Tim Jackson’s Prosperity Without Growth and consult the laws of thermodynamics if you don’t believe me. Anyone who says otherwise believes is mysticism.

    So, the numbers tell us that continued growth in the wealthy, high-consuming nations is doing many things:

    1. Eating away at our social fabric and well-being,
    2. Consuming more resources than can be replenished,
    3. Altering the climate in drastic ways, on the only planet we have to support us, and
    4. Is completely, utterly unsustainable.

    You can choose to not buy those facts, but it won’t change the truth or the outcome. Because it is physically impossible for us to continue to grow for much longer, we will be forced into a steady state economy by laws of nature if we don’t actively chose to transition to one. I prefer the latter, not the former.

    We can actively make our lives better, our planet and ourselves healthier, and transition to a dynamic, sustainable, post growth society. Join the rest of us that are campaigning to do so.

    Cheers,
    Joshua