(False) myths about “steady-state” vs. “growth” economies

Just about every piece I read on the ongoing global economic meltdown makes “economic growth” the base line for collective economic health. Why? We don’t view a person who gets fatter and fatter as more and more healthy. We’re beginning to view with disdain those who “throw their weight around” by showcasing (or hiding) more and more bigger and bigger homes, and their attendant toys — ships, planes, horses, jewels, etc. In fact, the trillions raked in and hoarded by the 1% are beginning to disgust the 99% as utterly obscene.

Furthermore, we’re noticing how we are ruining our environment when we “extract” resources” from it, or discard what we, wrongly, consider “waste,” into it; we’re even beginning to recognize the analogy between cancer — the out-of-congrol growth of cells — with our out-of-control materialistic, dog-eat-dog, more-and-more-is-never-enough mentality. So what gives? Why are we still, as a civilization, still so addicted to that old shibboleth of “economic growth” as the measure of health?

In contrast to this prevailing view, and except for its (correct) worship of the sun as that which gives life in our solar system, permaculture views the earth and her atmosphere as a relatively closed, living system, a “steady-state economy,” if you will, wherein the number and types of exchanges that take place across species and boundaries of all kinds determine the stability and aliveness of that system. In a permacultural system, hierarchies of value do not exist; rather, everything feeds and receives from everything else, in multipolar, abundant profusion. Imagine if we allowed civilization to self-organize the way nature does? Imagine how we could free ourselves up!

Even though I see my work as “bridging above and below,” i.e., as including the infinitely mysterious living universe within all our considerations, it seems to me that until we do have real, evidential, palpable, contact with the surrounding cosmos, that we will be bound to the laws of thermodynamics as described in the final paragraph of the following article. Possibly, of course, ETs will let us know that those “laws” are local (else how would the ETs cross time and space to get here?). And in that case, permaculturists — and all of us — will need to expand its understanding of nature to include the cosmos.

Here are a bunch of myths that we’re still holding on to, without realizing it. With awareness, we will not only change our collective minds, we will act on that new knowledge.

Myths and Reality

Myths are interesting stories, and sometimes they even have a basis in fact. But when it comes to the economy, we can’t afford to make decisions based on “truthiness” and unexplored assumptions. Myths often contribute heavily to our perceptions of how the world works, so it’s necessary to debunk the myths swirling around economic growth and the steady state economy.


Myth

Economic growth is always desirable.

Reality

To determine whether economic growth is desirable requires us to examine its value objectively, without blindly assuming that all growth is worth pursuing. Growth comes with both benefits and costs. The goal is to grow the economy when the benefits are higher than the costs, and to have the wisdom to stop growing when the costs catch up. The economic laws of diminishing marginal utility and increasing marginal costs tell us that, over time, costs do catch up with benefits.


Myth

A steady state economy is the same thing as a depression or recession (the result of a failed growth economy).

Reality

A steady state economy is not a failed growth economy. An airplane is designed for forward motion. If it tries to hover, it crashes. It is not fruitful to conceive of a helicopter as an airplane that fails to move forward. It is a different thing designed to hover. Likewise a steady state economy is not designed to grow. Stability in a steady state economy is a healthy condition, a condition that allows people to meet their needs without undermining the life-support systems of the planet.


Myth

Technology and progress will grind to a halt in a steady state economy.

Reality

A strong incentive for technological progress exists in a steady state economy because of the drive for better goods and services. With stabilized material and energy inputs (as would occur in a steady state economy), technological progress becomes the main source of higher quality outputs.


Myth

Failure to grow causes economic turmoil and unemployment.

Reality

This myth is true for an economy structured for growth. When consumption slows in a growth economy, recession ensues. But a steady state economy is precisely and intentionally structured for stability. It’s the stability that provides a good life for citizens and eliminates turbulent boom and bust cycles.


Myth

A steady state economy means government by a harsh communist regime.

Reality

A steady state economy can exist in a constitutional democracy with a common-sense mixture of markets and market regulations. Market structures are employed to allocate resources efficiently, but some vital decisions (e.g., how big to grow) are kept outside the market. A steady state economy features a mix of private and public ownership of economic resources.


Myth

A steady state economy means widespread poverty.

Reality

Economic growth has not eradicated poverty. The condition of having a stable and sustainable population in a steady state economy allows more resources per person. The design of institutions to ensure fair distribution of wealth also provides an income/wealth floor below which no one can fall.


Myth

A steady state economy means fewer choices and less freedom.

Reality

In a steady state economy, citizens exercise as much freedom as possible without impinging on the freedom of others. Stable numbers of people consuming sustainable levels of resources means that each person has more freedom to pursue desired activities. Economic institutions are designed to respect ecological limits, but personal choice is maximized within that institutional framework.


Myth

We can grow the economy continuously because we can decouple growth from resource use and waste production.

Reality

We can achieve relative decoupling by reducing the ecological intensity per unit of economic output. But to have a sustainable economy, we would need to achieve absolute decoupling, a situation in which resource impacts decline overall. Even if we make great gains in relative decoupling, which we have over the last several decades, these gains can be entirely swamped by economic growth. For example, carbon dioxide emissions per unit of economic output have decreased. But growth in economic output has led to higher absolute emissions of carbon dioxide, despite increasing efficiency.


Myth

Technological progress will allow unlimited economic growth.

Reality

The laws of thermodynamics rule the economic production process, and they tell us that, regardless of technology, all production requires high-quality inputs and generates lower-quality outputs. Thermodynamic laws also tell us that we cannot achieve 100% efficiency. When the limits to efficiency have been reached, the only remaining way to grow the economy is by using more natural capital (including energy), which is limited in quantity. The application (or misapplication) of technology also plays a role – if technology isn’t aimed specifically at reducing the overall use of materials and energy, it won’t make any headway on that front.

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0 Responses to (False) myths about “steady-state” vs. “growth” economies

  1. Myth: Enlightened advanced beings understand the merits of steady state.

    Reality: Every specie of alien being we encounter seems to have designs on expanding their domain onto ours.

    • So we would call them all “invasive” species? If so, from a permacultural perspective, given enough time, the system (Earthlings and our cosmic visitors) would rebalance ourselves.

      Maybe it’s just that at least most of them want to connect, as is natural, rather than be artificially walled off.

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