Moving From a Failed Growth Economy to a Steady-State Economy

Abstract

A steady-state economy is incompatible with continuous growth, either positive or negative growth. The goal of a steady state is to sustain a constant, sufficient stock of real wealth and people for a long time. A downward spiral of negative growth — a depression — is a failed growth economy, not a steady-state economy. Halting downward spiral is necessary, but is not the same as resuming continuous positive growth. The growth economy now fails in two ways: (a) positive growth becomes uneconomic in our full-world economy; (b) negative growth, resulting from the bursting of financial bubbles inflated beyond physical limits, though temporarily necessary, soon becomes self-destructive. That leaves a non-growing or steady-state economy as the only long-run alternative. The level of physical wealth that the biosphere can sustain in a steady state is almost certainly below the present level. The fact that recent efforts at growth have resulted mainly in bubbles is evidence that this is so. Nevertheless, current policies all aim for the full reestablishment of the growth economy. No one denies that our problems would be easier to solve if we were richer. That rich is better than poor is a definitional truism. The question is, does growth any longer make us richer, or is it now making us poorer?