Toward a new economic model

Abstract

Standard economics fails to ask the question of how large the economy should be allowed to grow question posed by steady-state economy the populations of people and of goods are maintained constant by low rate of activity. Birth rates equal death rates and production equals depreciation all at low levels so that people live long physical goods are durable and environmental depletion and pollution rates are low. Steady-state economics works to answer the question of economic growth in terms of scale of activity that is ecologically sustainable over the long term at level sufficient to provide good life for whatever population size can be accommodated under those conditions. Standard economics considers production and consumption primarily in relation to exchange. Its bias toward growth is reinforced by welfare criteria based on the supposed truism that more always is preferable to less. According to standard growth economics population growth is not major problem or is in fact beneficial as long as it is not too rapid thereby increasing the standard of living. If population like commodities is to be maintained in steady state there must be some notion of optimum population levels. Joseph Spengler defines such population as one in which a specified indicator of welfare is maximized. The standard can be specified as follows: maximize the cumulative number of lives ever to be lived over time at level of per capita resource use that is sufficient for good Sufficiency and sustainability are the dominant criteria. It is necessary to decide what range of incomes corresponds to sufficiency for good life. Malthus stated: There should be no more people in country than could enjoy glass of wine or piece of beef with their dinner. If any such definition of sufficiency were accepted as moral imperative for each national community other things would need to be adjusted to satisfy it. 3 possibilities for adjustment are: raise carrying capacity by means of technological advancement; give necessities priority over luxuries; and reduce the population. Steady-state economics recommends controlling both the production of goods and population once sufficiency has been realized. At this time neither optimum population nor optimum combinations of human and commodity population can be specified but the criteria of sustainability and sufficiency are important guidelines as are the principle of limited inequality and the goal of zero population growth. (EXCERPT)