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#629 - When Growth Stops -- Sustainable Development -- Pt. 6, 16-Dec-1998

Here we wrap up our discussion of sustainable development, based on the
excellent book BEYOND GROWTH by Herman Daly.[1]

Sustainable development means, first, setting physical limits on
the "throughput" of the human economy. Throughput means all the
materials and energy flowing through the economy -- all the things we
make and use, and all the energy required to do so. Another phrase
for "throughput" is "total consumption," which is total human
population multiplied by per-capita consumption.

The total throughput of the human economy must be kept small enough to
avoid exceeding two physical limits of the ecosystem: its capacity to
regenerate itself, and its capacity to absorb our wastes. Each year
now, scientists report new evidence that the human economy has exceeded
both of these ecosystem limits.

For example, nature creates (regenerates) new topsoil each year, but in
much of the world (particularly in the U.S.) humans are destroying
topsoil faster than nature can create it.[2] Loss of topsoil reduces
our future farming capacity in a fundamental way. Topsoil destroyed
today is topsoil taken from our children and grandchildren.

Pesticides provide an example of humans producing wastes faster than
nature can absorb them. If nature could absorb pesticide residues as
fast as humans created them, then there would be no buildup of toxic
residues. But there has been a measurable buildup of pesticides at the
north and south poles, at the bottom of the deepest oceans, in the
drinking water of much of the midwestern U.S., and in the breast milk
of women worldwide. We have clearly exceeded nature's capacity to
absorb pesticide wastes, thus denying our children their rightful share
of nature's detoxification capacity.

In sum, there really are "limits to growth" and we have already
exceeded some of those limits. This means that, at some point,
continued economic growth (growth of throughout) will create bads
faster than it creates goods (an economist would say "marginal costs
will exceed marginal benefits"). Daly (pg. 40) argues, for example,
that the U.S. chemical industry may have already passed the point at
which its toxic discharges are costing society more than the benefits
provided by its products. If this were the case, then society would
receive net benefits by shrinking the chemical industry instead of
promoting its growth.

Unfortunately, we have no way of measuring whether our economy has
passed the point at which costs have begun to exceed benefits because,
in our national accounting system (in which we measure "gross domestic
product"), we count all production of goods and services as "goods." In
tallying up gross domestic product (GDP) we never subtract any bads.
Chemicals are counted as goods and the products they allow us to make
are counted as goods. This makes sense. But when our chemical factories
produce chemical waste dumps that must be cleaned up at huge public
expense, those costs are counted as "goods" too, instead of being
subtracted as bads. If a few hundred or a few thousand children get
cancer from exposure to chemical wastes, their hospitalization, their
radiation treatments, their chemotherapy, and their funeral expenses
are all counted as "goods" in our total GDP. If their parents sue, all
the resulting court expenses are counted as goods, not bads. In sum,
the nation's brightest economists maintain our national accounting
system with a calculator that has a plus key but no minus key.[3]
Therefore we have no way of knowing whether the costs of economic
growth have exceeded the benefits. The nation's economists (and
politicians and business leaders) simply assume that if GDP is rising,
our standard of living is rising too. But, as the song goes, it ain't
necessarily so. (For substantial evidence on this point, see REHW #516.)

Historically, growth is an aberration; a steady state economy is the
norm. Only during the past 500 years has growth begun to seem like the
normal condition for human economies. The physical limits to growth
(which we are now perceiving because we have exceeded some of them)
require us to return to the steady state sooner or later. If we do so
by choice, we may be able to guide the process and achieve a steady-
state economy with a reasonable approximation of the "good life" for
most people, world without end.[4] On the other hand, if we continue to
blindly accept the ideology that growth is good, then natural limits
will reduce our numbers with an ecological meat axe and the suffering
will be immense.

Why do we have so much trouble imagining a no-growth economy?

Daly believes there is one central reason: because a steady-state
economy, one that is no longer physically growing, will force us to
confront the problem of inequality, which is another name for the
problem of poverty. So long as the total economic pie is growing we can
say, "The poor will be lifted out of poverty by growth, so we need not
take any special steps to alleviate their condition -- in fact we
hardly need to think about them at all because the market will take
care of them."

In a steady-state economy, we will have to decide what is a fair
distribution of the benefits of the economy because, in the steady
state, as the rich get richer the poor must get poorer. In this
situation, the only way to make sure that a fair share is available for
everyone (whatever society decides "a fair share" means) is to set a
limit on how much the powerful and the predatory can take for
themselves. Daly says simply, "In a steady state, if the rich get
richer the poor must get poorer, not only relatively but absolutely. If
the total [throughput of the economy] is limited there must be a
maximum limit on individual income."

Daly believes this is the key reason why we refuse to confront limits
to growth: we cling to the path of unsustainable growth so that we will
not have to think about limiting inequality. (pg. 215)

Daly argues that establishing the principle of limited inequality is a
necessary (but not sufficient) condition for achieving a modern steady
state. He argues that the precise range of inequality that we allow is
not as important as establishing the principle that inequality should
be limited.

If inequality is to be limited, this implies that there will be a
maximum allowable income and a minimum income. (These standards would
have to be developed within each society because needs are culturally
determined.) Daly argues (pg. 210) that the minimum income "would be
some culturally defined amount sufficient for food, clothing, shelter,
and basic health and education." The maximum income might be four times
as great as the minimum (which is what Plato advocated), or it could be
10 or 20 times as great. The exact number isn't terribly important. The
point is that there must be a limit on inequality -- the precise limit
can be worked out in practice. (The overarching goal would be to
provide sufficient incentive so that all necessary jobs are filled
voluntarily by qualified people.)

Daly argues that limiting inequality (in a steady-state economy) is a
way to achieve 3 things:

1) It is a way to keep the rich from leaning too heavily on the poor;

2) It is a way to keep the present generation from leaning too heavily
on future generations;

3) It is a way to prevent humans from "leaning too heavily on other
creatures whose habitats must disappear as we convert more and more of
the finite ecosystem into a source for raw materials, a sink for waste,
or living space for humans and warehouses for our artifacts."

In addition to the matter of fairness (the meaning of which each
society or culture must decide for itself), in a steady-state economy
we would need to limit inequality for another reason as well: to limit
total human consumption, which is total population multiplied by per-
capita consumption. It is total human consumption that stresses the
ecosystem.

Because total consumption has two parts (human numbers and per-capita
consumption), to limit total consumption, we would need to limit
inequality AND limit total human numbers. In a steady-state economy
(one whose total size is established by the Earth's limits), the more
people there are, the lower their average standard of living must be.
Controlling growth requires us to limit both human consumption AND
human population. Both limits are ESSENTIAL if we aim to control the
total size (throughput) of the global economy.

In recent decades we have invented several technological fixes aimed at
circumventing the natural limits of ecosystems, so that growth can
continue. The "green revolution" tried to speed up the growth rates of
the edible portions of wheat and rice plants[5] -- but these changes
were achieved at the expense of stability, resilience and resistance to
disease. The latest technical fix is genetically engineered crops. The
hidden costs of this latest agricultural gimmick have yet to be
measured, but we can be sure that they will become apparent as time
passes. Daly says, "It is for now certainly better for us to slow down
our own biological growth rate than to attempt to speed up the growth
rates of all the species we depend upon." (pg. 85)

It seems logical that we in the northern hemisphere must confront (and
achieve) the limits to growth first be-

Individual countries will find it more difficult to limit their
consumption as the "free trade" ideology is imposed on them by powerful
traders like the U.S. "Free trade" hides the ecological costs of
consumption. If Americans are doing the consuming but the related
ecological limits are being exceeded in Mexico or in Indonesia,
Americans can feel no incentive to reduce their consumption. Free trade
even makes it difficult to keep relevant accounts because benefits are
being enjoyed in one locale while costs are being created in another,
thousands of miles apart.

There is considerable evidence that free trade doctrines are increasing
inequalities within and between countries. As Herman Daly says (pg.
156), free trade will bring with it "a further writing off of the
laboring class in this country, an increasing disdain toward uneducated
and rural people by the corporate and university elite, and an
increasing devotion by the former to the one thing about themselves
that at least vaguely concerns the latter -- their growing arsenal of
guns."

Within countries, great inequality creates civil conflict. Between
countries, in a full world, high rates of consumption create
international conflict. To the extent that free trade makes nations
less able to control their rates of consumption, to that degree it will
promote war within and between countries. To promote peace, nations
need to become more self-sufficient and to consume less.

We have said before and we say again: We know of only one organization
committed to tackling every part of the "sustainable development"
problem: Sustainable America. We urge all our readers to join and
support Sustainable America. This is important. Please do it. Telephone
(212) 269-9550; fax (212) 269-9557; or www.sanetwork.org.

--Peter Montague (National Writers Union, UAW Local 1981/AFL-CIO)

=====

[1] Herman E. Daly, BEYOND GROWTH (Boston: Beacon Press, 1996). ISBN 0-
8070-4708-2.

[2] Gary Hardner, SHRINKING FIELDS: CROPLAND LOSS IN A WORLD OF EIGHT
BILLION (Washington, D.C.: Worldwatch Institute, 1996). ISBN 1-878071-
33-5. Worldwatch can be reached at 1776 Massachusetts Avenue,
Washington, D.C. 20036-1904. Telephone: (202) 452-1992; fax: (202) 296-
7365.

[3] Lincoln Anderson, "Gross Domestic Product," in David R. Henderson,
editor, THE FORTUNE ENCYCLOPEDIA OF ECONOMICS (New York: Warner Books,
1993), pgs. 203-207. ISBN 0-446-51637-6.

[4] Daly (cited above in note 1) never precisely defines the "good
life" but on pg. 14 he says, "...most would agree with [British
economist Thomas] Malthus that it should be such as to permit one to
have a glass of wine and a piece of meat with one's dinner. Even if one
is a teetotaler or a vegetarian that level of affluence is desirable,
and would serve by itself to rule out populations at or above today's
level."

[5] Vandana Shiva, STAYING ALIVE; WOMEN, ECOLOGY, AND DEVELOPMENT
(London, England, and Atlantic Highlands, New Jersey, USA: Zed Books,
1989). ISBN 0-86232-823-3.

Descriptor terms: sustsinable development; herman daly; economy;
inequality; poverty; growth; free trade;