“We must do what we conceive to be the right thing and not bother our heads or burden our souls with whether we’re going to be successful.”
– E F Schumacher
In a previous post I discussed the scale of our economy. Economists have quite a bit to say about scale in microeconomics, or economics at the level of the household and the firm. They report the existence of a “when to stop rule.” This rule states that an activity should cease just as the costs begin to outweigh the benefits. An example might be deciding when to stop drinking bottles of beer. After about the third or fourth bottle, the costs begin to outweigh the benefits.
We could say that three bottles represent the “optimal scale” of beer consumption for an individual. Even though mainstream economists (dubbed neoclassical economists) readily apply this concept to the small-scale, micro-economy, they refuse to apply it to the big-picture, macro-economy. On the large scale, according to neoclassical theory, our economy as a whole has no optimal scale – just growth. And that’s an implausible conclusion, given that the macro-economy is simply a summation of all the micro-economies.
Ecological economics argues that everything has an optimal scale including big-picture activities and systems. It is hard to conceive of a more pressing place to apply the “when to stop rule” than the whole economy, because if we overreach our limits here, the entire ship goes down. A steady state economy strives to stop growth at the optimal point, maintaining a sustainable scale for the entire human enterprise.
When times get tough and cash becomes strapped, many turn to bartering – trading services and goods without the pesky dollar getting in the way. Not only does bartering and exchanging time strengthen the community, but it supports the local economy.
Bartering combined with local currencies or time banking can create a synergistic system that benefits businesses, increases value in local services and exchanges, and supports a stronger, more resilient economy. While the economic slump might be forcing more focus on these resources it is their inherit strengths that will keep them a part of the community long after the recession ends.
Creating a wage cap changes the focus – another common theme in our discussions. We have seen the destruction created in the wake of profit maximization policies all around our recession-laded land. Instead of constantly trying to make more money (phantomwealth), we can worry about more important issues:
“an executive’s performance has to be judged against achievements other than personal accumulation. So, instead of status derived from higher incomes, the desire to excel can instead be directed toward the social contribution and environmental performance of the bank or company involved.”
This does not remove the ability for you to receive promotions and bonuses, or further your career. It is a matter of scale – it is unjust for a CEO to make 500 times their entry level employee, they are not actually worth 500 other employees.
“Distribution of wealth is about how we divide up the economic pie, and it’s critically important for a steady state economy in which the pie is not growing. Economic growth has been used as an excuse to avoid dealing with poverty. Without growth, there are no more excuses. People who are too poor tend not to care about sustainability. If daily life is a struggle for basic needs, there’s not much time or energy to consider the future. On the flipside, people who are excessively wealthy tend to consume unsustainably.
A key policy for ensuring fair distribution of wealth is to establish a cap on personal income. Such a cap would eliminate the worst cases of conspicuous consumption and curb overall throughput of resources in the economy. An income cap would also prevent the social unrest that comes from huge gaps between the ‘haves’ and the ‘have nots.'” (Ecological Economics)
Membership is $25 ($15 for students) annually and benefits include:
The satisfaction of joining a social movement that supports environmental protection, ecological health, human well-being, and responsible consumption.
The Steady Stater, CASSE’s quarterly e-newsletter with stories about the steady state economy and updates on CASSE’s accomplishments.
Solidarity with others who recognize the trade-off between economic growth and more important goals for society.
A tax deduction to the full extent allowed by law for membership dues.
You also gain access to a wealth of information and community in all of CASSE’s Outreach Volunteers throughout the world. It also helps with the sleeping at night to know that you are helping to further a sustainable world for you children and grandchildren.
When social or environment costs become larger than the benefits of more production and consumption growth is no longer economic. As Daly and Farley put it in their textbook Ecological Economics uneconomic growth happens when continued growth “costs us more than it is worth. A situation in which further expansion entails lost ecosystem services that are worth more than the extra production benefits of the expanded economy.”
Sustainability is quite the buzzword nowadays. What is sustainability anyway? It would appear at face value to have a simple, easily understood meaning. On the contrary, almost everything labeled “sustainable” is not, creating ambiguity in the meaning of the concept. It has become more of a marketing tool than an actual process. Being sustainable is quite different from what is typically called sustainable in our culture currently.
Something is sustainable if it can maintain balance with the system supporting it, and can do so indefinitely. A sustainable process takes only the amount of resources that can be regenerated by its supporting system between each processing cycle. Waste generated by a sustainable process can be absorbed by the surrounding system at the same rate it is created. Sound familiar? On a large scale, that’s the steady state economy.