Development vs Growth

In a steady-state economy the focus is on development versus growth. As Herman Daly puts it, growth refers to “physical scale of the matter/energy throughput that sustains the economic activities of production and consumption of commodities.”  In other words, growth is the increasing of production and consumption of goods and services. This is a quantitative increase in scale. Development is a qualitative improvement of the same scale. A contained system (the Earth, for example) can develop inside but does not significantly grow. (Daly, Beyond Growth)

econecosystemWe live in a contained system, of which our economy is a large part of and, currently, the largest driving factor in changes within that system. In our system, we can choose to develop or “grow,” but our growth is limited by the constraints of that same system (e.g. Earth’s natural capital). If we change our focus to development, we will increase the quality of our lives (qualitative development) instead of the amount of production and consumption (quantitative growth).

As our system is right now, we are increasing the production and consumption, but decreasing the quality of our lives.

As we move into a steady-state economy, we will make choices that improve durability of goods and shift to more maintenance then production. There will still be production, to replace goods at the end of their life-cycle; a life-cycle that should be increased and improved as well (no more new computers every other year). We move away from quantity to quality.

Brian Czech and Herman Daly address this in their article for The Wildlife Society Bulletin, “In My Opinion: The steady state economy – what it is, entails, and connotes“:

“Nothing about a steady state economy precludes economic development… Various sectors may come and go in a steady state economy. For example, organic farms may supplant factory farms, the proportion of bicycles to Humvees may increase, and professional soccer may attract more fans while NASCAR attracts fewer. As long as the physical size of the economy remains constant in the long run, a developing economy is a steady state economy.

Nor would any type of cultural stagnation result from a steady state economy… an economy in which physical growth as no longer the goal would be more conducive to political, ethical, and spiritual improvements.”

As we continue to increase our development, we will push for longer live-spans and decreasing birth and death rates. We will have more time to enjoy our community, get outside (Americans currently spend 90% of their time indoors), and tackle the bigger problems of hunger, poverty, homelessness, and maybe even put an end to war.

I know, sounds like a lot to do for a “economic theory,” but just try to imagine a world were we actually focused on these issues instead of focusing on the bottom line. That is a beautiful world. That is a sustainable world. That is a Steady State.

Update August 25, 2009: In a recent article by James Gustave Speth, “Doing Business in a Postgrowth Society,” the author made some good distinctions between quantitative growth and qualitative development:

“It is abundantly clear that even in a postgrowth society, many things do need to grow, such as the number of good jobs; the incomes of the poor; the deployment of climate-friendly and other green technologies; the availability of health care; security against the risks of job displacement, old age, and disability; and investment in public infrastructure and environmental amenity. We need targeted government policies to address such objectives.

Of particular importance are policies that temper growth while improving social and environmental well-being—policies establishing, for instance, shorter workweeks and longer vacations; greater labor protections, job security, and benefits; restrictions on advertising; a new design for the twenty-first-century corporation, one that embraces rechartering and stakeholder primacy rather than shareholder primacy; rigorous environmental, health, and consumer protection; greater economic and social equality; heavy spending on public services; and initiatives to address population growth at home and abroad.”

13 thoughts on “Development vs Growth”

  1. Pingback: A Steady State
  2. Pingback: Uneconomic Growth
  3. How to convince our politicians, big business & general public that continual growth is sending us to ultimate disaster? The world has got to such a state that a steady state economy could mean increasing wealth for everyone if we address the population problem and enable people to gradually shrink it.
    Keep the pressure on guys!
    Rob from Wales, UK

  4. Today China is the fastest growing economy however the people’s standard of living does not commensurate the economic growth. Clearly there is a huge problem with focusing on growth and not development.

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