Planetary CFO attended talk on "how to stop funding fossil fuels" and got chatting about steady state economy
Yesterday, I participated in this online meeting and discussion. There were talks by Ben Caldecott and Anna Olerinyova, followed by Q and A. I found this a fascinating discussion.
There is one exchange in the chat that I’d like to follow up on.
At one point, another participant and I had a brief exchange about Steady State Economy, and they signposted a paper: “Another reason why a steady-state economy will not be a capitalist economy”, by Ted Trainer [University of New South Wales, Australia]
The central tenet of Trainer’s paper was to say that Herman Daly had said that capitalism could not exist in a steady state economy unless there was considerable decoupling of economic growth from material throughput. The following is a quote from the paper:
“... Daly’s case that a steady-state economy can remain capitalist depends entirely on the assumption that there is considerable scope for technical advance to enable productivity gains and decoupling, and for this to continue indefinitely”
Trainer seems to be arguing that steady state economics is not enough, and supports an alternative called The Simpler Way, and that might be why he has taken quite a negative view on the supposed inconsistencies between Daly’s steady state economics and capitalism:. From Trainer’s paper (I have emboldened the most relevant text):
“It should be evident from the above discussion that it is not sufficient merely to take a steady-state economy as the goal. When the seriousness of the limits to growth is understood, as the above multiples make clear, it is obvious that a sustainable and just society must have embraced large scale de-growth. That is, it must be based on per capita resource use rates that are a small fraction of those typical of rich countries today; it must in other words be some kind of Simpler Way. (For the detail see TSW: The Alternative.)”
I’ve found a different source (Wikipedia) that suggests that this is perhaps a rather extreme interpretation of what Daly actually believes (or, at least, believed in 1980) – in which I’ve emboldened the most relevant text:
“Fully aware of the massive growth dynamics of capitalism, Herman Daly on his part poses the rhetorical question whether his concept of a steady-state economy is essentially capitalistic or socialistic. He provides the following answer (written in 1980):’The growth versus steady-state debate really cuts across the old left-right rift, and we should resist any attempt to identify either growth or steady-state with either left or right, for two reasons. First, it will impose a logical distortion on the issue. Second, it will obscure the emergence of a third way, which might form a future synthesis of socialism and capitalism into a steady-state economy and eventually into a fully just and sustainable society’. Daly concludes by inviting all (most) people — both liberal supporters of, and radical critics of, capitalism — to join him in his effort to develop a steady-state economy.”
Thought this might be useful as a counter, from Herman Daly himself, to what Trainer claims about him.
The Planetary CFO - working towards a sustainable World Balance Sheet.