Herman E. Daly: Steady-State Economics

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PLOWBOY: You became a kind of ecological economist.

DALY: Well, both words do come from the same Greek root: oikos, or household. Ecology means the study of the household—which, of course, is the entire planet Earth—and economics means the management of the household. So a union of the two fields is perfectly appropriate.

PLOWBOY: What did you do with this new-found synthesis?

DALY: Shortly after I returned to LSU from Yale, I edited my first book—an anthology of essays called Toward a Steady-State Economy—which tried to expose the basic fallacy of standard "growthmania" economics and point the way to a stable, long-term, steady-state economy. That book and my major work, Steady-State Economics, have been used in courses at over 100 colleges and universities from Stanford to MIT. But, I'm sorry to say, I think the books have had more influence on environmental studies programs than on the economics departments of such schools.

And the people I'm really trying to reach are my more orthodox colleagues . . . because the ecologists already know there's a problem with our pattern of ever-increasing growth. If I could only get some of the leading economists to look at the larger picture and become seriously interested in the possibilities of a stable, steady-state economy. . . .

PLOWBOY: Why is it so important to reach economists? How much influence can they have? After all, such financial theorists seem to spend much of their time contradicting each other!

DALY: That's true, there are all sorts of debates and divisions in orthodox economic circles. Consequently, most people have learned not to pay any attention when economists argue about financial issues like taxes or interest rates . . . and rightfully so.

But most economists do agree on the basic theory that the economy is a machine that continually needs to be fueled and made bigger. Furthermore, the majority of our world's governments use this mechanistic model to tackle all of their finance-related problems. Do you have poverty and unemployment? GROW to provide jobs and welfare revenues. Do you have inflation? GROW to increase the quantities of produced goods so prices will fall. Stuck with an unfavorable international balance of payments? GROW to increase exports. Got too much pollution? GROW so you'll be rich enough to afford cleaning up and discovering new technologies. Worried about war? GROW so you can have both guns and butter.

In fact, almost all of the nations on our planet are on a perpetual expansion kick. Indeed, economic growth is the most universally accepted goal in the world! Capitalists, communists, fascists, and socialists all strive to solve their problems by maximizing growth. And that fundamental belief—the concept that growth is a panacea—came right from the world's economists.

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