[R-G] [BillTottenWeblog] Towards a Steady-State Economy

[Bill Totten]

by Herman Daly

Posted by Nate Hagens

www.theoildrum.com (May 05 2008)


On theoildrum.com, we discuss the particulars of our energy 
supply/consumption situation. Less frequently do we have content 
outlining potential macro solutions that may be necessary to mitigate 
problems facing human systems. This is such a post - adapted from a 
paper from last week's Sustainable Development Commission written by 
Herman Daly, who popularized the term "Steady State Economy" over three 
decades ago. While it doesn't discuss energy per se, it does get at the 
heart of how we value and use energy - for growth - and the systems 
underlying this growth.

It is doubtful we can adequately inform energy policy without addressing 
the linkages between equity, the environment, finance, and our end 
goals. I post this on theoildrum not only because Herman is one of my 
tribal elders but because his eloquence, courage and foresight on these 
issues have historically been, and continue to be, ahead of the curve. 
During his resignation speech from the World Bank, Herman recommended 
the Bank take "a few antacids and laxatives to cure the combination of 
managerial flatulence and organizational constipation giving rise to 
such a high-pressure internal environment". To improve interactions with 
the external world he prescribed "new eyeglasses and a hearing aid".

Nearly fifteen years later, here is Professor Daly's current synopsis of 
the state of economics and his prescriptions for change.


A Steady-State Economy

Sustainable Development Commission, UK (April 24 2008)

A failed growth economy and a steady-state economy {1} are not the same 
thing; they are the very different alternatives we face. The Earth as a 
whole is approximately a steady state. Neither the surface nor the mass 
of the earth is growing or shrinking; the inflow of radiant energy to 
the Earth is equal to the outflow; and material imports from space are 
roughly equal to exports (both negligible). None of this means that the 
earth is static - a great deal of qualitative change can happen inside a 
steady state, and certainly has happened on Earth. The most important 
change in recent times has been the enormous growth of one subsystem of 
the Earth, namely the economy, relative to the total system, the 
ecosphere. This huge shift from an "empty" to a "full" world is truly 
"something new under the sun" {2} as historian J R McNeil calls it in 
his book of that title. The closer the economy approaches the scale of 
the whole Earth the more it will have to conform to the physical 
behavior mode of the Earth. That behavior mode is a steady state - a 
system that permits qualitative development but not aggregate 
quantitative growth. Growth is more of the same stuff; development is 
the same amount of better stuff (or at least different stuff). The 
remaining natural world no longer is able to provide the sources and 
sinks for the metabolic throughput necessary to sustain the existing 
oversized economy - much less a growing one.

Economists have focused too much on the economy's circulatory system and 
have neglected to study its digestive tract. Throughput {3} growth means 
pushing more of the same food through an ever larger digestive tract; 
development means eating better food and digesting it more thoroughly. 
Clearly the economy must conform to the rules of a steady state - seek 
qualitative development, but stop aggregate quantitative growth. GDP 
increase conflates these two very different things.

We have lived for 200 years in a growth economy {4}. That makes it hard 
to imagine what a steady-state economy would be like, even though for 
most of our history mankind has lived in an economy in which annual 
growth was negligible. Some think a steady-state economy would mean 
freezing in the dark under communist tyranny. Some say that huge 
improvements in technology (energy efficiency, recycling) are so easy 
that it will make the adjustment both profitable and fun.

Regardless of whether it will be hard or easy we have to attempt a 
steady-state economy because we cannot continue growing, and in fact 
so-called "economic" growth already has become uneconomic. The growth 
economy is failing. In other words, the quantitative expansion of the 
economic subsystem increases environmental and social costs faster than 
production benefits, making us poorer not richer, at least in high 
consumption countries. Given the laws of diminishing marginal utility 
{5} and increasing marginal costs {6} this should not have been 
unexpected. And even new technology sometimes makes it worse. For 
example, tetraethyl lead {7} provided the benefit of reducing engine 
knock, but at the cost spreading a toxic heavy metal into the biosphere; 
chlorofluorocarbons {8] gave us the benefit of a nontoxic propellant and 
refrigerant, but at the cost of creating a hole in the ozone layer and a 
resulting increase in ultraviolet radiation. It is hard to know for sure 
that growth now increases costs faster than benefits since we do not 
bother to separate costs from benefits in our national accounts. Instead 
we lump them together as "activity" in the calculation of GDP.

Ecological economists have offered empirical evidence that growth is 
already uneconomic {9} in high consumption countries (see ISEW, GPI, 
Ecological Footprint {10}, Happy Planet Index {11}). Since neoclassical 
economists are unable to demonstrate that growth, either in throughput 
or GDP, is currently making us better off rather than worse off, it is 
blind arrogance on their part to continue preaching aggregate growth as 
the solution to our problems. Yes, most of our problems (poverty, 
unemployment, environmental degradation) would be easier to solve if we 
were richer - that is not the issue. The issue is: Does growth in GDP 
any longer really make us richer? Or is it now making us poorer?

For poor countries GDP growth still increases welfare, at least if 
reasonably distributed. The question is, What is the best thing for rich 
countries to do to help the poor countries? The World Bank's answer is 
that the rich should continue to grow as rapidly as possible to provide 
markets for the poor and to accumulate capital to invest in poor 
countries. The steady state answer is that the rich should reduce their 
throughput growth to free up resources and ecological space for use by 
the poor, while focusing their domestic efforts on development, 
technical and social improvements, that can be freely shared with poor 
countries.

The classical steady state takes the biophysical dimensions - 
population and capital stock (all durable producer and consumer goods) - 
  as given and adapts technology and tastes to these objective 
conditions. The neoclassical "steady state" (proportional growth of 
capital stock and population) takes tastes and technology as given and 
adapts by growth in biophysical dimensions, since it considers wants as 
unlimited, and technology as powerful enough to make the world 
effectively infinite. At a more profound level the classical view is 
that man is a creature who must ultimately adapt to the limits 
(finitude, entropy, ecological interdependence) of the Creation of which 
he is a part. The neoclassical view is that man, the creator, will 
surpass all limits and remake Creation to suit his subjective 
individualistic preferences, which are considered the root of all value. 
In the end economics is religion.

Accepting the necessity of a steady-state economy, along with John 
Stuart Mill and the other classical economists, let us imagine what it 
might look like. First a caution - a steady-state economy is not a 
failed growth economy. An airplane is designed for forward motion. If it 
tries to hover it crashes. It is not fruitful to conceive of a 
helicopter as an airplane that fails to move forward. It is a different 
thing designed to hover. Likewise a steady-state economy is not designed 
to grow.

Following Mill we might define a steady-state economy as an economy with 
constant population and constant stock of capital, maintained by a low 
rate of throughput that is within the regenerative and assimilative 
capacities of the ecosystem. This means low birth equal to low death 
rates, and low production equal to low depreciation rates. Low 
throughput means high life expectancy for people and high durability for 
goods. Alternatively, and more operationally, we might define the 
steady-state economy in terms of a constant flow of throughput at a 
sustainable (low) level, with population and capital stock free to 
adjust to whatever size can be maintained by the constant throughput 
that begins with depletion of low-entropy resources and ends with 
pollution by high-entropy wastes.

How could we limit throughput, and thus indirectly limit stocks of 
capital and people in a steady-state economy? Since depletion is 
spatially more concentrated than pollution the main controls should be 
at the depletion or input end. Raising resource prices at the depletion 
end will indirectly limit pollution, and force greater efficiency at all 
upstream stages of production. A cap-auction-trade system for depletion 
of basic resources, especially fossil fuels, could accomplish a lot, as 
could ecological tax reform, about which more later.

If we must stop aggregate growth because it is uneconomic, then how do 
we deal with poverty in the steady-state economy? The simple answer is 
by redistribution - by limits to the range of permissible inequality, by 
a minimum income and a maximum income. What is the proper range of 
inequality - one that rewards real differences and contributions rather 
than just multiplying privilege? Plato thought it was a factor of four. 
Universities, civil services and the military seem to manage with a 
factor of ten to twenty. In the US corporate sector it is over 500. As a 
first step could we not try to lower the overall range to a factor of, 
say, one hundred? Remember, we are no longer trying to provide massive 
incentives to stimulate (uneconomic) growth! Also, since we are not 
trying to stimulate aggregate growth, we no longer need to spend 
billions on advertising. Instead of treating advertising as a 
tax-deductible cost of production we should tax it heavily as a public 
nuisance. If economists really believe that the consumer is sovereign 
then she should be obeyed rather than manipulated, cajoled, badgered, 
and lied to.

Free trade would not be feasible for a steady-state economy, since its 
producers would necessarily count many costs to the environment and the 
future that foreign firms located in growth economies are allowed to 
ignore. The foreign firms would win in competition, not because they 
were more efficient, but simply because they did not pay the cost of 
sustainability. Regulated international trade under rules that 
compensated for these differences (compensating tariffs) could exist, as 
could "free trade" among nations that were equally committed to 
sustainability in their domestic cost accounting. One might expect the 
IMF, the World Bank, and the WTO to be working toward such regulations. 
Instead they vigorously push both free trade and free capital mobility 
(that is, deregulation of international commerce). Protecting an 
efficient national policy of cost internalization is very different from 
protecting an inefficient firm.

The case for guaranteed mutual benefit in international trade, and hence 
the reason for leaving it "free", is based on Ricardo's comparative 
advantage {12} argument. A country is supposed to produce the goods that 
it can produce more cheaply relative to other goods, than is the case in 
other countries. By specializing according to their comparative 
advantage both trading partners gain, regardless of absolute costs (one 
country could produce all goods more cheaply, but it would still benefit 
by specializing in what it produced relatively more cheaply and trading 
for other goods). This is logical, but like all logical arguments 
comparative advantage is based on premises. The key premise is that 
while capital (and other factors) moves freely between industries within 
a nation, it does not move between nations. If capital could move abroad 
it would have no reason to be content with a mere comparative advantage 
at home, but would seek absolute advantage - the absolutely lowest cost 
of production anywhere in the world. Why not? With free trade the 
product could be sold anywhere in the world, including the nation the 
capital just left. While there are certainly global gains from trade 
under absolute advantage there is no guarantee of mutual benefit. Some 
countries could lose.

Now comes the problem. The IMF preaches free trade based on comparative 
advantage, and has done so for a long time. More recently the IMF has 
started preaching the gospel of globalization, which, in addition to 
free trade, means free capital mobility internationally - exactly what 
comparative advantage forbids! When confronted with this contradiction 
the IMF waves its hands, suggests that you might be a xenophobe, and 
changes the subject.

The IMF-WB-WTO (Washington Consensus) contradict themselves in service 
to the interests of transnational corporations. International capital 
mobility, coupled with free trade, allows corporations to escape from 
national regulation in the public interest, playing one nation off 
against another. Since there is no global government they are in effect 
uncontrolled. The nearest thing we have to a global government 
(IMF-WB-WTO) has shown no interest in regulating transnational capital 
for the common good. Their goal is to help these corporations grow, 
because growth is presumed good for all - end of story. If the IMF 
wanted to limit international capital mobility to keep the world safe 
for comparative advantage, there are several things they could do. They 
could promote minimum residence times for foreign investment to limit 
capital flight and speculation, and they could propose a small tax on 
all foreign exchange transactions (Tobin tax). Most of all they could 
revive Keynes' proposal for an international multilateral clearing union 
that would directly penalize persistent imbalances in current account 
(both deficit and surplus), and thereby indirectly promote balance in 
the compensating capital account, reducing international capital movements.

One problem for the steady-state economy already raised by the 
demographic transition to a non growing population is that it 
necessarily results in an increase in the average age of the population 
- more retirees relative to workers. Adjustment requires either higher 
taxes, older retirement age, or reduced retirement pensions. The system 
is hardly in "crisis", but these adjustments are surely needed to 
achieve sustainability. For many countries net immigration has become a 
larger source of population growth than natural increase. Immigration 
may temporarily ease the age structure problem, but the steady-state 
population requires that births plus in-migrants equal deaths plus 
out-migrants. It is hard to say which is more politically incorrect, 
birth limits or immigration limits? Many prefer denial of arithmetic to 
facing either one.

The steady-state economy will also require a "demographic transition" in 
populations of products towards longer-lived, more durable goods, 
maintained by lower rates of throughput. A population of 1000 cars that 
last ten years requires new production of 100 cars per year. If more 
durable cars are made to last twenty years then we need new production 
of only fifty cars per year. To see the latter as in improvement 
requires a change in perspective from emphasizing production as benefit 
to emphasizing production as a cost of maintenance. Consider that if we 
can maintain 1000 cars and the transportation services thereof by 
replacing only fifty cars per year rather than 100 we are surely better 
off - the same capital stock yielding the same service with half the 
throughput. Yet the idea that production is a maintenance cost to be 
minimized is strange to most economists. Shifting taxes from value added 
to throughput would promote this minimizing effort. One adaptation in 
this direction is the service contract that leases the service of 
equipment (ranging from carpets to copying machines), which the 
lessor/owner maintains, reclaims, and recycles at the end of its useful 
life.

Although the main thrust of reforms for the steady-state economy is to 
bring newly scarce and truly rival natural capital and services under 
the market discipline, we should not overlook the opposite problem, 
namely, freeing truly non rival goods from their artificial enclosure by 
the market. There are some goods that are by nature non-rival {13}, and 
should be freed from illegitimate enclosure by the price system. I refer 
especially to knowledge. Knowledge, unlike throughput, is not divided in 
the sharing, but multiplied. Once knowledge exists, the opportunity cost 
of sharing it is zero and its allocative price should be zero. 
International development aid should more and more take the form of 
freely and actively shared knowledge, along with small grants, and less 
and less the form of large interest-bearing loans. Sharing knowledge 
costs little, does not create unrepayable debts, and it increases the 
productivity of the truly rival and scarce factors of production. 
Existing knowledge is the most important input to the production of new 
knowledge, and keeping it artificially scarce and expensive is perverse. 
Patent monopolies (aka "intellectual property rights") should be given 
for fewer "inventions", and for fewer years.

What would happen to the interest rate in a steady-state economy? Would 
it not fall to zero without growth? Not likely, because capital would 
still be scarce, there would still be a positive time preference, and 
the value of total production may still increase without growth in 
physical throughput - as a result of qualitative development. Investment 
in qualitative improvement may yield a value increase out of which 
interest could be paid. However, the productivity of capital would 
surely be less without throughput growth, so one would expect low 
interest rates in a steady-state economy, though not a zero rate.

Would it be possible to have qualitative improvement (for example 
increasing efficiency) forever, resulting in GDP growth forever? GDP 
would become ever less material-intensive. Environmentalists would be 
happy because throughput is not growing; economists would be happy 
because GDP is growing. I think this should be pushed as far as it will 
go, but how far is that likely to be? Consider that sectors of the 
economy generally thought to be more qualitative, such as information 
technology, turn out on closer inspection to have a substantial physical 
base, including a number of toxic metals.

Also, if expansion is to be mainly for the sake of the poor it must be 
comprised of goods the poor need - clothing, shelter, and food on the 
plate, not ten thousand recipes on the Internet. In addition, as a 
larger proportion of GDP becomes less material-intensive, the terms of 
trade between more and less material-intensive goods will move against 
the less material-intensive, limiting incentive to produce them. Even 
providers of information services spend most of their income on cars, 
houses, and trips, rather than the immaterial product of other symbol 
manipulators.

Can a steady-state economy maintain full employment? A tough question, 
but in fairness one must also ask if full employment is achievable in a 
growth economy driven by free trade, off-shoring practices, easy 
immigration of cheap labor, and widespread automation? In a steady-state 
economy maintenance and repair become more important. Being more labor 
intensive than new production and relatively protected from off-shoring, 
these services may provide more employment. Yet a more radical 
rethinking of how people earn income may be required. If automation and 
off-shoring of jobs increase profits but not wages, then the principle 
of distributing income through jobs becomes less tenable. A practical 
solution (in addition to slowing automation and off-shoring) may be to 
have wider participation in the ownership of businesses, so that 
individuals earn income through their share of the business instead of 
through fulltime employment. Also the gains from technical progress 
should be taken in the form of more leisure rather than more production 
- a long expected but under-realized possibility.

What sort of tax system would best fit a steady-state economy? 
Ecological tax reform, already mentioned, suggests shifting the tax base 
away from value added (income earned by labor and capital), and on to 
"that to which value is added", namely the throughput flow, preferably 
at the depletion end (at the mine-mouth or well-head, the point of 
"severance" from the ground). Many states have severance taxes. Taxing 
the origin and narrowest point in the throughput flow induces more 
efficient resource use in production as well as consumption, and 
facilitates monitoring and collection. Taxing what we want less of 
(depletion and pollution), and ceasing to tax what we want more of 
(income, value added) would seem reasonable - as the bumper sticker puts 
it, "tax bads, not goods". The shift could be revenue neutral and 
gradual. Begin for example by forgoing $x revenue from the worst income 
tax we have. Simultaneously collect $x from the best resource severance 
tax we could devise. Next period get rid of the second worst income tax, 
and substitute the second best resource tax, et cetera. Such a policy 
would raise resource prices and induce efficiency in resource use. The 
regressivity of such a consumption tax could be offset by spending the 
proceeds progressively, by the limited range of inequality already 
mentioned, and by the fact that the mafia and other former income tax 
cheaters would have to pay it. Cap-auction–trade systems will also 
increase government revenue, and auction revenue can be distributed 
progressively.

Could a steady-state economy support the enormous superstructure of 
finance built around future growth expectations? Probably not, since 
interest rates and growth rates would be low. Investment would be mainly 
for replacement and qualitative improvement. There would likely be a 
healthy shrinkage of the enormous pyramid of debt that is precariously 
balanced atop the real economy, threatening to crash. Additionally the 
steady-state economy could benefit from a move away from our fractional 
reserve banking system toward 100% reserve requirements.

One hundred percent reserves would put our money supply back under the 
control of the government rather than the private banking sector. Money 
would be a true public utility, rather than the by-product of commercial 
lending and borrowing in pursuit of growth. Under the existing 
fractional reserve system the money supply expands during a boom, and 
contracts during a slump, reinforcing the cyclical tendency of the 
economy. The profit (seigniorage) from creating (at negligible cost) and 
being the first to spend new money and receive its full exchange value, 
would accrue to the public rather than the private sector. The reserve 
requirement, something the Central Bank manipulates anyway, could be 
raised from current very low levels gradually to 100%. Commercial banks 
would make their income by financial intermediation (lending savers' 
money for them) as well as by service charges on checking accounts, 
rather than by lending at interest money they create out of nothing. 
Lending only money that has actually been saved by someone reestablishes 
the classical balance between abstinence and investment. This extra 
discipline in lending and borrowing likely would prevent such debacles 
as the current "sub-prime mortgage" crisis. 100% reserves would both 
stabilize the economy and slow down the Ponzi-like credit leveraging.

A steady-state economy should not have a system of national income 
accounts, GDP, in which nothing is ever subtracted. Ideally we should 
have two accounts, one that measures the benefits of physical growth in 
scale, and one that measures the costs of that growth. Our policy should 
be to stop growing where marginal costs equal marginal benefits. Or if 
we want to maintain the single national income concept we should adopt 
Nobel laureate economist J R Hicks' concept of income, namely, the 
maximum amount that a community can consume in a year, and still be able 
to produce and consume the same amount next year. In other words, income 
is the maximum that can be consumed while keeping productive capacity 
(capital) intact. Any consumption of capital, manmade or natural, must 
be subtracted in the calculation of income. Also we must stop the 
asymmetry of adding to GDP the production of anti-bads without first 
having subtracted the generation of the bads that made the anti-bads 
necessary. Note that Hicks' conception of income is sustainable by 
definition. National accounts in a sustainable economy should try to 
approximate Hicksian income and abandon GDP. Correcting GDP to measure 
income is less ambitious than converting it into a measure of welfare, 
discussed earlier.

The logic of the steady-state economy is reinforced by the recent 
finding of economists and psychologists that the correlation between 
absolute income and happiness extends only up to some threshold of 
"sufficiency", and beyond that point only relative income influences 
self-evaluated happiness. This result seems to hold both for 
cross-section data (comparing rich to poor countries at a given date), 
and for time series (comparing a single country before and after 
significant growth in income). Growth cannot increase everyone's 
relative income. The welfare gain of people whose relative income 
increases as a result of further growth would be offset by the loss of 
others whose relative income falls. And if everyone's income increases 
proportionally, no one's relative income would rise and no one would 
feel happier. Growth becomes like an arms race in which the two sides 
cancel each other's gains. A happy corollary is that for societies that 
have reached sufficiency, moving to a steady-state economy may cost 
little in terms of forgone happiness. The "political impossibility" of a 
steady-state economy may be less than it previously appeared.

Nevertheless it is one thing to imagine the possibility of a 
steady-state economy, but something else to chart a transition thereto 
from a failed growth economy. Can one transform an airplane into a 
helicopter without first landing, or perhaps crashing? In order even to 
take such a task seriously one has to realize that the growth economy is 
heading for a big crash. Whether the measures suggested above are 
sufficient to convert the growth airplane to a steady-state helicopter 
is hard to say, but I do think they are probably necessary, and at a 
minimum would be useful guides for reconstruction after the crash. They 
also may prove capable of being applied gradually in mid air. For 
example, a cap-auction-trade system could begin with a generous cap 
followed by a gradual pre-announced schedule of tightening. The limits 
to income inequality could begin far apart, and be gradually tightened. 
Ecological tax reform could substitute at first only the worst value 
added taxes by the best throughput taxes, as mentioned earlier. 
Compensatory tariffs to protect national cost-internalization policies 
could be imposed and raised gradually. Reserve requirements for banks 
could be raised gradually to one hundred percent. Patent monopolies 
could be gradually reduced and knowledge gradually restored to its 
proper status as a non rival good. Downsizing of the IMF-WB- WTO from a 
servant of global integration in the interests of transnational 
capitalist growth to something closer to Keynes' nation-based 
multilateral clearing union for international payments - this would be 
more difficult to do gradually. But nations may begin individually to 
withdraw from these institutions as it becomes more evident that they 
have abandoned the federated internationalist nature of their Bretton 
Woods Charter in favor of an economically integrated globalist vision of 
capital-dominated growth, and are as yet incapable of conceiving the 
possibility, much less recognizing the reality, of uneconomic growth.

While these transitional policies will appear radical to many, it is 
worth remembering that, in addition to being amenable to gradual 
application, they are based on the conservative institutions of private 
property and decentralized market allocation. They simply recognize that 
private property loses its legitimacy if too unequally distributed, and 
that markets lose their legitimacy if prices do not tell the whole truth 
about costs. In addition, the macro-economy becomes an absurdity if its 
scale is structurally required to grow beyond the biophysical limits of 
the Earth. And well before that radical physical limit we are 
encountering the conservative economic limit in which extra costs of 
growth become greater than the extra benefits.

Ten Point Policy Summary

1. Cap-auction-trade systems for basic resources. Cap limits to 
biophysical scale according to source or sink constraint, whichever is 
more stringent. Auction captures scarcity rents for equitable 
redistribution. Trade allows efficient allocation to highest uses.

2. Ecological tax reform - shift tax base from value added (labor and 
capital) and on to "that to which value is added", namely the entropic 
throughput of resources extracted from nature (depletion), through the 
economy, and back to nature (pollution). Internalizes external costs as 
well as raises revenue more equitably. Prices the scarce but previously 
unpriced contribution of nature.

3. Limit the range of inequality in income distribution - a minimum 
income and a maximum income. Without aggregate growth poverty reduction 
requires redistribution. Complete equality is unfair; unlimited 
inequality is unfair. Seek fair limits to inequality.

4. Free up the length of the working day, week, and year - allow greater 
option for leisure or personal work. Full-time external employment for 
all is hard to provide without growth.

5. Re-regulate international commerce - move away from free trade, free 
capital mobility and globalization, adopt compensating tariffs to 
protect efficient national policies of cost internalization from 
standards-lowering competition from other countries.

6. Downgrade the IMF-WB-WTO to something like Keynes' plan for a 
multilateral payments clearing union, charging penalty rates on surplus 
as well as deficit balances - seek balance on current account, avoid 
large capital transfers and foreign debts.

7. Move to 100% reserve requirements instead of fractional reserve 
banking. Put control of money supply and seigniorage in hands of the 
government rather than private banks.

8. Enclose the remaining commons of rival natural capital in public 
trusts, and price it, while freeing from private enclosure and prices 
the non rival commonwealth of knowledge and information. Stop treating 
the scarce as if it were non scarce, and the non scarce as if it were 
scarce.

9. Stabilize population. Work toward a balance in which births plus 
in-migrants equals deaths plus out-migrants.

10. Reform national accounts - separate GDP into a cost account and a 
benefits account. Compare them at the margin, stop growing when marginal 
costs equal marginal benefits. Never add the two accounts.

Links:

1 http://www.eoearth.org/article/Steady_state_economy

2 http://www.wwnorton.com/catalog/spring01/032183.htm

3 http://www.sustainableeconomics.org/Vocabulary.htm#Throughput

4 
http://www.mkbergman.com/wp-content/themes/ai3/images/2006Posts/060727a_HistoricalGDPGrowth.gif

5 http://www.investopedia.com/terms/l/lawofdiminishingutility.asp

6 http://en.wikipedia.org/wiki/Marginal_cost

7 http://www.runet.edu/~wkovarik/ethylwar/

8 
http://en.wikipedia.org/wiki/Chlorofluorocarbon#Chloro_fluoro_compounds_.28CFC.2C_HCFC.29

9 http://en.wikipedia.org/wiki/Uneconomic_growth

10 http://en.wikipedia.org/wiki/Ecological_footprint

11 http://en.wikipedia.org/wiki/Happy_Planet_Index

12 http://en.wikipedia.org/wiki/Comparative_advantage

13 http://en.wikipedia.org/wiki/Rivalrous


Herman E Daly
School of Public Policy
University of Maryland
College Park, Maryland 20742 USA

http://www.theoildrum.com/node/3941


TO POST A COMMENT, OR TO READ COMMENTS POSTED BY OTHERS, please click
on the word "comment" highlighted at the end of the version of this
essay posted at http://billtotten.blogspot.com/