Article: Economics in a Full World
Author: Herman E. Daly
Growth is often seen as the solution to all of the major economic problems. Poverty? Just grow the economy by increasing the production of goods and stimulate consumer spending to get more money. Unemployment? Increase the demands for goods and services by lowering interest on loans, which provides more jobs as well as growth. Overpopulation? "Just push economic growth and rely on the resulting demographic transition to reduce birth rates, as it did in the industrial nations during the 20th century." If we aren't able to make the transition to a more sustainable economy, then we may be doomed with not only uneconomic growth but an economic catastrophe that lowers living standards. We need to find a way to develop a sustainable economy that is able to be maintained indefinitely into the future.
We need to start working to create a sustainable economy, and quickly. We should also teach people to not always value objects and value consumer goods so much. Money isn't happiness. It can buy materials but it can't buy happiness. Evidence suggests that growth does not always increase happiness. Instead of consuming more goods which many people would be happy to, our main focus should be to find a way to make our economy more sustainable and conserve our limited resources without depleting them or harming the environment while keeping the standard of living high enough for everyone to live comfortably, not in poverty or famine or anything else like that. We need to make decisions with the economy and future in mind. As the article said, "The sooner we start, the better."
Author: Herman E. Daly
- Growth is seen as the solution to all economic problems (poverty, unemployment, overpopulation, environmental degradation, etc.)
- If we don't make the transition to a more sustainable economy, then we may be cursed with not only uneconomic growth but an ecological catastrophe that lowers living standards
- Resource and environmental economics are subdivisions of mainstream economics
- Dynamic equilibrium: steady state (birth rates=death rates and production rates=depreciation rates)
- A sustainable economy is one that can be maintained indefinitely in the future
- Five candidate qualities that can be used used to specify what is to be sustained from year to year: GDP, "utility", throughput, natural capital and total capital (the sum of natural and man-made capital)
- Some think a sustainable economy should sustain the rate of growth of GDP, so sustainable economy is equivalent to the growth economy
- Two types of capital: natural and man-made
- Weak sustainability= sum of natural and man-made capital
- Strong sustainability= natural capital should be maintained on its own
Growth is often seen as the solution to all of the major economic problems. Poverty? Just grow the economy by increasing the production of goods and stimulate consumer spending to get more money. Unemployment? Increase the demands for goods and services by lowering interest on loans, which provides more jobs as well as growth. Overpopulation? "Just push economic growth and rely on the resulting demographic transition to reduce birth rates, as it did in the industrial nations during the 20th century." If we aren't able to make the transition to a more sustainable economy, then we may be doomed with not only uneconomic growth but an economic catastrophe that lowers living standards. We need to find a way to develop a sustainable economy that is able to be maintained indefinitely into the future.
We need to start working to create a sustainable economy, and quickly. We should also teach people to not always value objects and value consumer goods so much. Money isn't happiness. It can buy materials but it can't buy happiness. Evidence suggests that growth does not always increase happiness. Instead of consuming more goods which many people would be happy to, our main focus should be to find a way to make our economy more sustainable and conserve our limited resources without depleting them or harming the environment while keeping the standard of living high enough for everyone to live comfortably, not in poverty or famine or anything else like that. We need to make decisions with the economy and future in mind. As the article said, "The sooner we start, the better."