27 December 2008

Steady State Economics & GDP

Adbusters have named Herbert Daly as their Person of the Year. Daly has long been champion of the notion of the steady state economy. A former Senior Economist in the Environment Department of the World Bank, Daly is currently Professor in the School of Public Policy at the University of Maryland. Daly is no slouch: he has been awarded the Right Livelihood Award and the Heineken Prize for Environmental Science, the Sophie Prize, and the Leontief Prize.

Daly's ideas are nicely summarized in the Adbusters article, Towards a Steady-State Economy: (originally posted at the Oil Drum)
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.

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.
Quality not quantity. What a novel idea. Or perhaps not so novel after all. Forty years ago, in his first campaign speech, Robert F. Kennedy put forward prescient comments on the Gross National Product. The video below is but two minutes and eleven seconds long. A good investment of time.

The video was produced by the Glaser Progress Foundation. If you want to dig deeper into ways in which we might better measure progress, their website has quite a good resource library. You might also want to peek here and here and here.

Cross Posted at Open Salon

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