Transition towards a Steady-State Economy – Critical Response #2 by Allison Franko

Herman Daly’s article on ecological economics examines a transformation to a steady-state economy. He submits that our current growth economy is failing in two primary ways:  the uneconomic effects of continuous positive growth, and those of negative growth, resulting from the self-destructing nature of financial bubbles.[1] He questions whether we are still becoming more affluent from such growth, or whether such growth is actually depleting our riches.[2] His suggestion is a gradual transition to a steady-state economy, with neither positive nor negative growth, and he puts forth a series of ten somewhat radical steps to foment such an economy. However, Daly explains, these steps are “not as insanely unrealistic,” when compared to the rationale upon which many rely for validating continuous growth.[3] In this response I will discuss Daly’s third suggested policy for moving towards a steady-state economy: limiting the range of inequality in income distribution. I will also touch on Tim Jackson’s two complimentary articles about both the implications of and the avenues towards a sustainable economy as they relate to reducing inequality. Ultimately, any agreement on the establishment of income ranges will only be reached once developed societies decrease the glorification and focus currently associated with the acquisition of status goods and material wealth, and when their individuals’ identities are no longer primarily derived from their employment and socio-economic status.

Daly posits that the establishment of a minimum and a maximum income will bring an end to unlimited inequality. One obvious obstacle is that inequality has been ingrained in most of the basic elements of our very social framework; a complete transformation of societal values and capitalism’s core principles and practices would be required – something extremely unlikely to take place in the relatively near future of 40 or 50 years. Ergo, the notion that those at the top, who are typically the greatest beneficiaries of inequality, could be somehow persuaded to stop amassing wealth once they had attained some level, is highly implausible.  Daly advocates the first step in this process is reducing the range of inequality to a factor of 100, (Corporate America has a range of over 500, while many industrial nations are below 25) “and see how it works”.[4] On a localized scale, certain adaptive policies could be successfully implemented over the short term if developed collaboratively with individual businesses in mind, as opposed to the arbitrary imposition of some common fixed factor for the maximum range of inequality. The biggest hurdle would most likely be overcoming people’s initial strong opposition to such range limits; however, as Daly implies, the sense of community necessary for democracy would be much easier to maintain if income gaps are narrowed.   Jackson’s articles supplies us with such aids useful for gaining mass acceptance of income ranges, by emphasizing ‘alternative hedonism’.

When the working week is shortened, unemployment and poverty have been shown to significantly decline.[5] This is a good way to maintain full employment without growth, and to also encourage ‘alternative hedonism’, which will in turn promote a more equitable and less competitive society.[6] In Tim Jackson’s article, “Recovery without growth”, he alludes to Daly’s fourth point: shortening of the working day, week, and year, to allow for part-time or personal work.[7] Daly claims that full-time employment is synonymous with constant and unsustainable growth and Jackson offers a viable idea which addresses this issue:  to share the available work more evenly across the population- essentially reducing working hours and increasing free time, and without causing widespread unemployment.[8] In Jackson’s subsequent article, “Prosperity without growth?”, he further explains how an improved work-life balance will help to lower the emphasis placed by many people on status and consumerism, leading greater social equality.[9]

Allowing people to devote more time to “sources of identity, creativity, and meaning that lie outside the realm of the market,” and the workplace, will help to lower materialistic consumerism and promote greater social equality.[10] Some may wonder if people will use their ‘freed up’ time in productive and sustainable ways. Of course, there will always be a minority who do not choose to use a shortened work week in thoughtful and beneficial ways, but society overall will derive greater social benefits from the majority who do than it will from the alternative – an overworked and materialistic society.

In conclusion, the premise that current and constant growth rates are unsustainable and eventually need to slow and ideally approach zero is fundamental to Daly’s article. One of his ideas towards achieving this end is to reduce income disparities; however, it is clear that such reductions, in a world dominated by neo-liberal capitalism and materialistic individuals, are both unlikely to occur any time soon, and pose many obstacles.  However, insofar as reducing income disparities, both Jackson and Daly have touched on an idea that could have success in this regard:  reducing the number of hours in a work week and eventually shifting towards equitably shared part-time employment.  This idea is the most viable and the most likely to gain widespread acceptance among individuals because it provides valuable free time which will in turn stimulate greater focus on external sources of satisfaction and meaning outside of the workplace.  In this way, the importance society seems to place on material wealth will be diminished, and social inequality should also be reduced. The further society transitions to a less materialistic value system and its citizens become more focused on ‘experiencing’ and less so on ‘having’, the more likely large-scale agreement to the establishment of income ranges will become; even the wealthiest segments of society, who seem to have the most to lose, could find themselves reaping non-material benefits and rewards in such a transition.

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[1] H. E. Daly, “From a Failed Growth Economy to a Steady-State Economy,” Lecture for the United States Society for Ecological Economics bi-annual meeting, at the American University: Washington, D.C., (June 2009).

[2] Ibid.

[3] Ibid.

[4] Ibid.

[5] Jackson, “Recovery without growth?” Renewal 17, No. 3(2009): 50.

[6] Jackson, “Prosperity without growth? The transition to a sustainable economy,” Sustainable Development Comission (2009), http://www.sd-commission.org.uk/publications/downloads/prosperity_without_growth_report.pdf, 10.

[7] Jackson, “Recovery without growth?” 49.

[8] Ibid.

[9] T. Jackson, “Prosperity without growth?” 10-11.

[10] Ibid.