Robert Vienneau — A Semi-Idyllic Golden Age

Weekend thinking.

Thoughts On Economics
A Semi-Idyllic Golden Age
Robert Vienneau

Charles Eisenstein makes FT


Steven Keen also gets a shout out.

The Financial Times | Alphaville

Towards a steady-state economy?
Posted by Izabella Kaminska
(h/t Andy Blatchford via emial)

Clive Thompson — Nothing Grows Forever

On moving from an unlimited growth to a steady-state model.

Read it at Mother Jones
Nothing Grows Forever
By Clive Thompson
(h/t Kevin Fathi via email)

Herman Daly's Steady-State Economics

I finally sat down and read Daly’s classic book Steady-State Economics, which I think is worth discussing in light of today’s situation. In this post I’d like to begin to review Daly’s ideas (which were ahead of their time—the first edition was written in 1977). His ideas are deep and simple at the same time, and should be a foundation for any future economic system.

Daly makes a point at the beginning of the second edition that is both “obvious” and true. (I use quotes because I’ve found that sometimes things that are obvious are either not so, or not true, for a variety of reasons.) Using Schumpeter’s term “preanalytic vision”—the premise upon which a theory is built—he describes the basis for both standard and steady-state economics:

What is the preanalytic vision of standard economics? Of stead-state economics?

For standard economics, it is that the economy is an isolated system in which exchange value circulates between firms and households. Nothing enters from the environment, nothing exits to the environment. It does not matter how big the economy is relative to its environment. For all practical purposes an isolated system has no environment.

Contrast this with steady-state economics:

For steady-state economics, the preanalytic vision is that the economy is an open subsystem of a finite and nongrowing ecosystem (the environment). The economy lives by importing low-entropy matter-energy (raw materials) and exporting high-entropy matter-energy (waste). Any subsystem of a finite nongrowing system must itself at some point also become nongrowing.

The logic is so simple, yet somehow it isn’t the basis for today’s dominant economic thinking. Daly comments that the discipline of economics is not so keen on creative destruction when applied to the discipline of economics itself....

Read the rest at Contraposition, Daly’s Steady-State Economics by barath