Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.

Herman Daly Speaks (again)

by rdf Mon May 5th, 2008 at 11:53:34 AM EST

For those not familiar, Herman Daly is one of the fathers of the "ecological economics" movement. The basic premise is that the world is finite and the present economic systems that depend upon depletion of natural resources can't go on for ever.

What is needed is a transition to a steady-state economic system. He has presented a paper summarizing his thinking at a recent conference which has been picked up by the Oil Drum blog.

Here's the link:

He has expanded his core of ideas to include actual policy prescriptions including change the tax and banking structures.

Here's his summary:

Ten Point Policy Summary
  1. Cap-auction-trade systems for basic resources. Cap limits 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 immigrants 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.

Since I've been a big fan of his goals and a critic of his lack of implementation ideas, this seems a good step forward.

I've not been able to find the original talk, so if anyone else does please post a link.

European Tribune - Herman Daly Speaks (again)
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.

I quite like this one.  It would go a great long way towards reducing the obscene inequalities we see where parts of the world are overfed, overindulgent, selfishly depleting resources with that wealth and have far more than they know what to do with and the majority of the rest of the world doesn't have enough.  The people who cling onto their money in complete disregard of poverty and severe social issues elsewhere  should be made to pay the social costs of their businesses and activities.

But what will it take for this to become a realistic and inevitable policy position?

by In Wales (inwales aaat eurotrib.com) on Mon May 5th, 2008 at 12:07:13 PM EST
I have quite a few essays on my web site which are riffs off the basic axiom of Daly. I cast problems as a four-stage process.

  1. Define the problem
  2. Define goals that would solve the problem
  3. Define the steps to get from 1 to 2
  4. Define a workable transition plan which can overcome the power of those who benefit from the status quo.

For a long time I was critical of Daly because he only dealt with 1 and 2. He seems now to have moved to 3. I view this as progress.

The real problem is 4. Tell me how we are going to get the wealthy who also control the levers of power to give up both wealth and power for the "greater good". There are very few cases of this happening voluntarily. Usually there is some sort of civil unrest or revolution required to effect real change.

Look how difficult it is to even get some marginal changes in the US income tax rate or the estate tax.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Mon May 5th, 2008 at 12:30:58 PM EST
[ Parent ]

A failed growth economy and a steady-state economy 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" as historian J. R. McNeil calls it in his book of that title.

What a great beginning.

The shift he points out is one of the key processes that should long ago have revealed the idiocy of the knee-jerk link between growth and prosperity.

Capitalism searches out the darkest corners of human potential, and mainlines them.

by geezer in Paris (risico at wanadoo(flypoop)fr) on Wed May 7th, 2008 at 12:41:35 AM EST

Go to: [ European Tribune Homepage : Top of page : Top of comments ]