Category Archives: Economic issues

An economic growth FAQ from the Center for the Advancement of the Steady State Economy

[Update: Since this was posted, the CASSE site, including the FAQ, has been revamped. I encourage you to go there and have a look around!]

Administrator’s note: Though lots of actions play around the edges of helping address our environmental problems, very few get to the heart of the matter. One that does is the promotion of economic policy which rejects the notion of endless economic growth. In that vein, the “steady state economy” is a key alternative model, having grown out of the work of those in the field of ecological economics.

And no one works harder or more effectively to promote the steady state economy than Brian Czech, Ph.D. (and team!) and the Center for the Advancement of the Steady State Economy (CASSE). Trained as a conservation biologist, Brian is today an important contributor to our understanding of ecological economics, which he teaches as a visiting assistant professor at Virginia Tech. He is the author of Shoveling Fuel for a Runaway Train.

Here then, is the CASSE FAQ on economic growth. In few words, it says a great deal, touching on key points involved in the fundamental conflict between economic growth and environmental protection. My thanks to Brian for making it available! Find previous posts on Brian and CASSE here. In a related vein is this recent piece on ecological/steady state economics at Trinifar and this one at The Natural Patriot. — JF
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By Brian Czech:

What is economic growth?

Economic growth is simply an increase in the production and consumption of goods and services. It entails increasing population and/or per capita production and consumption. It is measured or indicated by increasing GDP, or gross domestic product.

Why is economic growth a threat to the environment?

The economy exists within the ecosystem. This fact is overlooked in business and economics textbooks, where the economy is portrayed as a circular flow of money between firms and households:

Economy

The production of goods and services entails the conversion of natural resources, or “natural capital,” into consumer goods and manufactured capital. This explains why there is a fundamental conflict between economic growth and biodiversity conservation (pdf). Furthermore, pollution is an inevitable byproduct of economic production. The degradation of the environment as a result of economic growth occurs in many ways, but in general, economic growth leaves a larger ecological footprint.

Why is economic growth a threat to economic sustainability, national security, and international stability?

To grow, an economy requires more natural capital, including soil, water, minerals, timber, other raw materials and renewable energy sources. When the economy grows too fast or gets too big, this natural capital is depleted, or “liquidated.” To function smoothly, the economy also requires an environment that can absorb and recycle pollutants. When natural capital stocks are depleted, and/or the capacity of the environment to absorb pollutants is exceeded, the economy is forced to shrink. (more…)

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