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Three glimmers of hope for an economic transformation

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Ecological economists, top scientists, and even a few financiers have put forth powerful arguments for moving to a steady state economy. Sometimes described as a true-cost economy, a sustainable economy, or a spaceship economy, the steady state offers a positive alternative to the delusion of endless growth.

Viewed from an environmental perspective, the need to transform the U.S. and global economic systems is becoming more urgent by the day — if you scan the headlines about global warming, biodiversity loss, and natural resource depletion, you’ll quickly get the picture. It turns out that the most important environmental policies of any nation are its economic policies. For example, there is no chance of stabilizing the ongoing climate chaos if the major economies of the world continue to reward fossil fuel usage and fail to include pollution externalities in their prices. In a true-cost economy, however, clean energy would be the cheapest, and fossil fuels would be too expensive to use.

Given the severity of the problems we face and the strong potential for steady state policies to solve them, the question is, “Why are nations failing to embrace this positive alternative?” There are many obstacles standing in the way of a sustainable economy. The skeptic would assert, “You are asking the most powerful nations in the world to change the cherished economic system they have been functioning under and embrace an economic system which no modern nation has ever used. It is a wild fantasy.”

There’s some merit to the skeptic’s argument — the suggested economic changes seem like a paradigm shift akin to those seen over the centuries in physics and astronomy. But given the unpredictability of paradigm shifts, we can encourage incremental steps toward an economic transformation.

A number of experts have laid out such steps. For instance, the economist Peter Victor has illustrated how Canada could achieve a sustainable economy. But even with a blueprint in hand, it’s questionable whether Canada or China or the U.S. or Brazil or India would ever start constructing such an economy.

Part of the problem stems from the international economic infrastructure. The continued push for economic expansion from global bodies such as the World Bank, the IMF , the G-8, the World Trade Organization, undermines intellectual support for the transformation from cowboy economies to spaceship economies.

Another obstacle comes from the extractive industries and the way they exert influence within governmental bureaucracies. These industries are propping up a business-as-usual approach to economics. If this approach continues, we can expect collapses around the world stemming from food and water riots, weather disasters, and ongoing erosion of life-support systems worldwide.

It’s tough to come up with plausible ways of overcoming these major obstacles, but three recent developments provide some much-needed hope. They may be long-shots for breaking through the resistance and spurring the transformation to a new true-cost economy, but they offer a chance.

Economic output and energy use are highly correlated. Data shown are for 175 countries in the year 2007. Sources: U.S. Energy Information Administration and the World Bank.

Economic output and energy use are highly correlated. Data shown are for 175 countries in the year 2007. Sources: U.S. Energy Information Administration and the World Bank.

The first glimmer of hope is emerging from the energy changes happening in Germany, which has become the world’s leader in electricity produced from solar and wind sources. Germans are aiming to generate half of their electricity from renewable sources within ten years. If the most powerful economies in the world were to replicate Germany’s energy policy, it would not only be a shift in the energy sector, but also a monumental shift in economics, given the way economic growth and energy consumption are connected.

The second glimmer of hope comes from growing concern about caring for creation on the part of religious congregations from many faith traditions. More and more religious organizations, liberal and conservative, are pointing to the excessive consumption in the global economy as destroying God’s creation. What if Pope Francis surprised everyone and included population stabilization on his agenda. His text could align with Genesis by envisioning a flourishing of all life on earth. That is why the blessing “be fruitful and multiply” is first given explicitly to all the animals on the planet.

A third glimmer of hope is arising from the surge of public outrage over corporate tax dodging and subsidies. Stories of financial fraud and abuse are popping up in the news coverage. The Economist’s Special Report on Offshore Finance (February 16, 2013) highlights the trillions of dollars stashed in offshore tax havens.

It’s scandalous that some of the wealthiest corporations in the world, such as General Electric, Apple, and Google, are paying little or no income tax. It’s equally scandalous that U.S. corporations continue to receive taxpayer handouts. The anger and unrest spurred by this situation offers a good opportunity to change the way businesses operate.

The obstacles to a establishing a true-cost, steady state economy are daunting, but now’s the time to get on board with efforts to overcome them. People are responding to the challenge and taking positive actions all over the world. I’ve summarized three of my favorites here, and I’m hopeful that you know of plenty of other efforts to create an economy that will work for people and the planet.

The Daly News



8 Comments on "Three glimmers of hope for an economic transformation"

  1. GregT on Tue, 26th Mar 2013 4:39 pm 

    Given the severity of the problems we face and the strong potential for steady state policies to solve them, the question is, “Why are nations failing to embrace this positive alternative?

    A steady state economy would drastically lower our standard of living. While we will end up there eventually anyways, most people will not make the choice voluntarily. It’s tragic in a way, because the pain that we are going to experience would be much less if we chose to downsize our economies, rather than waiting for natural limits to do it for us.

  2. Plantagenet on Tue, 26th Mar 2013 10:10 pm 

    You can’t have a steady state economy without a steady state population.

    The US population is growing for one reason—because of illegal immigration. As long as liberals are committed to growing the US population by facilitating illegal immigration and granting citizenship to illegals once they are in the this country, there is no chance of moving to zero population growth in the USA.

  3. BillT on Wed, 27th Mar 2013 1:36 am 

    “You are asking the most powerful nations in the world to change the cherished economic system they have been functioning under and embrace an economic system which no modern nation has ever used. It is a wild fantasy.”

    That answers the question. All of the rest is BS. Do you really think that the corporate elite are going to change and give up their power and wealth? Not until Hell freezes over.

    ‘For profit’ Capitalism and Globalization is the road to Hell, but we are speeding along it as if it lead to Disneyland. No, we will have to fall into the fiery pit and those few who survive will live in a ‘gift economy’ world or a Mad Max world. The odds are about 50:50 as to which will prevail.

  4. DC on Wed, 27th Mar 2013 2:35 am 

    Both liberals and so-called ‘conservatives’ push for massive illegal immigration in the west. Mush headed guilty liberals want to live in there multi-cultral shangri-la, while the neo-cons love massive 3rd world immigration for the cheap, near slave labor it provides, as well as expanding the pool of unskilled and semi-skilled labor in general. This in turn, pushes down wages which makes corporations even wealthier and more powerful than they were before.

    The neo-cons and there powerful allies in the x-tianity cult racket push for endless immigration much harder than liberals do, even if they make token noises from time to time about ‘closing the borders’. In reality, the cons would regard that as complete disaster.

    But I agree, a steady state economy implies a stable population. A steady state w/o a stable population simply is a different way of saying everyone is getting slowly, but steadily poorer over time.

  5. GregT on Wed, 27th Mar 2013 3:33 am 

    Plant,

    At some point you need to move beyond the imaginary lines drawn in the sand, that you think of as borders. Borders are nothing more than a means used to control people.

    You live on the same planet, and breath the same air, as every other ethnic group. The problems that we face are not discriminatory.

    The world does not revolve around the US, and as a matter of fact, the US is not exactly respected in much of the world. The issues we face also have no political affiliation. Resource depletion and environmental degradation could care less whether you are a liberal, a democrat, or a brutal dictator. Whether the US moves to zero population growth or not is irrelevant, the US comprises less than 5% of the world’s population.

    Oh, and furthermore, the only non-immigrants to the US would be the Native Indians, and I’ll bet you probably don’t find them useful either.

  6. Mike in Calif. on Wed, 27th Mar 2013 8:53 am 

    There is no such thing as a “steady-state” economy nor can one be “constructed.” There is no such thing as “sustainable” in nature and any theory derived from this strictly human concept is flawed. The proposed “cure” rests on the foolish notion that nature is static and on the utterly ridiculous idea that a human system can be engineered following an abstract “blueprint” inspired by a false theory. Pretty much doomed from the ground up.

    In general humans will seek “growth” which has economic implications and will do so regardless of what economic “system” is in place. They will pursue property, wealth, status and power. They cannot be “taught” and cannot be coerced to act, 100% time, against personal interests and personal gain.

    If you’re going to construct a “system” for a degree of longevity and comfort, you’re better equipped by Darwin than Marx. Your would-be engineer is better informed by human nature and Nature’s nature rather than assuming a Man that cannot be created and a nature that does not exist.

  7. Name on Thu, 28th Mar 2013 1:24 pm 

    Great point, Mark! I too am tired of all the utopias floated around as a cope mechanism… the world will most probably not resemble any of them!

  8. Kenz300 on Fri, 29th Mar 2013 12:31 pm 

    RepubliCONS have pushed for cheap, illegal immigration for decades. They have been happy to employ illegal workers and fought against fines for employers that hire anyone in the US illegally.

    They are now pushing for an expanded guest worker and VISA program in order to bring in more cheap labor and drive down wages.

    They just do not want their illegal labor to VOTE or have any benefits.

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