There are many different groups around the world who would love to see a steady state economy. This ambition is of particular importance to environmentalists who see it as a way to help protect the world from global warming. There are claims that such an economy would be ethically on a sounder footing and would create more happiness for citizens.
The idea of a steady state economy has existed in economic theory since the nineteenth century but it was probably a book by Herman Daly in 1977 that has caused it to be so talked about today. In Daly’s book Steady-State Economics he discusses the absolute limit at which natural resources and energy supplies can be used effectively. He claims that going above this limit leads to all types of problems for the environment and society. The theory is based on the idea that there is a steady state in all of nature and it also applies to human actions like economics.
Sustainable economic growth involves taking into account environmental issues and the realities facing humans. It also suggests that the rich should reduce their throughput growth so that resources can be spread among those in the poorer areas of the world. An economy that is in a steady state is not viewed as static, but instead of there being mostly a growth in quantity there will be a growth in quality. Many argue that the current economy is outstripping the world’s natural resources and that it should not grow any further.
In order for a steady state in the economy to be achieved it involves accepting certain economic policies that governments would need to apply. The focus would need to be on maintaining the overall health of the ecosystem. Those resources that are renewable would only be allowed to be extracted as they can be replaced and non-renewable resources would only be used as new non-renewable resources are found. Finally, any waste that is introduced into the environment should only occur at a safe rate whereby it can be easily assimilated.
The steady state economy has also drawn some criticism from economists. There are those who argue that any limits in growth can be countered by improved technology and more efficiency. There is also the argument that the economy doesn’t necessarily need more natural resources in order to grow; an example of this would be the huge growth of the information economy.