Herman Daly's steady state of economy

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Herman Daly's steady state ofeconomy

• Iñigo López Mendezona
• María Muruaga Vidarte
• Silvia Samper Merino
• Elisa San Salvador Picó

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Index

• Presentation of H.D
• Uneconomic growth
• Strong Sustainability
• Globalisation
• Overpopulation

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Where does he come from?

• Currently professor at University of Maryland,
  School of Public Affairs
• 1988-1994 Senior Economist in the Environment
  Department of the World Bank.
• Prior to 1988 Alumni Professor of Economics at
  Louisiana State University, where he taught
  economics for twenty years
• Interests economic development, population,
  resources, and environment

• Main books
• Steady-State Economics (1977 1991)
• Beyond Growth (1996)
• co-author with John B. Cobb, Jr. of For the
  Common Good (19891994)

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Index

• Presentation of H.D
• Uneconomic growth
• Strong Sustainability
• Globalisation
• Overpopulation

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For the common good (1989)

• Greater income makes people not to be as happy
  as they were before

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For the common good (1989)

• Do GNP increases lead to increases in happiness
  and welfare ?
• Should we change the way we measure economic
  success?
• That which seems to be wealth may in verity be
  only the gilded index of far-reaching ruin, John
  Ruskin
• Are we actually involved in economic growth or in
  uneconomic growth?

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Sub-system of a larger ecosystem
so our economy will have to adapt to that same
non-growth pattern
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Uneconomic growth

• New national accounting
• We should compare benefits and costs at the
  margin, in an effort to seek an optimal level of
  activity.

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Evidence of Uneconomic Growth
70s MEW Late 80s ISEW 90s GPI

• Policies should forget about just stimulating
  aggregate economic growth!!!

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Environmental Kuznets Curve (1991)

• Is the cure to an environmental problem just to
  persist in uneconomic growth???

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To think about

• Even if GDP was not invented to reflect
  improvement in human well-being........doesnt it
  seems that the only thing that matters is GDP???
• we should take into account both the benefits and
  the damages that economic activity provoque.
• We should reflect about our system, our desires
  and preferences

Education is needed that love, pleasure,
fullfilment, enjoyment, and other rewards do not
depend on over consumption, but in fact are
decreased by it
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To sum up.. and introduce next part

• Our economy must become a non-growth economy
• Sustainable Development
• Quantitative growth in populations of both
  people and commodities must ultimately end, but
  qualitative improvement can continue in a regime
  of sustainable development
• Qualitative improvement of non-growing systems
  has been observed for long periods of time

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Index

• Presentation of H.D
• Uneconomic growth
• Strong Sustainability
• Globalisation
• Overpopulation

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Different levels of Sustainability (I)

• Weak
• Mantaining TOTAL capital intact
• Human capitalNatural capital
• Social capitalManmade capital
• Intermediate
• Mantaining total capital intact
• defining critical levels of each kind of capital

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Different levels of Sustainability (II)

• Strong Mantaining different kinds of capital
  separately
• Absurdly strong Would never deplete anything!!!!
• Nonrenewables could not be used
• Renewables only to a certain point

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And the question is...

• Are manmade and natural capital SUBSITUTES or
  COMPLEMENTS in the economic function?

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Dalys view

• In the future natural capital will act as a
  limitation in the economic function

• In favour of STRONG
• Complementarity of manmade and natural capital

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Management of resources

• Renewable resources 2 rules
• 1-Harvest rates regeneration rates
• 2- Waste emission rates assimilative capacities
  of the ecosystems

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Management of resources

• Non renewables
• rate of consumption of non-renewables
• rate of creation of renewable substitutes.

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Index

• Presentation of H.D
• Uneconomic growth
• Strong Sustainability
• Globalisation
• Overpopulation

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Introduction

• What is globalisation?
• IMF
• the growing economic interdependence of
  countries worldwide through increasing volume and
  variety of cross-border transactions in goods and
  services, free international capital flows, and
  more rapid and widespread diffusion of
  technology
• International Forum on Globalization
• the present worldwide drive toward a
  globalized economic system dominated by
  supranational corporate trade and banking
  institutions that are not accountable to
  democratic processes or national governments.
• Critics Noam Chomsky, JM Keynes

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Daly and WB recomendations

• Free trade
• Free capital movility vs. Nationalist
  
• 
  orientation
• Fall of national governments
• Rise of transnational corporations
• The real global competitiveness

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Globalisation and growth. WB, IMF, WTO.

• What globalization says.WB, IMF, WTO
• Rich?rapid growth to provide markets to poor.
• Poor?sell their exports in those markets
  accepting foreign investments from corporations.
• Unavoidable?
• if rich dont grow, no surplus to invest in poor
  countries. As a result, they dont buy the export
  of the poor ones.
• Solution
• Support the idea of decreasing the uneconomic
  growth in rich countries to make room for the
  poor to increase their economic growth.

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Comparative and absolute advantage

• Comp. Advantage? requires capital immobility to
  be fully positive
• Abs. Advantage?coherent with actual model
  (capital mobility)
• Less benefits than comp. Adv.
• Solutions
• Restrict international capital mobility
• Introduce international redistribution of global
  gains
• IMFs choice elude the contradiction.
• Comparative advantage-based free trade
• Free international capital mobility

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Index

• Presentation of H.D
• Uneconomic growth
• Strong Sustainability
• Internalisation-Globalisation
• Overpopulation

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POPULATION GROWTH AND ENVIROMENTAL SUSTAINABILITY
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Introduction

• Malthus terrible disasters could result from
  the consequent imbalance in the proportion
  between the natural increase of population and
  food.
• The growth rate of world population has speeded
  up over the last century at a remarkable rate.
• Our current inequitable patterns of production,
  consumption and distribution have not been
  capable to provide adecuately today s relative
  low population

Changes in attitude and practices needed to be
able to face the increase of population expected
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Population and sustainability

• Rapid population growth is mainly a Third World
• phenomenon
• North America Europe fertility rates have come
  down with social and
• economic development
• Asia Latin America are experiencing a fall in
  fertility rates.
• SubSaharan Africa The magnitude of population
  problem remains huge.
• Robert M.Solow
• Paradox in poor countries they have children to
  ensure policies for their own old age
• Control of population growth would probably be
  the best available policy on behalf of
  sustainability

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How to measure the impact of population growth in
environmental sustainability

• Herman Daly defines CC
• The maximal population size of a given species
  that and area can
• support without reducing its ability to support
  the same species in
• the future.
• In the case of humans this indicator reflects the
  sustainable
• level of population growth, considering the
  finite nature of
• Our planet, giving priority to development
  rather than to growth.
• Ehrlich and Holdren created a model to measure
  this concept
• I P x A x T

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Posible solutions to the population problem

• Different opinions
• Those who would give priority to the family, or
  the potential mother, to decide how many children
  to have, ensuring their access to family planning
  and education (India)
• Those who have opted for coertion policies in
  matters of family decisions (China)
• Amartya Sens opinion
• There is little evidence that coertion works
  faster than what can be
• achieved through voluntary family planning,
  social change and
• development

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Personal thinking

• In a world with limited resources and especially
  under current inequitable patterns of living, it
  is undeniable the necessity to slow down
  population growth.
• It is important to avoid side effects of
  population control measures
• Population stability is not only a matter of the
  poor countries, but also of those developed
  high-consuming nations which must reduce their
  necessity for growth.
• Developed world is mainly responsible for
  the profligate an
• inequitable use of resources