The Steady State Delusion

Several months ago, I learned about an organization with which I was previously unfamiliar, the Center for the Advancement of the Steady State Economy (CASSE).

The term “steady state economy” (from which CASSE derives its name) is based on a concept that John Stuart Mill introduces in Principles of Political Economy (1871), “the stationary state.” The steady (or stationary) state refers to a novel economic situation that Mill predicted would eventually be realized. Unlike previous economists, who regarded such a state with “unaffected aversion,” he repudiated the notion that the normal human condition was one of endless competition and conflict. Instead, he regarded that situation as merely a “necessary stage in the progress of civilization.” He hoped civilization would culminate in a stabilization of the world’s population, an equalization of property thanks to the limitation of inheritances, and the development of popular habits of “prudence and frugality.”

With an end to population increase, plenty of space would be left for solitude and the contemplation of nature’s beauty. “Industrial improvements” would be aimed no longer at increasing wealth, but rather (as Marx and Engels forecast would occur under communism) at reducing the need for labor.

CASSE’s “strategy,” as explained on its website, is indicative of some broader trends in economic thinking that span recent decades. The organization, a U.S.-based nonprofit, was founded by Brian Czech in 2004. Echoing the population biologist Paul Ehrlich’s 1968 bestseller The Population Bomb, along with the 1972 Club of Rome report Limits to Growth (both of which outlined disaster forecasts that were thoroughly refuted by subsequent developments), CASSE aims “to refute the dangerous rhetoric that there is no conflict between growing the economy and protecting the environment.” Czech holds a Ph.D. in “renewable natural resource studies” from the University of Maryland. Another board member is Herman Daly, a retired World Bank economist and “Georgist economist” at the University of Maryland, who is described as “the champion of steady state economics.”

Daly believes that unceasing growth on a finite planet is a recipe for disaster. Our present system of “neoclassical economics,” according to Daly’s research, “places economic growth as the highest good” and “regards the natural world as a limitless larder of resources for economic exploitation.” With a global population of nearly eight billion that relies on resource-destroying technology, our habitation will eventually become unlivable, they claim.

By outlining the gaping flaws and naiveté of steady state thinking, I hope to ensure that our policies remain grounded in economic realities and nonetheless pursue sustainability and political well-being.

 

There are many problems with the post-growth model that CASSE and its staff espouse. Steady state thinking worries about climate change, but completely denies the fact that economic growth leads to more efficient use of energy, fuel, and resources. It also overlooks the political decisions required in a post-growth economy: in what range, exactly, are income levels sufficiently equal? And what population level is ecologically desirable? By outlining the gaping flaws and naiveté of steady state thinking, I hope to ensure that our policies remain grounded in economic realities and nonetheless pursue sustainability and political well-being.

Misplaced Priorities

Among the “15 top policies” listed as elements of CASSE’s program are: the guarantee of “full and sustainable employment;” stabilizing population in a way that ensures “a high” but ecologically sustainable “standard of living for everyone”; legally limiting the range of economic inequality; “establishing a more flexible working day, week, and year to provide more opportunities for people to decide how to use their own time”; instituting policies that move away from globalization and toward localization to provide local jobs and “maintain local decision-making authority”; limiting advertising “to prevent unnecessary demand stimulation and wasteful consumption”; and replacing the Council of Economic Advisers with a “Bureau of Population and Consumption” focused on sustainability.

Several problems are immediately manifest in this list. First, the program it recommends takes for granted that once population is properly stabilized, a “high standard of living” (the level of which is undefined) will be available for everyone. But this is a non sequitur—a stabilized population means the amount of labor required to generate such comfort would be reduced, and so would the capital needed to support people’s lifestyles, thanks to caps on wealth accumulation.

Second, there is the obvious contradiction between maintaining elevated standards of living and the replacement of globalized production by purely local production. Supporting your local grocery store will cost a good deal more than shopping at Walmart, to say nothing of Amazon. Economies of scale are an undoubted fact of economic life. A major reason for the United States’ central government (as well as the European Union’s) was to eliminate interstate trade barriers that prevented competition and what economist Deirdre McCloskey calls “trade-tested innovation.” Remember how the quality of American automobiles began to improve in the 1980s thanks to the entry of Japanese alternatives, built using advanced manufacturing techniques and management systems.

To read CASSE’s broadsides, one would never know that the advance of science has made it possible to generate ever-increasing amounts of energy from all sorts of fuel (fossil, nuclear, and other). Nor would one be aware of how moderate and well-informed scientists, engineers, and industrial organizations, acting out of enlightened self-interest, are paving the way for reducing the environmental side effects of industrial production, without aiming to abandon all growth. Such efforts are well described in the writings of Bjorn Lomborg, the “skeptical environmentalist” who heads the Copenhagen Consensus.

CASSE’s dire warnings of overpopulation also overlook the growing phenomenon of population decline in most of Europe, Japan, and China, as well as the slowing of population growth in poorer countries such as India and much of sub-Saharan Africa, a development commonly associated with the very economic growth CASSE seeks to halt. Typically, with urbanization and the growing application of technology to agriculture, along with the decline in infant mortality thanks to medical advances, families in “Third World” nations see less need for large numbers of offspring to maintain the farm and support elderly parents. Meanwhile, cultural factors—greater entertainment offerings in wealthier cities; the desire to expend family resources on maximizing one’s children’s educational opportunities—also reduce the focus on having many kids.

Unmentioned by CASSE are the problematic economic futures facing nations with too few young people left to support too many retirees. Neither do CASSE’s theorists take account of the dullness of the utopia they envision: reduced innovation in intellectual, religious, artistic, cultural, and scientific spheres as populations grow old; a drying-up of the spirit of adventure that characterizes youth. How different would CASSE’s utopia look from a senior citizens’ community in Florida or Arizona today?

Political Disregard

But above all, the striking deficiency in CASSE’s program of priorities is its disregard of the political question. Who is to decide, and by what criteria, what constitutes a “high standard of living” or an acceptable level of inequality? Who decides what sort of advertising is to be tolerated? And most worrisome, by what means will the Bureau of Population and Consumption go about its task of reducing national and world population to an ecologically desirable level?

Nowhere, aside from its nod to local decision-making, does CASSE’s list of priorities address how authority is to be delegated to some governing body having the right to make such decisions. The vastly expanded power it implicitly claims for such an authority—to regulate what in a free society are normally regarded as private choices: where to shop, how many hours to work in return for how much compensation, how much to save, what to eat, and even how many children to have—makes the problem all the more frightening.

Who is to decide, and by what criteria, what constitutes a “high standard of living” or an acceptable level of inequality? Who decides what sort of advertising is to be tolerated?

 

And who is to say that either America or the world has reached the ultimate state of reasonable prosperity, such that no major innovations are needed in health care? How can we be sure that we can dispense with new technologies, such as the “Green Revolution,” and still combat hunger among the billions of people still living in poverty? Is the effort to develop better treatments for cancer or heart disease—to say nothing of malaria and other illnesses that plague less-developed nations—something we should dispense with? Such cures, as the treatment of the current COVID-19 pandemic demonstrates, typically require the investment of many billions of dollars.

Threads of post-growth thinking like that espoused by CASSE are present nowadays not only in economic debates, but also in some people’s personal choices not to have children at all (due to climate change concerns, for example). But again, the deepest problem with CASSE’s program is a political one—or rather, its disregard of politics, and hence of people’s right to participate in their own governance. Nowhere does CASSE’s website acknowledge the political decisions that would be required in a post-growth economy: What range of income levels is sufficient both to meet its mandate of equality and to give sufficient incentives to individuals to work or invest just enough to maintain society’s current level of comfort and wealth? What population level is ecologically desirable? Above all, who is to be vested with the authority to make such monumental decisions—including even the decision to procreate—for the human race?

The Case against CASSE

Given its lack of grounding in any intelligible economic science, the unrealism of its program, and its disregard of fundamental constitutional principles, it would be easy to dismiss CASSE as the work of a small group of eccentrics who lack significant influence in the world. The website lists some thirty-five chapters, scattered mostly at various points in the Anglophone world, but with one each in Hong Kong, Serbia, Shanghai, two each in Scandinavia and Colombia, and one in “the European Union.”

But sometimes movements that seem fringe represent broader trends in thinking. Indeed, among the sources listed for the group’s program, one was published in 2000 by a major academic press, that of the University of California: Czech’s Shoveling Fuel for a Runaway Train: Errant Economists, Shameful Spenders, and a Plan to Stop Them. Who knows how many gullible undergraduates and even graduate students are already being fed such pap?

The roster of cranky fringe groups convinced of the imminence of the millennium is far greater today than the fanatical, messianic religious movements of medieval and Reformation Europe catalogued by historian Norman Cohn in The Pursuit of the Millennium. This is all the more reason for those who concern themselves with the preservation of political, economic, and personal liberty, as well as the advancement of learning, to expose CASSE’s ideas for the delusions that they are, lest they add to our civilization’s intellectual and moral degeneration.

David Schaefer Public Discourse http://www.thepublicdiscourse.com/