The Steady State Economy Movement

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Enough is Enough

Rob Dietz and Dan O’Neill (2014)

Free PDF download at steadystate.org/

Book Review

Enough is Enough is the report of the world’s first Steady State Economy Conference in June 2010. The concept derives from Herman Daly’s 1977 book Steady State Economy, published five years after the Club of Rome’s infamous Limits to Growth.

The 2010 conference was organized around two basic premises: 1) that the drive for unlimited economic growth is making the planet uninhabitable and 2) that transformation to a steady state economy is essential if we’re to have any hope of preserving the human species.

Enough is Enough begins by outlining why unlimited growth is impossible on a finite planet with finite resources. It goes on to define a steady state economy as having four key features: it’s sustainable, it provides for fair distribution of resources, it provides for efficient allocation of resources (i.e. it doesn’t rely solely on the free market in situations where the market can’t allocate resources efficiently) and it provides a high quality of life for everyone.

The authors focus on four basic steps essential in the transformation from a growth-based to a steady state economy:

1. An agreement to limit resource use – renewable resources (eg forests, fisheries) are harvested no faster than they can regenerated and non-renewable resources (eg fossil fuels) are consumed no faster than the wastes they produce can be recycled. There are a number of possible policy tools for making this happen: an outright ban (similar to current fishing bans), ecological taxation (eg carbon taxes or oil extraction taxes similar to Alaska’s petroleum tax), cap and trade (sets an overall cap and auctions off permits to pollute or mine up to that cap) and cap and share (sets an overall cap and distributes free permits to pollute or mine among all citizens).

2. Population stabilization – through non-coercive population policies that balance immigration and emigration and provide incentives to reduce family size. Examples include increasing access to birth control and education and full equality for women.

3. Inequality is reduced through policies that encourage worker cooperatives, employee ownership, shareholder participation, gender balance in positions of power, a Universal Basic Income (see The Case for Unconditional Basic Income), a cap on pay differentials between workers and management and progressive taxation schemes.

4. Monetary reform – in addition to prohibiting banks from creating money out of thin air and transferring the power to create money to a public authority, there needs to be more promotion of local currencies to stimulate local economies.

5. New progress indicators – substituting something similar to the Human Progress Indicator (HPI), which measures environmental and human well being, for Gross Domestic Product (GDP), which merely measures money.

6. Commitment to full employment – we need to use automation to eliminate onerous and unemployment work, rather than eliminating jobs, as well as shortening the work week (in conjunction with a UBI) to enable more people to have jobs.

7. New attitudes towards business and production – we need to incentivize businesses to achieve “right” sized profits that are large enough to guarantee a company’s economy viability but not so large they exceed its ecological allowance.

8. Global cooperation over resource use – we need to agree all trading partners wind down growth simultaneously. Otherwise steady state economies could experience significant trade disadvantages.

9. New consumer behavior – we need to promote new values that emphasize the positive aspects of a steady state economy (community connectedness, friendship and creativity) over the competitive individualism, hedonism, status and achievement that are emphasized in a growth economy.

10. Engaging politicians and the media (which will be the hardest) – by doing more research and analysis of the steady state model, creating forums to engage the public, politicians, policy makers and academics and to working for small changes at the local community level.
Rob Dietz is the European director of the Center for the Advancement of the Steady State Economy (CASSE). More information about CASSE at http://steadystate.org/

In the video below Dietz and O’Neill talk about their book.

Unemployed Youth: the Lost Generation

youthRecovery? What Recovery?

High youth unemployment is a defining characteristic of the current recession. Despite the so-called recovery, a fifth or more of young people under thirty remain unemployed. In most countries, youth joblessness is triple the general unemployment rate. In some regions with harsh austerity regimes, youth unemployment is increasing.

In the US the preferred approach to youth unemployment, both by government and the media, is to ignore it. Elsewhere the attitude towards youth unemployment is mixed. In Europe, the European Commission has appropriated $1 billion euros to address youth joblessness. Yet only Germany and Switzerland have come up with real solutions.

Pundits offer a variety of explanations for the stubborn problem of youth unemployment: globalization (i.e. jobs moving to the third world), automation (i.e. replacement of jobs with robots), the greed of baby boomers who refuse to retire (greasing the wheels for social security and pension cuts) and government policies that allow billionaires to suck all the money out of the economy for their personal pleasure.

An increasing number of economists see youth unemployment as symptomatic of structural economic changes related to the end of global growth. Despite all the corporate media babble about perpetual economic growth, the phenomenon is actually quite new. Prior to the harnessing of fossil fuels by the industrial revolution, all human civilizations were based on steady state economies.

Of the three documentaries below, the first, from Canada, is the best. Portraying youth unemployment as a permanent structural problem, it’s highly critical of the Canadian government for refusing to address it.

The four important points Generation Jobless (Canadian Broadcasting Corporation 2014) makes are

1) by 2030 half of all the current jobs will be gone
2) the “lost generation” (the 20% of Canadians under thirty who remain unemployed) is highly unlikely to ever land permanent good-paying jobs
3) Canadian universities are training young people for obsolete jobs instead of offering them new skills needed in the present economy.
4) Canada’s student loan program is a fraud – students are pressured to take on vast amounts of debt on the promise of good paying jobs that don’t exist.

The film disputes the frequent claim that a large aging population is a drag on the Canadian economy – the real drag on the economy is the underutilization of Canadian youth. This has drastic implications for the future health of the Canadian economy. Most of a society’s wealth comes from the skills of its workforce.

This first documentary also highlights two examples of programs that are successfully cutting youth unemployment, one at the University of Regina (UR) in Saskatchewan and the other in Switzerland.

The UR Guarantee program, which promising all entering students will be placed in a job on graduation, has a 97% success rate. From day one, the curriculum for all students includes career counseling and career education, consisting resume writing, interview skills and networking. Students also participate in an apprenticeship program in their chosen field, thanks to a cooperative agreement UR has with local businesses. Finally, they get a guarantee: any graduate who fails to find work in six months returns for an extra year (free of charge) to further hone their skills.

In Switzerland, youth unemployment is 2.8% (roughly a tenth of other industrialized countries), thanks to a high school program that allows them to start an apprenticeship at fifteen. The Swiss Employers’ Association helps local high schools set up their apprenticeships, which include white collar fields, such as health care, banking and IT, as well as the traditional trades.

The 2013 BBC documentary Young and Jobless is less hard hitting. Unlike the CBC documentary, it fails to emphasize the failure of the British government to acknowledge or address the problem of youth unemployment. In fact, it tends to trivialize the problem by comparing superficial snapshots of youth unemployment in different countries.

That being said, there’s an excellent segment about lawsuits American young people have filed (and won) against corporations that have exploited them via unpaid internships.

I was also intrigued by the number of countries that deal with youth employment by encouraging young people to emigrate (as we do in New Zealand). In Spain, for example, there are specific programs to assist Spanish youth in locating jobs in the UK. In contrast, Irish youth are encouraged to emigrate to Australia.

Video 3 Young, Jobless and Living at Home is a 2014 BBC documentary about the “boomerang generation,” the growing tendency of young people under thirty to move in with their parents, either because they can’t find jobs or because they can only find low paid, part time and/or temporary work that doesn’t cover their living expenses. Radio DJ Grey James follows six unemployed youth for six months.

The statistics say it all: in 2014 20% of young Brits under thirty were unemployed but twice as many (40%) were living with their parents.

photo credit: Caelie_Frampton via photopin cc

Also published in Veterans Today

The End of Growth

End of Growth

The End of Growth: Adapting to Our New Economic Reality

by Richard Heinberg

(New Society Publishers Aug 2011)

(This is the sixth of a series of posts about stripping private banks of the right to issue money. It stresses the link between our debt-based monetary system and the drive for perpetual economic growth.)

The basic premise of The End of Growth is that the world economy has flat-lined. Not only is it contracting, rather than expanding as most politicians claim, but there are important reasons why it will never return to pre-2007 growth levels. The reason? The last two centuries of continuous economic expansion were only possible due to the ready availability of cheap fossil fuels. Growing fossil fuel scarcity has caused energy costs to skyrocket. And this, according to Heinberg, is the main reason for declining economic growth.

As well as making an strong case that economic expansion has ended, Heinberg also writes about far-sighted governments (Japan, Sweden, Denmark, Norway and Finland) that are enacting policies to ensure the welfare of their citizenry as they confront new economic realities.

Heinberg and others in the Peak Oil/climate change movement have always argued that infinite economic expansion is mathematically impossible on a finite planet with finite natural resources. The End of Growth highlights the massive ecological devastation caused by this reckless obsession with economic growth, while warning that we are depriving our children and grandchildren of natural resources (fossil fuels, water, industrial fertilizers, fish stocks, top soil) that may be needed for basic survival.

In Heinberg’s previous work, he predicts it will take a decade or more before fossil fuel scarcity causes the capitalist economic system to hit the wall. In The End of Growth, he argues it already has: in October 2008. While a few countries can claim an occasional quarter of increased GDP, aggregate global economic growth is either stagnant or slowly contracting. Even China’s so-called economic “miracle” hasn’t been sufficient to generate a genuine increase in total global wealth.

The Ultimate Ponzi Scheme

Heinberg goes on to explain how private banks use the fractional reserve system to invent money out of thin air. In a global economic system where money can only be created by issuing bank loans, there’s never enough money in the system to repay all the debt. This means the global economy can only function via continual creation of new loans. And continuous economic growth is essential to make this happen.

Heinberg’s analysis of the 2008 meltdown starts with an introduction to classical economic theory, and a discussion of of the “financialization” of the US economy that occurred in the 1980s. There’s a detailed discussion of the risky financial derivatives that led to a decade of speculation and “debt” bubbles. The largest was the subprime/derivative boom, in which massive amount of borrowed money was speculated on derivatives and subprime mortgages that couldn’t be repaid. The debt bubble created was so large it plunged the entire world economy into depression when it burst.

The End of Growth in China

Heinberg also presents a painstaking analysis of why the China’s current phenomenal growth rate (7-8% per year) and somewhat slower growth rates in India, Thailand, Malaysia and Vietnam also represent “bubbles” that will eventually pop and trigger recession. China is pursuing the identical economy strategies that caused the Japanese economic miracle to collapse in the 1990s – resulting in a two decade long recession.

Life in a Steady State Economy

Obviously the end of economic growth, and continuing job, wage and benefit cuts mean that people in most industrialized countries will be forced to massively downsize their lifestyles. Outside the US, some far sighted governments are intervening in ways to make this transition less painful. Heinberg gives examples of countries (Japan, Sweden, Denmark, Japan, Norway) who openly acknowledge the reality of their steady state economies and pursue policies that make it easier for their citizens to adjust.

Sweden, for example, has transformed depressed industrial towns into “ecomunicpalities,” by “dematerializing” their economies. They have made them into fossil fuel-free towns with organic farming, public transportation and alternative energy projects – while simultaneously fostering social equity.

The Fallacy of Unlimited Growth

economic growth

An increasing number of environmentalists and economists make the argument that unlimited economic growth is impossible on a finite planet. More importantly, there are clear links between rampant growth and worsening human health and well-being (through toxic pollution and extreme weather events).

In the following interview, Andrew Simms, author of  Cancel the Apocalypse, makes an extremely articulate case for transitioning to a steady state economy. The main argument for a growth-based economy is to lift poor people out of poverty. However, as Simms points out, exponential economic growth only worsens income inequality.

I find it intriguing that David Cameron called for limits to growth while in opposition. Since being elected Britain’s prime minister, he has totally reversed himself.

photo credit: Leader Nancy Pelosi via photopin cc