Decades of so called growth economic policies trumpeted by
the neoclassical economists in the west may well come to an
end.We're reaching a point where infinite growing of big business
must cave into the realities of a finite earth resources.
. Cap-auction-trade systems for basic
resources – Cap limits to biophysical scale according to
source or sink constraint, whichever is more stringent. Auction
captures scarcity rents for equitable redistribution. Trade allows
efficient allocation to highest uses.
2. Ecological tax reform – Shift tax base
from value added (labor and capital) and on to “that to which value
is added,” namely the entropic throughput of resources extracted
from nature (depletion), through the economy, and back to nature
(pollution). Internalizes external costs as well as raises revenue
more equitably. Prices the scarce but previously unpriced
contribution of nature.
3. Limit the range of inequality in income
distribution – A minimum income and a maximum income.
Without aggregate growth, poverty reduction requires
redistribution. Complete equality is unfair; unlimited inequality
is unfair. Seek fair limits to inequality.
4. Free up the length of the working day, week
and year – Allow greater option for leisure or personal
work. Full-time external employment for all is hard to provide
without growth.
5. Re-regulate international commerce –
Move away from free trade, free capital mobility and globalization;
adopt compensating tariffs to protect efficient national policies
of cost internalization from standards-lowering competition from
other countries.
6. Downgrade the IMF-WB-WTO to something
like Keynes’ plan for a multilateral payments clearing union,
charging penalty rates on surplus as well as deficit balances –
seek balance on current account, avoid large capital transfers and
foreign debts.
7. Move to 100 percent reserve
requirements instead of fractional-reserve banking. Put
control of money supply and seigniorage in hands of the government
rather than private banks.
8. Enclose the remaining commons of rival natural
capital in public trusts, and price it, while freeing from
private enclosure and prices the non-rival commonwealth of
knowledge and information. Stop treating the scarce as if it were
non-scarce, and the non-scarce as if it were scarce.
9. Stabilize population – Work toward a
balance in which births plus in-migrants equals deaths plus
out-migrants.
10. Reform national accounts – Separate
GDP into a cost account and a benefits account. Compare them at the
margin, stop growing when marginal costs equal marginal benefits.
Never add the two accounts.
This article is adapted from Towards a Steady-State Economy, a
paper Herman Daly wrote for the UK Sustainable Development
Commission in 2008. The complete text can be found at
www.theoildrum.com.