Page lORAIN May 1979 Steady-State Economics, Herman Daly, 1977, $5.95 from: W. H. Freeman & Co. 660 Market Street San Francisco, CA 94104 Don't, like me, confuse this with Daly's earlier Toward a Steady-State Economy. It's his secolld book, and a classic. It should' be required reading for anyolle wanting to understand the basic changes needed today in our economic thinking. Necessary institutional changes in their simplest, most direct form. How to include tbe free work lIature does for us into our economic accounting. How to replace GNP witb meaningful accounting indices. A/ld much more. Best economics stliff since Sm,tll Is Beautiful. Highly recommended. - TB · . . The implication is that man is no longer totally dependent upon his environment, or at least that he has become less dependent. Presumably, technology has made man increasingly independent of his environment. But in fact, technology has merely substituted nonrenewable resources for renewables, which is more an increase than a decrease in dependence. .. . · .. Growth in GNP should cease when decreasing marginal benefits become equal to increasing marginal costs.... But there is no statistical series that attempts to measure the cost of GNP. This is growthmania, literally not counting the costs of growth. But the situation is even worse. We take the real costs of increasing GNP as measured by the defensive expenditures incurred to protect ourselves from the unwanted side effects of production .and add these expenditures to GNP rather than subtract them. We count real costs as benefits. This is hypergrow~hmania.. .. · .. The other reason for [focus on income rather than wealth] is ideological. Concentrating on flows takes attention away from the very unequally distributed stock of wealth that i the real source of economic power. The income flow is unequally distributed also, but at least everyone gets some part of it. . .. · . . "Growth is a substitute for equality of income. So long as there is growth there is hope, and that makes large income differentials tolerable." We are addicted to growth because we are addicted to large inequalities in income and wealth. What about the poor? Let them eat growth! Better yet, let them feed on the hope of eating growth in the futu re! We have been growing for some time, and we still have poverty. It should be obvious that what grows is the reinvested surplus, and the benefits of growth go to the owners of the surplus, who are not poor. Some of the growth dividends trickle down, but not many.... Perhaps, as a minimum definition, the ultimate benefit could be considered as the survival and continuation of the evolving life process through which God has bestowed upon us the gift of conscious life. "Men nearly always speak and write as if riches were'absolute, and it were possible, by following certain scientific precepts, for everyone to be rich. Whereas, riches are a power like that of electricity, acting only through inequalities or negations of itsel f. The force of the guinea you have in your pocket depends wholly on the default of a guinea in your neighbor's pocket. If he did not want it, it would be of no usc to YOU; the degree of power it possesses depends accurately upon the need or desire he has for it, and the art of making yourself rich, in the ordinary mercantile economist's sense, is therefore equally and necessarily the art of keeping your neighbor poor." John Ruskin, 1860 Stearoring the State "Now it is true that the needs of human beings may seem to be insatiable. But they fall into two classes-those needs which are absolute in the sense that we feel them whatever the situation of our fellow human beings may be, and those which are relative in the sense that we feel them only if their satisfaction lifts us above, makes us feel superior to, our fellows. Needs of the second class, those which satisfy the desire for superiority, may be indeed insatiable: for the higher the general level, the higher still are they. But this is not so true of the absolute needs- a point may soon be reached, much sooner perhaps than we are all of us aware, when these need are satisfied in the sense that we prefer to devote our further energies to non-economic purposes." ]. M. Keynes, 1931.. The upshot is that in orthodox economics all scarcity is cc)nsidered merely relative, while the class of all wantSis accorded the insatiability of relative wants but is invested with the moral earnestness of absolute wants. Higher prices on basic resources are absolutely necessary. Any plan that refuses to face up to this necessity is WOrt hless. Back in 1925, economist John Ise made the point in these words: "Preposterous as it may seem at first blush, it is probably true that, even if all the timber in the United States, or all the oil or gas or anthracite, were owned by an absolute monopoly, entirely free of public control, prices to consumers would be fixed lower than the long-run interests of the public would justify. Pragmatically this means that all efforts on the part of the government to keep down the prices of lumber, oil, gas, or anthracite are contrary to the public interest; that the government should be trying to keep prices up rather than down." Ise went on to suggest a general principle of resource pricing: that nonrenewable resources be priced at the co'~t of the nearest renewable substitute. Therefore, virgin timber should cost at least as much per board foot as replanted timber; petroleum should be priced at its BTU equivalent of sugar or wood alcohol, assuming they arc the closest renewable alternatives. In the absence of any renewable substitutes, the price would merely reflect the purely ethical judgment of how fast the resources should be used up- that is, the importance of the wants of future people relative to the wants of present people. ... development historically is primarily the result of attempts to increase the output from the environmem rather than produce a given output m<)re efficiently. The price of growing· beyond our ecological niche is tha.t the workload incTe.ases. As the workload increases, the development of labor-saving techniques becomes necessary. These adaptations do not necessarily increase efficiency above what it was before the adaptation became necessary. ... A job that is not worth doing is not worth doing well. In economists' jargon the marginal benefit of an improvement in purpose is enormously greater than the marginal benefit of an improvement in technology. Ano the marginal costs are enormouslv lower.
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