Posted on July 7, 2015 @ 11:46:00 AM by Paul Meagher
I'm spending more time thinking about Herman Daly's article, Economics in a Full World, and decided to devote another blog to it (see previous blog). In this blog I want to explore one of his ideas in some more detail, namely, the idea that the economy should have a goal. I was inspired to write this blog when I read this "goal of the economy" passage:
The goal of the economy is to minimize the low-entropy used up to attain a sufficient standard of living—by sifting it slowly and carefully through
efficient technologies aimed at important purposes. The economy should not be viewed as an idiot machine dedicated to maximizing waste. Its ultimate
purpose is the maintenance and enjoyment of life for a long time (not forever) at a sufficient level of wealth for a good (not luxurious) life.
Later, Daly argues against the idea that the goal of the economy should be growth:
The empty world has rapidly turned into a "full" world thanks to growth, the number one goal of all countries—capitalist, communist, or in-between.
Since the mid-twentieth century, the world population has more than tripled—from two billion to over seven billion. The populations of cattle,
chickens, pigs, and soybean plants and corn stalks have as well. The non-living populations of cars, buildings, refrigerators, and cell phones
have grown even more rapidly. All these populations, both living and non-living, are what physicists call "dissipative structures" — that is, their
maintenance and reproduction require a metabolic flow, a throughput that begins with depletion of low-entropy resources from the ecosphere and ends
with the return of polluting, high-entropy waste back to the ecosphere. This disrupts the ecosphere at both ends, an unavoidable cost necessary
for the production, maintenance, and reproduction of the stock of both people and wealth. Until recently, standard economic theory ignored the
concept of metabolic throughput, and, even now, its importance is greatly downplayed.
If growth is not to be the ultimate goal of the economy, then what is? To think about this question, Daly suggests we use an "ends-mean pyramid" that looks like this:
The pyramid works like this:
At the base of the pyramid are our ultimate means (low-entropy matter-energy)—that which we require to satisfy our wants, but which we cannot make,
only use up. We use these ultimate means directly, guided by technology, to produce intermediate means (e.g., artifacts, commodities, services) that
directly satisfy our needs. These intermediate means are allocated by political economy to serve our intermediate ends (e.g., health, comfort,
education), ethically ranked by how strongly they contribute to the Ultimate End under existing circumstances. We can perceive the Ultimate End
only vaguely, but in order to ethically rank our intermediate ends, we must compare them to some ultimate criterion. We cannot avoid philosophical
and theological inquiry into the Ultimate End just because it is difficult. To prioritize requires that something go in first place.
So what is the Ultimate End of the economy? I would argue that resilience is a leading candidate. In Dennis Meadow's accompanying viewpoint article, Growing, Growing, Gone: Reaching the Limits, he argues for the importance of resilience this way:
In my own work, I have shifted from a preoccupation with sustainable development, which is somewhat of an oxymoron, toward the concept of resilience. I think that is the future: to understand how different scales—the household, the community, the school––can structure themselves in a way to become more resilient in the face of the shocks that are inevitable regardless what our goals might be.
You see the climate debate evolving this way. Talk about prevention is on the wane, giving way to talk of adaptation. Adaptation really means resilience. It is about designing actions for dealing with New York City the next time superstorms threaten to paralyze the city or for figuring out what California can do if the current drought continues for many more years, or even decades.
Aspirations and good fortune will get us only so far. Human survival cannot risk reliance on them alone
Resilience is one idea for the Summum Bonum of economics. Governments are actually very active in this area and it may be the private sector that will have to start catching up to meet their vision. The private sector does not always lead the way.
Permaculture has also been critical of growth culture and offers many practical ideas for increasing resilience at different scales. In this video, Permaculture co-founder David Holmgren discusses the future and the ways we might adapt our thinking and actions to accommodate it.