After wandering around an academic wilderness for 30 or so years, a fella might be forgiven for indulging in a little schadenfreude before the spectacle of the West's recent mind-bending fall from economic grace. But, a veritable John the Baptist of alt-economics, Herman Daly is having a little trouble savoring the sudden relevance of his long-neglected theories of sustainable economics.
"Everyone likes to be proved right, I guess, but there is so much suffering related to this," he explains. "I am very worried about what's going to happen to my children and my grandchildren, and my students are having a terrible time finding work."
Daly is also the grandfather of a school of economic thinking that casts a definitively colder eye on traditional views of the global economic order. He is one of the founders of a discipline within economics that adds another "eco," as inecology, to the issues that should be of concern to practitioners of the dismal science. Daly can be counted among the originators of steady-state economics, studying how global economic systems can comprehensively and effectively benefit humankind without sucking the planet completely—and permanently—dry in the process.
Faced with an unprecedented meltdown of global markets and financial structures, even the once proudly unconventional Barack Obama reaches for the traditional prescription of Keynesian stimulus to move the nation out of the crisis which has engulfed it. What is the plan? One that makes a Daly wince a little.
We are going to grow our way out of economic meltdown, just as in a prior generation we tried to grow our way out of a cultural malaise, and just as we have tried to grow our way out of wealth maldistribution by "rising" all boats—even ones springing great gushing leaks—on an economic tide of apparently limitless growth. Problem is no one has taken a step back to ask if all that growth were healthy for the United States—for the earth itself—or just a kind a consumptive malignancy that would one day devour us. We may have an answer now.
The president has said that the current crisis, serious as it is, also offers great opportunity, and no less a go-go globalist than The New York Times' Tom Friedman likewise devoted a recent column to countercheer for a reevaluation of our role as the grand consumers of the world. But are these guys asking us to examine our collective conscience just so long as it takes us to figure out how to reboot America's newly ailing economic order? "Everyone is just talking about how long it will take to get the economy going again," says Daly.
He has been making the point since at least 1994 when he retired from the World Bank that something more substantial may be required if we are to right this great spaceship we journey upon. Now those academic ruminations have transformed into acute and practical contemporary challenges.
Daly's economic school proposes a future of economic gradualism, a global order that is "slower by design, not by disaster," a system that recognizes that the free market system does some things well and some things, well, not so much. One thing it hasn't managed terrifically is its "sourcing" of the biosphere, where market maximalism means even vast extractive enterprises are captured as economic goods even as they frantically deplete finite resources that ought to be conserved for the future. Daly argues there is such a thing as "uneconomic" growth, that is, growth that is superficially beneficial in that it generates jobs and wealth in the short-term, but that does cumulative, measurable long-term damage to biosystems. "GDP is our idol," Daly wryly notes. "We basically worship it, and eventually that begins to cost more than it's worth."
Relentless growth has been treated as an irrefutable economic good anddevelopment defined as equipping the members of the world's less affluent cultures with all the throwaway marvels and services of the overconsuming corners of the earth. Daly and his fellow travelers propose a planetary order based not on permanent expansion, but on rational distribution and closed economic systems such that the earth's carrying capacity is not ultimately diminished by human economics. This steady-state world he envisions does not require a world in material decline or regional economies dragooned into centrally planned mediocrity. It does make the small observation that environmental depreciation has to be a practical factor in economic blueprinting.
Daly notes that there are now economists and scientists working with the Obama administration who "understand there are such things as limits to growth" at the same time members of the old guard are "advising" the president on how best to restore the old economic disorder. He has simple advice for Barack Obama. "Don't listen to the guys who got us into this mess," he says.