Moving from a Failed Growth Economy to Steady-State Economy

Herman Daly

“Scientific and philosophical systems come and go. And each method of limited understanding is at length exhausted. In its prime each system is a triumphant success; in its decay it is an obstructive nuisance.” –A. N. Whitehead 1

A steady-state economy is incompatible with continuous growth – either positive or negative growth. The goal of a steady state is to sustain a constant, sufficient stock of real wealth and people for a long time. A downward spiral of negative growth, a depression, is a failed growth economy, not a steady-state economy. Halting downward spiral is necessary, but is not the same thing as resuming continuous positive growth. The growth economy now fails in two ways: (1) positive growth becomes uneconomic in our full- world economy; (2) negative growth, resulting from the bursting of financial bubbles inflated beyond physical limits, though temporarily necessary, soon becomes self-destructive. That leaves a non-growing or steady-state economy as the only long run alternative. The level of physical wealth that the biosphere can sustain in a steady state is almost certainly below the present level. The fact that recent efforts at growth have resulted mainly in bubbles is evidence that this is so. Nevertheless, current policies all aim for the full re- establishment of the growth economy. No one denies that our problems would be easier to solve if we were richer. That rich is better than poor is a definitional truism. The question is, does growth any longer make us richer, or is it now making us poorer?

I will spend a few more minutes cursing the darkness of growth, but will then try to light ten little candles along the path to a steady state. Some advise me to forget the darkness and focus on the policy candles. But I find that without a dark background the light of my little candles is not visible in the false dawn projected by the economists, whose campaigning optimism never gives hope a chance to shine.

We have many problems (poverty, unemployment, environmental destruction, budget deficit, trade deficit, bailouts, bankruptcy, foreclosures, etc.), but apparently only one solution: economic growth, or as the pundits now like to say, “to grow the economy”– as if it were a potted plant.

But let us stop right there and ask two questions that all students should put to their economics professors.

First, there is a deep theorem in mathematics that says when something grows it gets bigger! So, when the economy grows it too gets bigger. How big can the economy be, Professor? How big is it now? How big should it be? Have economists ever considered these questions? And most pointedly, what makes them think that growth (i.e., physical expansion of the economic subsystem into the finite containing biosphere), is not already increasing environmental and social costs faster than production benefits, thereby becoming uneconomic growth, making us poorer, not richer? After all, real GDP, the measure of “economic” growth so-called, does not separate costs from benefits, but conflates them as “economic” activity. How would we know when growth became uneconomic? Remedial and defensive activity becomes ever greater as we grow from an “empty-world” to a “full-world”, (a world full of us and our stuff) characterized by congestion, interference, displacement, depletion and pollution. The defensive expenditures induced by these negatives are all added to GDP, not subtracted. Be prepared, students, for some hand waving, throat clearing, and subject changing. But don’t be bluffed.

We must recognize that many developing countries are still in the phase of truly economic growth—their marginal benefits of growth are still greater than their marginal costs. Yet the world as a whole is “full”. Therefore the duty of limiting growth, and the policies discussed below, apply first to the richer countries where in fact growth has become uneconomic. The rich must free up ecological space for the poor to grow into, leading to a process of convergence to a common level of resource use that is sufficient for a good (not luxurious) life and sustainable for a long (not infinite) future. Some worry that slowing growth in rich countries will hurt poor countries by reducing their export markets. That just means that developing countries will have to shift from the export-led model back toward the import-substitution model, developing their own internal markets. Nor can rich countries continue to off- shore production and jobs in the face of their own high unemployment rates.

Second question; do you then, Professor, see growth as a continuing process, desirable in itself– or as a temporary process required to reach a sufficient level of wealth, that would thereafter be maintained more or less in a steady state? At least 99% of modern neoclassical economists hold the growth forever view. We have to go back to John Stuart Mill and the earlier Classical Economists to find serious treatment of the idea of a non-growing economy, the Stationary State. What makes modern economists so sure that the Classical Economists were wrong? Just dropping history of economic thought from the curriculum is not a refutation!

Here are some reasons to think the Classical Economists are right. A long run norm of continuous growth could make sense, only if one of the three following conditions were true:

1. the economy were not an open subsystem of a finite and non- growing biophysical system,
2. the economy were growing in a non physical dimension, or
3. the laws of thermodynamics did not hold.

Let us consider each of these three logical alternatives. (If you can think of a fourth one let me know)

1. Some economists in fact think of nature as the set of extractive subsectors of the economy (forests, fisheries, mines, wells, pastures, and even agriculture….). The economy, not the ecosystem or biosphere, is seen as the whole; nature is a collection of parts. If the economy is the whole then it is not a part of any larger thing or system that might restrain its expansion. If some extractive natural subsector gets scarce we will just substitute other sectors for it and growth of the whole economy will continue, not into any restraining biospheric envelope, but into sidereal space presumably full of resource-bearing asteroids and friendly highly-evolved aliens eager to teach us how to grow forever into their territory. Sources and sinks are considered infinite.
2. Some economists say that what is growing in economic growth is value, and value is not reducible to physical units. The latter is true of course, but that does not mean that value is independent of physics! After all, value is price times quantity, and quantity is always basically physical. Even services are always the service of something or somebody for some time period, and people who render services have to eat. The unit of measure of GDP is not dollars, but dollar’s worth. A dollar’s worth of gasoline is a physical amount, currently about a fourth of a gallon. The aggregation of the dollar’s worth amounts of many different physical commodities (GDP) does not abolish the physicality of the measure even though the aggregate can no longer be expressed in physical units. True, ($/q) x q = $. But the fact that q cancels out mathematically does not mean that the aggregate measure, “dollars’ worth”, is just a pile of dollars. GDP is a value- weighted index of real quantities. And it doesn’t help to speak instead of “value added” (by labor and capital) because we must ask, to what is the value added? And the answer is natural resources, low-entropy matter/energy—not fairy dust or frog’s hair! Development (squeezing more welfare from the same throughput of resources) is a good thing. Growth (pushing more resources through a physically larger economy) is the problem. Limiting quantitative growth is the way to force qualitative development as the path of progress.
3. If resources could be created out of nothing, and wastes could be annihilated into nothing, then we could have an ever-growing resource throughput by which to fuel the continuous growth of the economy. But the first law of thermodynamics says NO. Or if we could just recycle the same matter and energy through the economy faster and faster we could keep growth going. The circular flow diagram of many economics principles texts unfortunately comes very close to affirming this. But the second law of thermodynamics says NO.

So – if we can’t grow our way out of all problems, then maybe we should reconsider the logic and virtues of non-growth, the steady-state economy. Why this refusal by neoclassical economists both to face common sense, and to reconsider the ideas of the early Classical Economists?

I think the answer is distressingly simple. Without growth the only way to cure poverty is by sharing. But redistribution is anathema. Without growth to push a hoped for demographic transition, the only way to cure overpopulation is by population control. A second anathema. Without growth the only way to increase funds to invest in environmental repair is by reducing current consumption. Anathema number three. Three anathemas and you are out!

And without growth how will we build up arsenals to protect democracy (and remaining petroleum reserves)? How will we go to Mars and Saturn and “conquer” space? Where can technical progress come from if not from unintended spin-offs from the military and from space research? Gnostic techno-fantasies of colonizing outer space, partially turning off the sun to make more room for greenhouse gasses in the atmosphere, and of abolishing disease and death itself, feed on the perpetual growth myth of no limits. Digital-brained tekkies, who have never heard of the problem of evil, see heaven on earth just around the corner –“let’s build a smarter planet”, IBM

modestly suggests. How about some smarter economists first? Without growth we must face the difficult religious task of finding a different god to worship. The communist growth-god has already failed. Surely the capitalist growth-god will not fail! Let’s jump-start the GDP and the Dow-Jones! Let’s build another tower of Babel with obfuscating technical terms like sub-prime mortgage, derivative, securitized investment vehicle, collateralized debt obligation, credit default swap, “toxic” assets, etc.

Well, let us not do that. Let us ignore the anathemas and instead think about what policies would be required to move to a steady-state economy. They are a bit radical by present standards, but not insanely unrealistic as are the three alternatives for validating continuous growth, just discussed.

Let us look briefly at ten specific policy proposals for moving from our unsustainable growth economy to a steady-state economy. A steady-state economy is one that develops qualitatively (by improvement in science, technology, and ethics) without growing quantitatively in physical dimensions; it lives on a diet–a constant metabolic flow of resources from depletion to pollution (the entropic throughput) maintained at a level that is within the assimilative and regenerative capacities of the ecosystem of which the economy is a subsystem.

The policies recommended are more sensible than the current policies of “growth forever”—especially after growth has become uneconomic in the basic sense of costing more than it is worth at the margin. Ten is an arbitrary number—just a way to get specific. Although, the whole package fits together in the sense that some policies supplement and balance others, most of them could be adopted singly and gradually.

1. Cap-auction-trade systems for basic resources.

   Caps limit biophysical scale by quotas on depletion or pollution, whichever is more limiting. Auctioning the quotas captures scarcity rents for equitable redistribution. Trade allows efficient allocation to highest uses. This policy has the advantage of transparency. There is a limit to the amount and rate of depletion and pollution that the economy can be allowed to impose on the ecosystem. Caps are quotas, limits to the throughput of basic resources, especially fossil fuels. The quota usually should be applied at the input end because depletion is more spatially concentrated than pollution and hence easier to monitor. Also the higher price of basic resources will induce their more economical use at each upstream stage of production, as well as at the final stage of consumption. It may be that the effective limit in use of a resource comes from the pollution it causes rather than from depletion—no matter, we indirectly limit pollution by restricting depletion of the resource that ultimately is converted into wastes. Limiting barrels, tons, and cubic feet of carbon fuels extracted per time period will limit tons of CO2 emitted per time period. Only very toxic or spatially concentrated wastes require separate (and geographically specific) pollution quotas.

   This scale limit serves the goal of biophysical sustainability. Ownership of the quotas is initially public—the government auctions them to the individuals and firms. The revenues go to the treasury and are used to replace regressive taxes, such as the payroll tax, and to reduce income tax on the lowest incomes. Once purchased at auction the quotas can be freely bought and sold by third parties, just as can the resources whose rate of depletion they limit. The trading allows efficient allocation; the auction serves just distribution, and the cap serves the goal of sustainable scale—three goals, three policy instruments. The same logic can be applied to limiting the off-take from renewable resources, such as fisheries and forests. With renewables the quota should be set to approximate sustainable yield. For non renewables sustainable rates of absorption of resulting pollution, or of the development of renewable substitutes may provide a criterion.

2. Ecological tax reform

   Shift the 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), and returned to nature (pollution). This internalizes external costs as well as raises revenue more equitably. It prices the scarce but previously un-priced contribution of nature. Value added is something we want to encourage, so stop taxing it. Depletion and pollution are things we want to discourage, so tax them. Ecological tax reform can be an alternative or a supplement to cap-auction-trade systems. Value added is simultaneously created and distributed in the very process of production.

   Therefore, economists argue that there is no “pie” to be independently distributed according to ethical principles. As Kenneth Boulding put it, instead of a pie, there are only a lot of little “tarts” consisting of the value added by different people or different countries, and blindly aggregated by statisticians into an abstract “pie” that doesn’t really exist as an undivided totality. If one wants to redistribute this imaginary “pie” he should appeal to the generosity of those who baked larger tarts to share with those who baked smaller tarts, not to some invidious notion of equal participation in a fictitious common inheritance.

   I have considerable sympathy with this view, as far as it goes. But it leaves out something very important.

   In our one-eyed focus on value added we economists have neglected “that to which value is added”, namely the flow of resources and services from nature. “Value added” by labor and capital has to be added to something, and the quality and quantity of that something is important. Now there is a real and important sense in which the original contribution of nature is indeed a “pie”, a pre-existing, undivided totality that we all share as an inheritance. It is not an aggregation of little tarts that we each baked ourselves. Rather it is the seed, soil, air, sunlight, and rain (not to mention the gene pools and suitable climate) from which the wheat and apples grew that we converted into tarts by our labor and capital. The claim for equal access to nature’s gifts is not the invidious coveting of what our neighbor accumulated by her own labor and abstinence. The focus of our demands for income to redistribute to the poor, therefore, should be on the value of the contribution of nature, the original value of that to which further value is added by labor and capital. People generally resent seeing the value they added by their own labor and enterprise taxed away, although they accept it to some degree as necessary. But they do not resent seeing the value freely added by nature taxed away. Rather they resent seeing it accrue as unearned income (scarcity rents) to owners who added no value to what nature provided.

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 the range of inequality. The civil service, the military, and the university manage with a range of inequality of a factor of 15 or 20. Corporate America has a range of 500 or more. Many industrial nations are below 25. Could we not limit the range to, say, 100, and see how it works? This might mean a minimum of 20 thousand dollars and a maximum of two million. Is that not more than enough to compensate real differences? People who have reached the limit could either work for nothing at the margin if they enjoy their work, or devote their extra time to hobbies or public service. The demand left unmet by those at the top will be filled by those who are below the maximum. A sense of community, necessary for democracy, is hard to maintain across the vast income differences current in the US. Rich and poor separated by a factor of 500 become almost different species, having few experiences or interests in common. The main justification for such differences has been that they stimulate growth, which will one day make everyone rich. This may have had superficial plausibility in an empty world, but in our full world it is a fairy tale. I have advocated a maximum income as well as a minimum income for a long time. The maximum part has been very unpopular, but thanks to the banksters and their bonuses it is now becoming more acceptable.

4. Free up the length of the working day, week, and year

   Allow greater option for part-time or personal work. Full-time external employment for all is hard to provide without growth. Other industrial countries have much longer vacations and maternity leaves than the US. For the Classical Economists the length of the working day was a key variable by which the worker (self-employed yeoman or artisan) balanced the marginal disutility of labor with the marginal utility of income and of leisure so as to maximize enjoyment of life. Under industrialism the length of the working day became a parameter rather than a variable (and for Karl Marx was the key determinant of the rate of exploitation). We need to make it more of a variable subject to choice by the worker. Milton Friedman wanted “Freedom to Choose”—OK, here is an important choice most of us are not allowed to make! And we should stop biasing the labor–leisure choice by advertising to stimulate more consumption and more labor to pay for it. At a minimum advertising should no longer be treated as a tax-deductible ordinary expense of production. Is it really a good thing to subsidize the expenditure of billions of dollars to convince people buy things they don’t need, with money they don’t have, to impress people they don’t know?

5. Re-regulate international commerce

   Move away from free trade, free capital mobility, and globalization. Cap-auction-trade, ecological tax reform and other national measures that internalize environmental costs will raise prices and put us at a competitive disadvantage in international trade with countries that do not internalize costs. We should adopt compensating tariffs to protect, not inefficient firms, but efficient national policies of cost internalization from standards-lowering competition with foreign firms that are not required to pay the social and environmental costs they inflict. This “new protectionism” is very different from the “old protectionism” that was designed to protect a truly inefficient domestic firm from a more efficient foreign firm. We cannot integrate with the global economy and at the same time have higher wages, environmental standards, and social safety nets than the rest of the world. Trade and capital mobility must be balanced and fair, not deregulated or “free”. We should recognize the interdependence of separate national economies, but reject integration into a single global economy. The first rule of efficiency is “count all the costs”—not “free trade”, which coupled with free capital mobility leads to a standards- lowering competition to count as few costs as possible. Tariffs are also a good source of public revenue. This will run afoul of the WTO-WB-IMF , so….

6. Downgrade the WTO-WB-IMF

   To something like Keynes’s original plan for a multilateral payments clearing union, charging penalty rates on surplus as well as deficit balances with the union—seek balance on current account, and thereby avoid large foreign debts and capital account transfers. For example, under Keynes’s plan the US would pay a penalty charge to the clearing union for its large deficit with the rest of the world, and China would also pay a similar penalty for its surplus. Both sides of the imbalance would be pressured to balance their current accounts by financial penalties, and if need be by exchange rate adjustments relative to the clearing account unit, called the “bancor” by Keynes. The bancor would also serve as world reserve currency, a privilege that should not be enjoyed by any national currency, including the US dollar. Reserve currency status for the dollar is a benefit to the US—rather like a truck load of free heroin is a benefit to an addict. The bancor would be like gold under the gold standard, only you would not have to dig it out of the ground.

   The IMF preaches free trade based on comparative advantage, and has done so for a long time. More recently the WTO-WB-IMF have started preaching the gospel of globalization, which, in addition to free trade, means free capital mobility internationally. The classical comparative advantage argument, however, explicitly assumes international immobility of capital.2 When confronted with this contradiction the IMF waves its hands, suggests that you might be a xenophobe, and changes the subject. The WTO-WB-IMF contradict themselves in service to the interests of transnational corporations and their policy of off-shoring production and falsely calling it “free trade”. International capital mobility, coupled with free trade, allows corporations to escape from national regulation in the public interest, playing one nation off against another. Since there is no global government they are in effect uncontrolled. The nearest thing we have to a global government (WTO-WB- IMF) has shown no interest in regulating transnational capital for the common good.

7. Move away from fractional reserve banking toward a system of 100% reserve requirements

   This would put control of the money supply and seigniorage (profit made by the issuer of fiat money) in hands of the government rather than private banks, which would no longer be able to live the alchemist’s dream by creating money out of nothing and lending it at interest. All quasi-bank financial institutions should be brought under this rule, regulated as commercial banks subject to 100% reserve requirements. Banks would earn their profit by financial intermediation only, lending savers’ money for them (charging a loan rate higher than the rate paid to savings or “time-account” depositors) and charging for checking, safekeeping, and other services. With 100% reserves every dollar loaned to a borrower would be a dollar previously saved by a depositor (and not available to him during the period of the loan), thereby re- establishing the classical balance between abstinence and investment. With credit limited by saving (abstinence from consumption) there will be less lending and borrowing and it will be done more carefully—no more easy credit to finance the massive purchase of “assets” that are nothing but bets on dodgy debts. To make up for the decline in bank-created, interest-bearing money the government can pay some of its expenses by issuing more non interest- bearing fiat money. However, it can only do this up to a strict limit imposed by inflation. If the government issues more money than the public voluntarily wants to hold, the public will trade it for goods, driving the price level up. As soon as the price index begins to rise the government must print less and tax more. Thus a policy of maintaining a constant price index would govern the internal value of the dollar. The external value of the dollar could be left to freely fluctuating exchange rates (or preferably to the rate against the bancor in Keynes’s clearing union).

   How would the 100% reserve system serve a steady-state economy? First, as just mentioned it would restrict borrowing for new investment to existing savings, greatly reducing speculative growth ventures—for example the leveraging of stock purchases with huge amounts of borrowed money (created by banks ex nihilo rather than saved out of past earnings) would be severely limited. Down payment on houses would be much higher, and consumer credit would be greatly diminished. Credit cards would become debit cards. Growth economists will scream, but a steady-state economy does not aim to grow.

   Second, the money supply no longer has to grow in order for people to pay back the principal plus the interest required by the loan responsible for the money’s very existence in the first place. The repayment of old loans with interest continually threatens to diminish the money supply unless new loans compensate. With 100% reserves money becomes neutral with respect to growth rather than biasing the system toward growth by requiring more loans just to keep the money supply from shrinking.

   Third, the financial sector will no longer be able to capture such a large share of the nation’s profits (around 40%!), freeing some smart people for more productive, less parasitic, activity.

   Fourth, the money supply would no longer expand during a boom, when banks like to loan lots of money, and contract during a recession, when banks try to collect outstanding debts, thereby reinforcing the cyclical tendency of the economy.

   Fifth, with 100% reserves there is no danger of a run on the bank leading to failure, and the FDIC could be abolished, along with its consequent moral hazard. The danger of cascading collapse of the whole credit pyramid due to the failure of one or two “too big to fail” banks would be eliminated. Congress then could not be frightened into giving huge bailouts to some banks to avoid the “contagion” of failure.

   Sixth, the explicit policy of a constant price index would reduce fears of inflation and the resultant quest to accumulate more as a protection against inflation.

   Seventh, a regime of fluctuating exchange rates (or Keynes’ clearing union) automatically balances international trade accounts, eliminating big surpluses and deficits. US consumption growth would be reduced without its deficit; Chinese production growth would be reduced without its surplus. By making balance of payments lending unnecessary fluctuating exchange rates would greatly shrink the role of the IMF and its “conditionalities”.

   To dismiss such sound policies as “extreme” in the face of the demonstrated fraudulence of our current financial system is quite absurd. The idea is not to nationalize banks, but to nationalize money, which is a natural public utility in the first place. The leading economists of the 1920s (Irving Fisher, Frank Knight) favored 100% reserves, along with Frederick Soddy, Nobel Laureate in chemistry and underground economist. The fact that this idea is hardly discussed today is testimony to the power of vested interests over good ideas.

8. Stop treating the scarce as if it were non-scarce, and the non-scarce as if it were scarce

   Enclose the remaining open-access commons of rival natural capital (e.g. atmosphere, electromagnetic spectrum, public lands) in public trusts, and price it by a cap-auction–trade systems, or by taxes — while freeing from private enclosure and prices the non-rival commonwealth of knowledge and information. Knowledge, unlike the resource throughput, is not divided in the sharing, but multiplied. Once knowledge exists, the opportunity cost of sharing it is zero, and its allocative price should be zero. International development aid should more and more take the form of freely and actively shared knowledge, along with small grants, and less and less the form of large interest-bearing loans. Sharing knowledge costs little, does not create un-repayable debts, and it increases the productivity of the truly rival and scarce factors of production. Of course sharing false knowledge (a non rival “bad”) is a danger, amply demonstrated by many growth-based “structural adjustment” programs 3. Existing real knowledge is the most important input to the production of new knowledge, and keeping it artificially scarce and expensive is perverse. Patent monopolies (aka “intellectual property rights”) should be given for fewer “inventions”, and for fewer years. Costs of production of new knowledge should, more and more, be publicly financed and then the knowledge freely shared. Knowledge is a cumulative social product and we have the discovery of the laws of thermodynamics, the double helix, the polio vaccine, etc without patent monopolies and royalties.

9. Stabilize population

   Work toward a balance in which births plus in-migrants equals deaths plus out-migrants. This is controversial and difficult, but as a start contraception should be made available for voluntary use everywhere. And while each nation can debate whether it should accept many or few immigrants, and who should get priority, such a debate is rendered moot if immigration laws are not enforced. We should support voluntary family planning, and enforcement of reasonable immigration laws, democratically enacted. A lot of the pro-natalist and open-borders rhetoric claims to be motivated by generosity. Perhaps it is, but in effect it turns out to be “generosity” at the expense of the US working class and to the benefit of the employing class—an elitist cheap labor policy. The federal government, ever sensitive to the interests of the corporate employing class, has done an obligingly poor job of enforcing our immigration laws. Progressives have been slow to understand this. The environmental movement began with a focus on population, but has for some years now given in to “political correctness” on this issue. Ironically our tolerance for illegal immigration seems to have caused a compensatory tightening up on legal immigrants—longer waiting periods and more stringent requirements. In cost-benefit terms it is cheaper to “enforce” our immigration laws against those who obey them than against those who break them—but quite unfair, and perceived as such by many legal immigrants and people attempting to immigrate legally. This is a very perverse selection process for new residents.

10. Reform national accounts

Separate GDP into a cost account and a benefits account. Natural capital consumption and “regrettably necessary defensive expenditures” belong in the cost account. Compare costs & benefits of a growing throughput at the margin, stop throughput growth when marginal costs equal marginal benefits. In addition to this objective approach, recognize the importance of the subjective studies that show that, beyond a threshold, further GDP growth does not increase self-evaluated happiness. Beyond a level already reached in many countries GDP growth delivers no more happiness, but continues to generate depletion and pollution. At a minimum we must not just assume that GDP growth is economic growth, but prove that it is not uneconomic growth.

The conceptual change in vision from the norm of a growth economy to that of a steady state economy is radical, but the policies advocated are subject to gradual application. For example, 100% percent reserves can be approached gradually, the range of distributive inequality can be restricted gradually, caps can be adjusted gradually, etc.

Also these measures are based on the impeccably conservative institutions of private property and decentralized market allocation. The policies advocated simply recognize that: (1) private property loses its legitimacy if too unequally distributed; (2) markets lose their legitimacy if prices do not tell the truth about opportunity costs; and (3) that the macro-economy becomes an absurdity if its scale is required to grow beyond the biophysical limits of the Earth. Well before reaching that radical biophysical limit we are encountering the orthodox economic limit in which extra costs of growth become greater than the extra benefits, ushering in the era of uneconomic growth, so far denied by the regnant growth paradigm, which seems intent on fulfilling the role of obstructive nuisance described in Whitehead’s epigraph.

1 The epigraph from Whitehead is respectfully repeated from K. William Kapp’s prescient book of 1948, The Social Costs of Private Enterprise. That the same quotation (as well as Kapp’s arguments) should be as relevant in 2012 as it was in 1948, is a sad reflection on economists’ predilection for the role of obstructive nuisance.

2 See H. Daly,“The Perils of Free Trade”, Scientific American, November, 1993, Vol. 269, No. 5, pp. 50-57.

3 See H. Daly, “Growth and Development: Critique of a Credo”, in Population and Development Review, 34 (3), September, 2008.

Herman E. Daly is Professor Emeritus at the School of Public Policy, University of Maryland. Source: Towards an Integrated Paradigm in Heterodox Economics, Julien-François Gerber, et al., eds., Palgrave-Macmillan, 2012.