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Daly, Herman. Beyond Growth: The Economics of Sustainable Development. Boston: Beacon Press, 1996 (253 pp.). Daly, a former economist for the World Bank, has become one of the principal spokespersons for the sustainability movement – the idea that humans should not consume resources at a rate that leaves fewer opportunities for future generations. What gives Daly such credibility is his understanding of economics. Many other steady-state advocates tend to fall into the slow-growth, environmental, or even religious sectors; and while they can make persuasive moral arguments, most generally don’t possess a deep understanding of the history, evolution, and current practices of the economics profession. The book, which is a collection of previously published essays and papers, packaged with newer observations, is a sprawling, complicated, ambitious attempt to validate in economic-speak what others have been arguing for decades: that current consumption levels, especially in America, are not sustainable, i.e., that eventually the earth will run out of nonrenewable natural materials people depend on to build homes, power engines, and make meals. Non-economists will have a tough time plowing through some of the chapters, even when Daly provides concrete examples for the layperson to illustrate an economic principle. He disagrees with the way economics is taught in most universities – especially what’s in the textbooks – so his argument must first describe these orthodox theories in order to refute them; that’s where it gets bewildering if one is not trained in economics. Still, Daly’s primary argument is that accepted theory does not account for a limited ecosystem, which he illustrates in a series of related objections: 1) Sustainable development is different from growth. Daly argues that growth by its nature is not sustainable; resources are limited and eventually growth will use them all. Sustainable development focuses on quality enhancements for everyone, not more stuff for a few. He dubs "sustainable growth" an oxymoron. 2) GDP is not a reliable measurement stick. This relates to #1 in that GDP measures growth (the "Gross" part) but not the world’s livability factor or the costs of "G". While "G" has increased, most people’s lives and the ecosystem are not better – in fact, they’re worse. GDP, Daly argues, needs to factor in growth’s costs to the environment, including people (such as when a U.S. corporation moves to Mexico). It currently does not and is therefore not an reliable tool to measure the real economy. 3) Related to this, the basic economic flowchart most people were taught in high school (the circular chart of goods to consumers and back again) is a closed system, which suggests the flow does not function within a larger ecosystem; but it does – goods do not appear from nowhere, and they go back into the environment as waste, i.e. pollution. Again, most financial theories do not frame the micro-economy (buy-sell) within a macro-economy (the environment), only as flow between suppliers and purchasers. 4) Allocation, distribution, and scale are different concepts, usually taught as one or two. The most ignored, scale, is again the relationship of the micro-economy to the entire ecosystem. 5) Worldwide accounting practices are wrong because they book natural resource consumption as income, not depreciation, which it actually is. When Alaska sells a barrel of oil, it’s noted as income in the GDP, which, again, sends the misleading signal that the circular buy-sell chart is a perpetual motion machine. If we depreciate furniture, why not oil? 6) Growth cannot solve world poverty. Implicit in conventional economics is the belief that growth is a leveler – a rising tide lifts all boats, so to speak. Daly maintains that this is not true, and in fact growth exacerbates the gap between the haves and have-nots. Along these lines, he has little good to say about international policies like GATT, NAFTA, and globalism in general, since these free-trade proposals predicated on growth continue to privilege a few while keeping 80% of the population "in its place." Here he parts with his former colleagues at the World Bank and certainly its sister agency, IMF, both of which continue to advocate dismantling trade barriers. Daly will take a concept most people recognize to be true, such as the impossibility of the world’s 6 billion people living at the same consumption level as Americans (who, at 6% of the population use one-third of the earth’s resources), and illustrate how and why, using economic theory and basic arithmetic, our assumption is sound. For people who want that kind of detail to support their convictions, it’s here. The other thing Daly does well is refute the opposition. Daly knows the objections to his theories, so he lays them out and then explains why they don’t hold water. For example, many economists argue that technology will solve the scarcity issue – that we’ll figure out a way to replace oil reserves, forests, clean air and water. Daly argues that technology should do what it can to squeeze more use out of existing resources, to be sure, but it cannot create them, and sometimes schemes that attempt to do just that (sea farming, engineered food, genomics) bring unwanted costs. His analogy is that technological optimists are trying to build a house with fewer trees but more saws. Daly also includes a bit of biography – chapters on two early 20th-century economists who were ahead of their time. His book is not without its ethical convictions; it’s not all math and economics. Underlying the equations and theory is a belief that what we’re doing to the earth, to other species, and, most of all, to the majority of the world’s population, is morally indefensible. To further make that case, Daly ends with a section on religion; this may disappoint readers who don’t find it necessary to inject God or Christianity into this debate, but Daly’s aim is to show that the idea of sustainability is grounded in most religions. Beyond Growth is a challenging read, but worth the effort, and the author touches on many other issues that haven’t been mentioned here, such as population growth and CEO pay. Most people sense Daly’s basic thesis has at least a hint of truth to it – that we’re using up the earth’s resources in the name of consumption, much of which could be classified as a luxury rather than a necessity. In terms of how a sustainable world would look, how it would actually work, how people would live, Daly provides few answers; he believes we possess the know-how to figure that part out if we simply acknowledge the problem, so he’s more interesting in getting the public and policy makers to do that than provide a blueprint for a sustainable world economy.


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