Steady State Economy - Criticisms

Criticisms

Critics of the idea of limits to growth present two main arguments: (1) technological progress and gains in efficiency can overcome the limits to growth, and (2) the economy can be de-materialized so that it grows without using more and more resources. These can be called the technological optimist and decoupling arguments respectively.

Decoupling means achieving higher levels of economic output with lower levels of material and energy input. Proponents of decoupling cite transition to an information economy as proof of decoupling. Evidence shows that economies have achieved some success at relative decoupling. As an example, the amount of carbon dioxide emitted per dollar of economic production has decreased over time. But those gains have come amidst the background condition of increasing GDP. Even with decreases in the resource intensity of GDP, economies are still using more resources. Carbon dioxide emissions from fossil fuels have increased by 80% since 1970.

Ecological economists also observe that an economy is structured like an ecosystem – it has a trophic structure that controls flows of energy and materials. In nature, the producers are plants, which literally produce their own food in the process of photosynthesis. Herbivores consume plants, and carnivores consume herbivores. Omnivores may eat plants or animals, and some species function as service providers, such as scavengers and decomposers. The human economy follows the same natural laws. The producers are the agricultural and extractive sectors, such as logging, mining, and fishing. Surplus in these sectors allows for the division of labor, economic growth, and the flow of resources to other economic sectors. Analogous to herbivores, some economic sectors, such as manufacturing, consume the raw materials of the producers. Higher level manufacturers are analogous to carnivores. The economy also features service providers, such as chefs, janitors, bankers, and purveyors of information. The key point is that the economy tends to grow as an integrated whole. More manufacturing and more services requires more agricultural and extractive surplus. The trophic structure of the economy puts limits on how much of an economy's resources can be dedicated to creating and distributing information.

Both technological optimists and proponents of decoupling cite efficiency of resource use as a way to mitigate the problems associated with economic growth. But history has shown that when technological progress increases the efficiency with which a resource is used, the rate of consumption of that resource actually tends to rise. This phenomenon is called the Jevons Paradox.

Some critics of zero growth claim that it does not go far enough. Degrowth and fundamental changes to our economic system are needed to attain sustainability.