stationary state. As early as 1776, Adam Smith, the founding father of economics,
wrote about the stationary state of the economy in his much acclaimed book titled An
Inquiry into the Nature and Causes of the Wealth of Nations.” He proposed the
concept that a stationary state economy would lead to poverty. His conclusion
stated: Only growth can ensure the realization of wealth (Smith 2005).
Daly understands a steady-state economy to be “an economy that does not grow
nor shrink physically in the long run” (Daly 2005, p. 125). In contrast to Smith and
representatives of neoclassical theory, he is convinced that beyond a certain point,
quantitative growth not only reaches its limits but is also uneconomical and provides
the following case as an example: A company or even a household strives for the
optimal level of economic activity. When this level is exceeded by further activities,
it may happen that additional costs (marginal costs) exceed the additional benefits
(marginal benefits). Daly refers to this situation as uneconomical. In macroeconomic
terms, he aggregates the base measures. There is rising consumption of natural
resources (green flow) in order to produce more material goods (brown flow). In
other words: “As we expand brown flow, we reduce green flow” (Daly 1999, p. 5).
The result is “uneconomic growth.” So, in this sense, to the representatives of
ecological economics, progress is a non-expanding economy.
Post-growth Economics Expanding on the work of the ecological economists,
there is a worthwhile discussion in the framework of a post-growth economy.
Representatives of this approach also call for an economy without growth. Jackson
as a representative of the post-growth economy is one of the most renowned
economists of a zero growth paradigm. In his acclaimed book titled Prosperity
Without Growth, he argues that prosperity without growth is not just a Utopian
dream for the highly developed Western economies. Rather, he sees it as a matter of
sound financial policy and ecologic necessity with implementation apparently quite
realistic. In rich nations according to Jackson, basic needs are provided for in plenty,
and the increase in consumer goods can hardly increase material comforts. The
question he asks:
Can steadily rising income for the already wealthy continue to be the legitimate focus of their
hopes and expectations – in a world of finite resources and tight ecological limits – in a world
still marked by islands of prosperity amidst an ocean of poverty? Or, is there another path to
a sustainable, fairer form of prosperity? (2017, p. 4).
In addition to green economic stimulus programs such as those initiated after the
financial crisis in South Korea, he also calls for ecologically oriented macroeconomics, which should lead to a “Green New Deal.” According to Jackson, the growth
dilemma is expressed, on one hand, by the need to maintain economic stability while,
on the other hand, doing this within the limits set by ecology. Ayres proposes
“another engine of growth that operates on the basis of non-polluting energy sources
and, instead of polluting products, it provides material services” (Ayres 2008,
p. 292). The proponents of a post-growth economy suggest progress means overcoming the growth dilemma. This is why the following model was developed:
10
M. von Hauff
wrote about the stationary state of the economy in his much acclaimed book titled An
Inquiry into the Nature and Causes of the Wealth of Nations.” He proposed the
concept that a stationary state economy would lead to poverty. His conclusion
stated: Only growth can ensure the realization of wealth (Smith 2005).
Daly understands a steady-state economy to be “an economy that does not grow
nor shrink physically in the long run” (Daly 2005, p. 125). In contrast to Smith and
representatives of neoclassical theory, he is convinced that beyond a certain point,
quantitative growth not only reaches its limits but is also uneconomical and provides
the following case as an example: A company or even a household strives for the
optimal level of economic activity. When this level is exceeded by further activities,
it may happen that additional costs (marginal costs) exceed the additional benefits
(marginal benefits). Daly refers to this situation as uneconomical. In macroeconomic
terms, he aggregates the base measures. There is rising consumption of natural
resources (green flow) in order to produce more material goods (brown flow). In
other words: “As we expand brown flow, we reduce green flow” (Daly 1999, p. 5).
The result is “uneconomic growth.” So, in this sense, to the representatives of
ecological economics, progress is a non-expanding economy.
Post-growth Economics Expanding on the work of the ecological economists,
there is a worthwhile discussion in the framework of a post-growth economy.
Representatives of this approach also call for an economy without growth. Jackson
as a representative of the post-growth economy is one of the most renowned
economists of a zero growth paradigm. In his acclaimed book titled Prosperity
Without Growth, he argues that prosperity without growth is not just a Utopian
dream for the highly developed Western economies. Rather, he sees it as a matter of
sound financial policy and ecologic necessity with implementation apparently quite
realistic. In rich nations according to Jackson, basic needs are provided for in plenty,
and the increase in consumer goods can hardly increase material comforts. The
question he asks:
Can steadily rising income for the already wealthy continue to be the legitimate focus of their
hopes and expectations – in a world of finite resources and tight ecological limits – in a world
still marked by islands of prosperity amidst an ocean of poverty? Or, is there another path to
a sustainable, fairer form of prosperity? (2017, p. 4).
In addition to green economic stimulus programs such as those initiated after the
financial crisis in South Korea, he also calls for ecologically oriented macroeconomics, which should lead to a “Green New Deal.” According to Jackson, the growth
dilemma is expressed, on one hand, by the need to maintain economic stability while,
on the other hand, doing this within the limits set by ecology. Ayres proposes
“another engine of growth that operates on the basis of non-polluting energy sources
and, instead of polluting products, it provides material services” (Ayres 2008,
p. 292). The proponents of a post-growth economy suggest progress means overcoming the growth dilemma. This is why the following model was developed:
10
M. von Hauff