Center for the Advancement of the Steady State Economy
Regular Contributors:  Herman Daly, Brian Czech, Brent Blackwelder, Rob Dietz, and Eric Zencey. Guest authors by invitation.

Rio+20 Needs to Address the Downsides of Growth

by Herman Daly

Note from the editor:  The Natural Resources Forum (vol. 35, no. 4) asked 29 experts, including Herman Daly, “What do you think should be the two or three highest priority political outcomes of the United Nations Conference on Sustainable Development (Rio+20), scheduled for Rio de Janeiro in June 2012?”  His answer succinctly sums up the steady-state perspective.

Herman DalyThe conclusion of the 1972 Limits to Growth study by the Club of Rome still stands 40 years later. Even though economies are still growing, and still put growth in first place, it is no longer economic growth, at least in wealthy countries, but has become uneconomic growth. In other words, the environmental and social costs of increased production are growing faster than the benefits, increasing “illth” faster than wealth, thereby making us poorer, not richer. We hide the uneconomic nature of growth from ourselves by faulty national accounting because growth is our panacea, indeed our idol, and we are very afraid of the idea of a steady-state economy. The increasing illth is evident in exploding financial debt, in biodiversity loss, and in destruction of natural services, most notably climate regulation. The major job of the United Nations Conference on Sustainable Development is to help us overcome this denial and shift the path of progress from quantitative growth to qualitative development, from bigger to better. Specifically this will mean working toward a steady-state economy at a sustainable (smaller than present) scale relative to the containing ecosystem that is finite and already overstressed. Since growth now makes us poorer, not richer, poverty reduction will require sharing in the present, not the empty promise of growth in the future.

The Infinite-Planet Approach Won’t Solve the European Debt Crisis

by Eric Zencey

Last week European leaders met in Brussels and, like sophomores cramming before a final, pulled an all-nighter. Their exam was a real-world project: restore investor confidence in the Eurozone. A lot of pressure was put on David Cameron to bring the UK into the new agreement; he was adamant in his refusal. Even without the UK, the measures that the Eurozone nations have announced may restore investor confidence, but one thing is certain: they shouldn’t, because they’ll fail miserably at staving off future financial crisis.

That’s because “restoring investor confidence” and “fixing the broken system” are two very different goals.

If more investors were like Jeremy Grantham, who’s got a clear view of the origin of the financial crisis, the two would line up a lot better. But most investors, like all of the policy makers who met in Brussels, are working out of an old-fashioned and mistaken economic model. Restoring confidence in a system built on that model isn’t going to fix what’s wrong.

What, exactly, is wrong? The New York Times articulated the conventional thinking when it opined, a few days before the all-nighter in Brussels, that the root of the debt crisis is “lack of growth.” The first step toward success in solving any problem is to define it accurately, and the conventional diagnosis gets it wrong because it looks at just half the problem. A more complete diagnosis: Some of the European economies haven’t been able to grow fast enough to pay back the burden of debt that has been wagered on them.

This formulation lets us see the path to a sturdy solution: if we want to avoid crises of debt repudiation, we need to limit the total creation of debt, public and private, to the amount that we can reasonably expect to be paid back through economic growth.

But instead of solving the problem of recurrent (and increasingly painful) crises of debt repudiation by looking at the system as a whole, the policy makers who met in Brussels went after just the most recent and obvious symptom: government deficits and threatened government defaults by the weaker economies of the Eurozone. When deficits are created by sovereign governments — governments that have the power to print money to cover them — they’re inflationary, and inflation is one way that a system’s need for debt repudiation can be met. But within the Eurozone, the European Central Bank holds inflation in check, so the necessary and expected debt repudiation has to take a different form. It has come this time as Greece’s move to renegotiate bond liability under threat of default — holders of Greek government bonds will get fifty cents on the dollar, not the full amount they expect. The conventional view sees that and thinks, “if Greece didn’t run deficits it wouldn’t have to default.”

That’s true, but too limited to get at the root of the problem. What the conventional frame of analysis doesn’t foresee: If you let the burden of total debt grow unchecked, and if you control both inflation and governmental default by mandating balanced budgets, you’ll simply displace the pressure for debt repudiation to somewhere else in the system. It will come out as bankruptcies and foreclosures or other private defaults, as stock market crashes, as cuts in pension promises or wage contracts, as loss of paper assets or expected future income of any kind. We can’t forestall the next crisis of debt repudiation unless we rein in the total creation of debt.

The new EU plan would take a major step toward making the Eurozone monetary union into a fiscal union, with stronger centralized control of inflationary deficits. Under the new rules, Eurozone member nations will have to balance their budgets over the economic cycle (if they go into deficit in times of recession, they’ll have to run a surplus in times of growth) and submit their budgets to the European Commission for review and approval. Currently member nations face penalties if they run persistent deficits — penalties that Greece consciously chose to ignore rather than see its economy sink into unemployment and recession under the onslaught of cheap imports from countries running a surplus. The new plan would have Eurozone member nations suffer larger, automatic penalties if they don’t obey the budget-balancing rules.

That will control inflation and bond default as methods of debt repudiation by imposing austerity budgets on struggling Eurozone members. (There are no penalties for the countries, like Germany, that create the other half of the problem by running trade surpluses.) Governments will have to cut social services and regulatory enforcement — cuts that will be touted as the best way to restore growth, and which will work to the benefit of the 1%. The rich get richer and government gets smaller — just what neocons and moneyed interests like to see.

As plenty of commentators have noticed, fiscal integration under the new budget rules and procedures means a loss of national sovereignty within the Eurozone. As only some of those commentators have cautioned, this makes government in Europe less democratic and less responsive to citizen concerns. “No problem,” say bankers and financiers. Democratically empowered citizens are likely to demand the level of governmental services and environmental protection that well-to-do nations are expected to provide — and those are luxuries their country can’t afford, not if it’s to grow rapidly enough to pay back the burden of debt it labors under.

The movement toward fiscal union and budget austerity thus represents the victory of growth-for-the-sake-of-growth over democracy-for-the-sake-of-democracy.

On an infinite planet, the two need not be at odds, and in fact can be seen to support each other. They certainly seemed to track together through much of the nineteenth and twentieth centuries, as market economies expanded into an underdeveloped world. But in a world built out to the limits of what ecosystems can handle, it becomes increasingly obvious that there’s a tradeoff.

As should be obvious to policy makers, the expansionary phase of human economic history is over. It is no longer possible to have both democracy and robust, footprint-expanding growth. The freewheeling creation of debt, whether public or private, drives the latter. To preserve it as a very profitable feature of the economy, bankers and financiers are perfectly willing to sacrifice the former. That’s the deep and troubling lesson of the European Debt Crisis: today, the largest threat to democratic forms of government is the fact that the planet hosts a human debt-creation system suited for perpetual growth on an infinite planet.

Because an economy deals in physical reality — that is, it runs on matter and energy drawn from a finite planet — it is impossible for economic production to grow infinitely. Debt, being entirely imaginary, can grow however rapidly we choose to let it. A crisis of debt repudiation is the unavoidable result of a mismatch between the two. The conventional frame does not admit this, and it leads us straight toward regressive and destructive policies, including the elimination of environmental and social safeguards. Those safeguards set limits to what we let ourselves do in pursuit of economic growth, and thereby give us a higher standard of living by protecting us from environmental harms and economic insecurity.

Since a higher standard of living, and not growth for its own sake, is the ultimate purpose of the economy, it makes sense to allow for the possibility that the solution to our system’s regular crises of debt repudiation lies in controlling the creation of debt. The alternative — demanding more and more economic growth, ever larger throughput of matter and energy — is impossible to sustain on a finite planet.

Even in the short run, the infinite growth model is counterproductive. It leads to a declining standard of living and a loss of democratic freedom for the majority of the world’s population — Americans no less than Greeks, Italians and other Europeans. It does so because whether we’re prepared to admit it or not, we’ve reached the limits to growth. More often than not, further growth in GDP is uneconomic growth, because it costs us more in lost ecosystem services and other “disamenities” than we get in benefits.

Pro-growth people don’t see it that way, of course, no doubt because many of them are the ones who receive those benefits by imposing losses on the rest of us. Many of those losses emanate from, and aren’t fully contained within, the rapidly developing nations of China and India — countries whose leaders have mistakenly accepted a demonstrably flawed element of neoclassical thinking, the Environmental Kuznets Curve. This is the idea, much beloved of pro-growth advocates and members of the 1% everywhere, that environmental quality is a luxury that nations will be able to afford only after they develop more — which they can do by cashing out their natural capital for sale on world markets, and by hosting “sink” services, poisoning their land and mortgaging their future by absorbing the global economy’s waste stream.

The ecological footprint of the global economy is currently larger than the globe it inhabits. But you don’t have to believe that we’ve reached the limits to growth in order to see that the basic problem behind the European Debt Crisis is the mismatch between our rate of debt creation and the rate at which we can grow real wealth in order to pay that debt off.

How much can real wealth grow under reasonable environmental safeguards and with reasonable protection of worker (and citizen) health and safety? The answer is, in part, empirical. The non-empirical part has to do with those environmental and health and safety standards: what counts as “reasonable”? Opinions will differ, but only an out-and-out infinite planet theorist can argue that environmental constraints need to be lessened, and only an unreconstructed robber baron could argue that workers ought to be free — “free” — to starve or take on employment that could kill them.

Here’s how to begin to fix the broken system: Agree to minimum standards for environmental and health and safety regulation, such as those promulgated by the UN; find the sustainable rate of economic activity that’s possible within those limits; and limit the growth in debt — all debt, public and private — to what’s needed to support that activity. With such a fix, the human standard of living would be raised not though footprint- expanding growth, but through technological innovation that allows us to achieve more benefit from a constant, sustainably sized throughput.

If more investors understood that the excessive creation of debt in all its forms — not just government deficits — is the driver of our crises of debt repudiation, this reining in of the creation of debt would be the only way to restore their confidence.

Educating investors and policymakers about the economic and financial realities of a finite planet is a huge task, but eventually they’ll come around. They’ll have to. The planet is, after all, finite, and it’s going to keep offering the lesson until everybody gets it.

An Open Letter to Peter Kent, Canada’s Minister of the Environment

by James Johnston

Regarding Your Modest Proposal for Preventing Canada from Remaining Cold

Dear Minister Kent,

On December 12, from the foyer of the Canadian House of Commons, you irrationally rationalized why it is a good idea for Canada to pull out of the Kyoto Protocol. I would like to congratulate you on your cheeky display of hyperbolic satire — there was so much cognitive dissonance and misleading rhetoric in your statement that it couldn’t possibly have been serious! I can’t wait for the day when you reveal that your government’s position is one big elaborate hoax designed to taunt the world into acting on climate change. I want to point out where your satire was effective but also give you a little bit of advice on how you could have made your statement even better.

First of all, you could have come right out and given the “real” reason why the “Harper Government” (TM) is getting out of Kyoto: because global warming is in Canada’s national interest! Developing the tar sands and pumping out greenhouse gasses to the max has the obvious benefit of improving Canada’s national temperature.

We all know that international forums are talk-fests that amount to non-binding statements of procrastination, but I laughed out loud when you pretended not to understand the symbolic value of forums like Kyoto and Durban. This rings especially true for a government that has proven its media savvy by virtue of authoritarian-style message control. Indeed, Kyoto has become a misplaced symbol of climate justice. But standing before a global audience and shamelessly teasing the world with such irresponsible nonsense! Priceless!

You were pretty convincing each time you conjectured that it is possible to create “jobs and growth” while also reducing emissions. Surely someone of your intellect and stature knows that at no time in history have we had economic “growth” without a corresponding increase in greenhouse gas emissions. Certainly not when the figures are adjusted to track the export of pollution at the planetary level. Development, maybe, but not growth! Man, I have to tell you, the joke became more cruel each time you repeated it (which happened a lot). Use it sparingly next time.

Your goal to reduce emissions via a “legally binding agreement to address global emissions that allows us to continue creating jobs and economic growth in Canada” hints at how elaborate the government’s hoax must be. At present, the Canadian government is shaping an economic agenda where more and more “growth” is coming from unsustainable oil production, natural resource extraction, and real estate inflation. No sane person thinks this is a good trajectory for the planet. Talk about wanting it both ways! Must be Christmas (well not quite, but almost — a few more sleeps!!). The world will be so shocked when you reveal the truth — about the Canadian position, I mean (not about Christmas).

Speaking of Christmas, I had an idea when I saw you pretend to stand up to big emitters like China and India. Way to goad them into action, by the way. But you know what would have been even better? Declaring that you are “standing up to preserve the Canadian holiday tradition of consuming an excess of cheaply manufactured Asian goods.” Then, when emissions go up in Asia as a result, you can stomp and huff that it’s “all their fault.” You missed a few opportunities like this to set yourself up for future satirical tantrums.

There were a couple of moments when your sense of humour went a little too far. Like when you repeated the government’s nonsensical target for emissions. The promise that you will focus on “reducing greenhouse gas emissions by 17 per cent over 2005 levels by 2020″ — effectively doing less than the previous government and pretending that it will save us from climate disaster — that’s so funny it hurts (my children). You can’t keep that joke up forever. But I double over with laughter each time you say your target is somehow the previous liberal government’s fault. Those genetically incompetent liberals!

It was cute how you pretended that “Canada’s position” is shaping a global consensus among the “EU… the United States, Australia, New Zealand, [the] least developed countries and the group of 43 small island states.” Cute, because Australia’s Minister for Climate Change implied they were leading the way by instituting a carbon tax, and don’t tell me that you’ve changed your “position” on that one! That would ruin the hoax! Beyond that, judging from how irked tiny Tuvalu was about your statement, you must have known that you were pushing a few buttons. Ian Fry, Tuvalu’s lead negotiator at Durban, said that “it’s an act of sabotage on our future.” Seriously, though. Tuvalu? Who knew that was even a country, right? ;)

Just when I thought you were going too far, you made a point so absurd that it reassured me of your comedy genius. The pièce de résistance was when you quipped that Kyoto would require Canadians to remove “every car, truck, ATV, tractor, ambulance, police car and vehicle of every kind from Canadian roads; or, closing down the entire farming and agricultural sector and cutting heat to every home, office, hospital, factory and building in Canada.” Well light my hyperbolic pants on fire and sound the alarm. Sure it would… if we choose exclusively to develop the tar sands instead! You’re such a drama queen. I’m glad you know Canadians aren’t stupid enough to believe such misleading statistical play. Who could ever dream of taking their ATV off the off-road anyway!?

And finally, regarding your plea at the end for “an agreement that works” for jobs …and growth …in Canada …and China …and Tuvalu …and for emissions reduction. Frankly, it was getting a little convoluted. Next time you should just let out a loud fart in front of the press, apologize for the emissions and then, in a fit of despair declare “what’s the point!? By the time global warming starts wreaking havoc, I’ll either be out of government or dead. What a waste of time. Stupid liberals.” Boy would that ever ignite a global response!

Anyway, you’re cutting it pretty close. It’s just about too late to stop runaway climate change and it’s making us all very nervous.You’re going to have to reveal your true position pretty soon and stop taunting us with these clever hijinks.

In the meantime, I’m looking forward to seeing more of this precious, mind-bending stuff. And soon. It’s truly a joy to watch.

Could Obama Be the First Steady-State President?

by Brian Czech

Could President Obama be the one who leads Americans to recognize the ever-growing conflict between GDP and the health of the nation? Could Obama be the first to hearken the steady state economy — stabilized levels of production and consumption — as the sustainable alternative? Could Obama be the “steady-state president” we’ve all (well not all, but many of us) been waiting for?

Alas, probably not. The time is not quite ripe enough. Yet it is not quite out of the question, either. Obama shows clear signs of steady statesmanship, and citizens show signs of wanting it.

In “Obama’s New Square Deal,” Washington Post columnist E. J. Dionne Jr. described how “President Obama has decided that he is more likely to win if the election is about big things rather than small ones. He hopes to turn the 2012 campaign from a plebiscite about the current state of the economy into a referendum about the broader progressive tradition that made us a middle-class nation. For the second time, he intends to stake his fate on a battle for the future.”

That’s exactly the type of leadership needed to advance the steady state economy as a policy goal with widespread public support. In particular, we need a focus on “big things,” such as the long-run sustainability of the American and global economies. We need a president who will “battle for the future,” not for another percentage point in next year’s GDP growth.

The progressive tradition Dionne sees Obama adhering to is also conducive to the steady state economy, which is roughly indicated by stabilized GDP and a stable standard of living. Dionne rightly points to Theodore Roosevelt and Franklin D. Roosevelt as primary purveyors of the progressive movement, and sees signs that Obama could channel the Roosevelts into a 21st century New Deal for the middle class. TR and FDR were concerned with the middle class, for sure, but they were concerned with much more as well. They were concerned with truly “big things” such as the long-run sustainability of the nation.

Theodore Roosevelt was the father of the American conservation estate, establishing national forests and parks left and right, as well as establishing the first national wildlife refuge at Pelican Island, Florida in 1903. This original icon of the Republican Party would be seen as an iconoclast today, as the Grand Old Party is the last in line to protect our great natural heritage. “Drill baby drill” is the iconic rhetoric of today’s Republicans. TR made an early escape from Big Money with his Bull Moose Party.

Meanwhile, FDR was the leader in establishing the broad sweep of progressive, professional natural resources agencies and programs we have today. The Soil Conservation Service, Fish and Wildlife Service, and Bureau of Land Management, among many others, were brainchildren of Roosevelt and his savvy secretaries of Agriculture and Interior. FDR and his Cabinet knew all about trade-offs, sacrifice, and “opportunity costs.” They knew you couldn’t have your cake and eat it too. They knew well the trade-off between economic growth and environmental protection. By contrast, today’s Democrats are more likely to muddy the conservation waters with the rhetoric that “there is no conflict between growing the economy and protecting the environment.”

But that brings us back to Obama. He is an exception, at least by today’s standards. He is a throwback to the heyday of smart, progressive politics. He doesn’t insult our intelligence with win-win rhetoric. In fact, Obama hardly even uttered the phrase “economic growth” until the recession made it politically impossible not to. He knows we need a paradigm shift in economic thinking and that sustainability is the watchword for the 21st century.

So perhaps the recession has Obama biding his time, waiting until the coast is clear enough for steady statesmanship. He needs some cover, political cover, in order to talk truthfully about the trade-off between economic growth and environmental protection, economic sustainability, and national security. He needs academics, think tanks, bureaucrats, and a growing base of citizens, national and global, to describe the trade-off between economic growth and national wellbeing.

Otherwise, how can we expect Obama to be the first steady-state president?

Storage Nation

by Rob Dietz

It’s beginning to look a lot like Christmas,
Everywhere you go.
Take a look in the storage hut,
Where doors roll open and shut,
And piles of pap and useless crap do grow.

It’s hard to know where to begin a rant about the materialistic mess that our culture has made of Christmastime in the United States. An easy target is the Thanksgiving midnight-madness sales at big-box retail stores. And there’s always those devious marketers who use nostalgia to turn December into a month of mass consumption. But there’s one industry that, more than any other, epitomizes materialism and our seemingly limitless propensity to consume: self storage.

Self-storage businesses are warehouses where people rent garages to hold their excess stuff. In the not-too-distant past, a small number of self-storage businesses catered to homes in transition (for example, when people were moving from one place to another). On the pop culture scene, if self storage made any appearance at all, it was in a macabre role. For instance, in the film The Silence of the Lambs, Clarice Starling searches a storage unit and finds a pickled head in a jar.

Oh how things have changed! Over the past few decades self-storage facilities have popped up faster than Starbucks outlets. The U.S. has over 2.2 billion square feet (78 square miles) of rentable space, more than 3 times the size of Manhattan Island.[1] One out of every 10 American households now leases a unit.[2]

What’s going on here? Two separate currents have come together to form a riptide that drags people under the sea of self storage. The first current is the credit-card-fueled shopping frenzy that has put many Americans in a position of owning too many possessions. The second current is the promotion of self storage as an investment opportunity for entrepreneurs. The first current is pretty well documented,[3] so let’s float along with the second current for a bit.

The place to get started is a bookstore or your local library. There you might be able to find How to Invest in Self-Storage by Scott Duffy and R. K. Kliebenstein (2005), Self-Storage Investments by Richard Stephens (2008), or Rent It Up! Four Steps to Unlocking the Profit Potential in Your Self-Storage Business by Tron Jordheim (2009). Of if you prefer fiction to how-to books, there’s even a novel titled Self Storage (2008) by Gayle Brandeis.

Here’s a quote from the opening of Rent It Up!:

But if you are trying to create as much profit as you can and build a sustainable business, as well as a real estate asset that will increase in value far faster than your competitors’, then you are in the right place and should keep on reading.”

Maybe a row of self-storage units could hold all the books about self storage.

It’s not that easy to define the word “sustainable,” but one wonders what meaning the author ascribes to this term when he refers to building a sustainable self-storage business.

One thing’s certain about sustainability: it doesn’t result from continuous exponential growth. The Self Storage Association (SSA), the trade organization and lobbying arm of the industry, reports that self storage is a $20 billion industry. It has been the “fastest growing segment of the commercial real estate industry over the last 30 years and has been considered by Wall Street analysts to be recession resistant based on its performance since the economic recession of September, 2008.”[4] What has made the industry recession-proof? One answer is that foreclosures encourage the newly homeless to move their stuff into temporary storage. In the age of uneconomic growth, when overall growth is making the U.S. poorer rather than richer, the self-storage industry appears to be an uneconomic leader.

Not everyone has the means to start a self-storage business, but would-be entrepreneurs have another way to get in the game. A cottage industry has developed around auctions from failures in self storage. When a tenant fails to make payments on a self-storage rental, the storage company can auction off the contents of the unit. Another trip to the bookstore or library can catch you up on this trend. These books explain how to exploit such a circumstance: How to Make Boxes of Cash with Self-Storage Auctions by Barbara Rogers (2007), Making Money with Storage Auctions by Edwards Busoni (2008), Mini Storage Auctions: Uncover the Cash Within by L. S. James (2010), and Making Money A-Z with Self Storage Unit Auctions by Glendon Cameron (2011).

It’s a surprise that no one has written How to Make Money Writing and Selling Books about Self-Storage Auctions!

Moving from the unreal to the surreal… self storage has rebounded from its lowly pop-culture status in The Silence of the Lambs. The cable channel A&E broadcasts a program called Storage Wars about people competing for profits in self-storage auctions. A&E’s website says that Storage Wars, “which follows teams of bidders looking to score it big in the high stakes world of storage auctions, ranks as A&E’s number one series of all time among adults 25-54. During its first season, the series averaged 2.8 million viewers per episode and peaked at 3.8 million.”[5]

In the spirit of regaining a positive attitude during this holiday season, I’d like to propose a New Year’s resolution for the nation. Let’s ditch our storage units. It should be a snap for the third-most-popular type of self-storage customers: people storing items they no longer need or want.[6] And for other customers, downsizing can be downright liberating. This Christmas season, the best gift of all is the gift of less cluttered lives.

[1] Self Storage Association Fact Sheet.

[2] Jon Mooallem, “The Self-Storage Self,” New York Times Magazine, September 2, 2009.

[3] For more details see sources such as the Center for a New American Dream and the Story of Stuff Project.

[4] See note 1.

[5] A&E.

[6] See note 2.

A Mindful Path to a Steady State Economy

by Rick Heller

The Occupy Wall Street movement has struck a chord with its protests against growing inequality in the United States. Suddenly, it is conceivable that policies may be enacted in the next Congress that would raise taxes on the rich and make the American dream more affordable. But if all the Occupy movement does is to restore middle-class demand for large homes and late-model automobiles, it will have been a failure.

The United States faces two economic crises: one is a crisis of severely unequal wealth and political power; the other is a climate crisis driven by an economic model based on insatiable consumption. A Robin Hood approach that redistributes wealth from the rich to the less affluent but does not address the dynamic of excess consumption will not fix and could even exacerbate the climate crisis.

These two economic crises have a common driver — greed. Is it possible that the Occupy movement could take on greed itself, or is that pie-in-the-sky dreaming?

Consider this. Back in 1966, only 42 percent of college freshman considered “being very well off financially” to be an important personal goal. That figure rose to about 75 percent by the time President Ronald Reagan left office. If it is possible to promote greed, it must also be possible to promote generosity.

A traditional way to discourage greed is by shaming those who engage in elaborate displays of wealth. But if criticizing excess consumption made a powerful difference, we would have seen results already. Allow me to introduce a practice that can address greed called mindfulness. Although derived from Eastern thought, it has been appropriately secularized for Western audiences.

I’ve led mindfulness meditations at the Occupy Boston spirituality tent. Mindfulness is the practice of paying attention to the present moment with a nonjudgmental accepting attitude. Many Americans have been exposed to it as part of Mindfulness-based Stress Reduction, a hospital-based program that helps people deal with physical and emotional pain. Indeed, the program I am trying to create could be called Mindfulness-based Greed Reduction.

When one pays close attention to the present moment with a welcoming attitude, the here and now becomes more vivid and joyful. Mindfulness can make negative experiences feel neutral. It also makes neutral experiences feel positive, by restoring a sense of freshness to the wonderful things in life you take for granted. When you realize how much you already have, you feel less need to accumulate more and more. It thus promotes modest appetites in place of greed.

The best way to verify this is to start practicing mindfulness yourself and see if it works. But for those interested in a technical explanation, let me go into the neuroscience.

Our appetites go through a cycle of wanting and liking — which reinforces further wanting. When we desire something, the brain transmits a chemical called dopamine. When we get what we want and like it, the brain releases internal opioids. The latter are chemically similar to morphine and heroin, which helps explain how desires can become addictive.

Addicts need increasingly higher doses of a drug in order to continue to get the same high. People who get their satisfaction from having and spending money likewise need more and more of it to feel rewarded. This is because of habituation. Dopamine neurons in the brain react most strongly to unexpected rewards. When rewards come in steadily and predictably, handling them shifts to the habits system, which operates with little conscious involvement and little sense of pleasure.

This presents a challenge to advocates of a steady state economy. How can you keep people excited when the stream of rewards fails to grow?

Spirituality Tent at Occupy Boston

Mindfulness addresses this challenge by showing how to find novelty in the smallest details of daily life. As you tend your own garden, you become absorbed by each blade of grass. This absorption produces a steady flow of dopamine and a continuous feeling of satisfaction. Mindfulness generates novelty and excites the dopamine neurons not by covering a lot of ground fast, but by delving deeper into familiar turf. As the poet Allen Ginsberg once wrote, “You own twice as much rug if you’re twice as aware of the rug.”

Mindfulness practices, including yoga, are spreading rapidly in the United States. They will spread even more quickly if movements like Occupy embrace them. But will this be quick enough to make a difference for the climate crisis? Although I can’t predict the future, it may be easier to change young people’s minds about consumption that it is to alter the energy infrastructure of the United States.

Ultimately, we need to pass legislation that restrains carbon emissions. But it will be easier to do if Americans realize we can continue to grow in happiness even as we shrink our dependence on the planet’s resources.

Rick Heller is the author of Occupy the Moment: A Mindful Path to a New Economy.

Ten Turkeys for Thanksgiving

by Brent Blackwelder

This Thanksgiving is a good time to spot the Golden Fleece Turkey, a bird that epitomizes economic irrationality and environmental destruction. This remarkable breed pollutes air and water and wastes tax dollars, while scamming the public in the process. Although known for its camouflage, especially its ability to hide wrongdoing, the Golden Fleece Turkey regularly treats birdwatchers to astonishing displays of stupidity. Such birds could not exist in a sustainable economy, but the present economic climate provides an ideal habitat, and they’re spreading like many other invasive species.  Below are 10 recent sightings of the Golden Fleece Turkey.

(Note: Wisconsin Senator William Proxmire presented Golden Fleece Awards in the 1970s and 1980s for taxpayer boondoggles.  This Daly News entry is dedicated to his memory.)

1. Animal Factory Slums

Sometimes masquerading under the name of Confined Animal Feeding Operations (CAFOs), these gigantic lots keep thousands of animals in filthy, cramped quarters. They produce over 500 million tons of manure annually, some of which spills because lagoons leak and pipelines break. The spills cause massive fish kills downstream and spread dangerous bacterial contamination. Up to 70% of the antibiotics in the US are used on animals in CAFOs, thereby aggravating antibiotic resistance and jeopardizing one of the miracles of modern medicine. Emissions from these animal slums, tainted with putrid sulfur dioxide, sicken rural neighbors.  “Cheap” food from CAFOs isn’t such a bargain when you add up all the health costs.

2. Continued Subsidies for Nuclear Reactors

In the wake of the Fukushima disaster in Japan (a tragedy that’s still unfolding with more bad news each month), there is a real possibility that damages could top a trillion dollars. Despite such concerns, the nuclear industry keeps fleecing America. The US Congress and the Obama Administration continue to support loan guarantees for new nuclear reactors and to provide liability insurance for nuclear reactor accidents. If reactors are as safe as the industry alleges, one would think that private insurance companies would be eager to make some money here. As we have seen from Japan this year, there is a lot we are not being told, and there’s still a high potential for accidents.

3. The Keystone XL Tar Sands Pipeline from Canada to the Texas Gulf

The extraction of oil from tar sands takes a lot of energy and leaves behind a polluted landscape that native people of Alberta have to live with. The pipeline would pose a threat to every river it crossed en route to the Texas coast. Embarrassed by revelations of shady dealings at the State Department and the announcement of an Inspector General investigation, the Obama Administration has just delayed a decision on whether to approve the biggest pipeline fleece in history.

4. US Automobiles That Travel 200 Miles Per Hour

Ford and Chevrolet have announced their intentions to produce super-fast cars, capable of speeds between 180 and 200 mph. So much for the goals of saving lives, preventing injuries, and conserving fuel. For the past half century 30-50,000 people have died annually in auto accidents, and hundreds of thousands more have been injured.

5. Offshore Tax Havens

It is estimated that the US Treasury loses $100 billion annually as a result of offshore tax havens. This is about the same amount of money the desperate “Supercommittee” of Congress is scrambling to find for deficit reduction by the November 23 deadline ($1.2 trillion over a decade = $120 billion a year). The two biggest bank recipients of taxpayer bailouts are Citicorp and Bank of America. Citicorp operates subsidiaries in 427 tax havens, and Bank of America does so in 115.

6. Tax-Dodging Corporations

Corporate income taxes provided 35% of federal revenue in 1945, but today that total is just 9%. Some of the world’s best known and most profitable companies (e.g., General Electric) play a variety of accounting games and avoid paying any corporate income taxes. Such companies protest that they are obeying the law, but they don’t say that they are lobbying intensively to keep all the loopholes in place. As a result, the American public is told that it will have to endure massive budget cuts to avoid further increases in government debt.

7. Corn Ethanol Subsidies

75 cents of every tax dollar spent on renewable energy goes to corn ethanol. US taxpayers are shelling out over $6 billion in subsidies each year for the corn ethanol program. Corn is an energy-intensive crop to grow, and it often involves the use of the carcinogenous herbicide atrazine (banned by Italy and Germany in 1990). The Volumetric Ethanol Excise Tax Credit is a shameful subsidy (45 cents per gallon blended) that should be cut. On top of that, life-cycle studies show that corn ethanol fails to ameliorate greenhouse gas emissions.

8. Clean Development Mechanism (CDM)

The United Nations administers the world’s largest carbon offset program, the CDM, created by the Kyoto climate agreement. The objective is to provide credits to projects that offset greenhouse gas emissions. The idea is to develop useful projects that would not be built without such a subsidy. But there’s a problem: the UN is awarding credits worth billions to projects that are already built or being built — large, environmentally unsound dams provide perhaps the most egregious example. The Clean Development Mechanism is better labeled the Filthy Scam Mechanism. As of October almost 2,000 dams (2/3 in China) were in line for billions in tax credits with no guarantee of compliance with standards of the World Commission on Dams.

9. Leaf Blowers

Doesn’t anyone rake leaves anymore or sweep a sidewalk? Throughout the year, leaf blowers spew dust, debris, and noise in neighborhoods all across America. Of the 220 million tons of carbon dioxide emitted by off-road vehicles and equipment, power lawn mowers and leaf blowers generate a surprisingly large amount — 12% or 26 million tons. Often powered by dirty engines, these leaf blowers can be a serious source of air pollution. And with unpleasant noise, sometimes exceeding 85 decibels, they can make sitting on the porch seem like sitting at the end of an airport runway.

10. Corporate CEO Pay

CEO salaries are now a whopping 325 times higher than the average US worker.  And the Institute for Policy Studies found 25 companies that paid their CEOs more than they paid in federal income tax.

Decent citizens everywhere should be looking to carve up a Golden Fleece Turkey or two. Happy Thanksgiving!

Wealth, Illth, and Net Welfare

by Herman Daly

Adapted from an article published in Resurgence.

Herman DalyWellbeing should be counted in net terms — that is to say we should consider not only the accumulated stock of wealth but also that of “illth;” and not only the annual flow of goods but also that of “bads.” The fact that we have to stretch English usage to find words like illth and bads with which to name the negative consequences of production that should be subtracted from the positive consequences, is indicative of our having ignored the realities for which these words are the necessary names. Bads and illth consist of things like nuclear wastes, the dead zone in the Gulf of Mexico, biodiversity loss, climate change from excess carbon in the atmosphere, depleted mines, eroded topsoil, dry wells, exhausting and dangerous labor, congestion, etc. We are indebted to John Ruskin for the word “illth,” and to an anonymous economist, perhaps Kenneth Boulding, for the word “bads.” In the empty world of the past these concepts and the names for them were not needed because the economy was so small relative to the containing natural world that our production did not incur any significant opportunity cost of displaced nature. We now live in a full world, full of us and our stuff, and such costs must be counted and netted out against the benefits of growth. Otherwise we might end up with extra bads outweighing extra goods, and increases in illth greater than the increases in wealth. What used to be economic growth could become uneconomic growth — that is, growth in production for which marginal costs are greater than marginal benefits, growth that in reality makes us poorer, not richer. No one is against being richer. The question is, does growth any longer really make us richer, or has it started to make us poorer?

I suspect it is now making us poorer, at least in some high-GDP countries, and we have not recognized it. Indeed, how could we when our national accounting measures only “economic activity.” Activity is not separated into costs and benefits. Everything is added in GDP, nothing subtracted. The reason that bads and illth, inevitable joint products with goods and wealth, are not counted, even when no longer negligible in the full world, is that obviously no one wants to buy them, so there is no market for them, and hence no price by which to value them. But it is worse — these bads are real and people are very willing to buy the anti-bads that protect them from the bads. For example, pollution is an unpriced, uncounted bad, but pollution clean-up is an anti-bad which is accounted as a good. Pollution cleanup has a price and we willingly pay it up to a point and add it to GDP — but without having subtracted the negative value of the pollution itself that made the clean up necessary. Such asymmetric accounting hides more than it reveals.

In addition to asymmetric accounting of anti-bads, we count natural capital depletion as if it were income, further misleading ourselves. If we cut down all the trees this year, catch all the fish, burn all the oil and coal, etc., then GDP counts all that as this year’s income. But true income is defined as the maximum that a community can consume this year, and still produce and consume the same amount next year — maximum production while maintaining intact future capacity to produce (capital in the broadest sense). Nor is it only depletion of natural capital that is falsely counted as income — failure to maintain and replace depreciation of man-made capital, such as roads and bridges, has the same effect. Much of what we count in GDP is capital consumption and anti-bads.

As argued above, one reason that growth may be uneconomic is that we discover that its neglected costs are greater than we thought. Another reason is that we discover that the extra benefits of growth are less than we thought. This second reason has been emphasized in the studies of self-evaluated happiness, which show that beyond a threshold annual income of some $20-25 thousand, further growth does not increase happiness. Happiness, beyond this threshold, is overwhelmingly a function of the quality of our relationships in community by which our very identity is constituted, rather than the quantity of goods consumed. A relative increase in one’s income still yields extra individual happiness, but aggregate growth is powerless to increase everyone’s relative income. Growth in pursuit of relative income is like an arms race in which one party’s advance cancels that of the other. It is like everyone standing and craning his neck in a football stadium while having no better view than if everyone had remained comfortably seated.

Check out the wellbeing issue of Resurgence Magazine.

As aggregate growth beyond sufficiency loses its power to increase welfare, it increases its power to produce illth. This is because to maintain the same rate of growth ever more matter and energy has to be mined and processed through the economy, resulting in more depletion, more waste, and requiring the use of ever more powerful and violent technologies to mine the ever leaner and less accessible deposits. Petroleum from an easily accessible well in East Texas costs less labor and capital to extract, and therefore directly adds less to GDP, than petroleum from an inaccessible well a mile under the Gulf of Mexico. The extra labor and capital spent to extract a barrel in the Gulf of Mexico is not a good or an addition to wealth — it is more like an anti-bad made necessary by the bad of depletion, the loss of a natural subsidy to the economy. In a full employment economy the extra labor and capital going to petroleum extraction would be taken from other sectors, so aggregate real GDP would likely fall. But the petroleum sector would increase its contribution to GDP as nature’s subsidy to it diminished. We would be tempted to regard it as more rather than less productive.

The next time some economist or politician tells you we must do everything we can to grow (in order to fight poverty, win wars, colonize space, cure cancer, whatever…), remind him that when something grows it gets bigger! Ask him how big he thinks the economy is now, relative to the ecosphere, and how big he thinks it should be. And what makes him think that growth is still causing wealth to increase faster than illth? How does he know that we have not already entered the era of uneconomic growth? And if we have, then is not the solution to poverty to be found in sharing now, rather than in the empty promise of growth in the future? If you get a reasoned, coherent answer, please send it to me!

Presenting the Economic Policy of the Occupy Movement

by Brian Czech

If there is one thing the Occupy Wall Street movement has generated, it’s the opinion that there is no unifying agenda or policy being advanced by the Occupiers. Perhaps that explains why we (CASSE) have been asked repeatedly to contribute to that agenda and identify that policy. And perhaps the time has come to oblige.

No one can claim to represent the entire Occupy movement or all its concerns. The wide-ranging movement has taken on local, grassroots issues as much as national, systemic concerns. I got a taste of that recently during a visit to Bloomington, Indiana, where the local Occupiers were camped out on the perimeter of Indiana University. I was in Bloomington to give a talk about steady state economics at the university, and happened upon the Occupiers’ camp my first night in. They had little to say about Wall Street, GDP, or national unemployment. Maybe it was just my timing — which happened to correspond with Halloween– but the Bloomington Occupiers seemed pre-occupied with surviving the annual student “Zombies” march that apparently threatens the security of Indiana University every Halloween. The Occupiers were equally concerned with aggressive Zombies and the police assembled to confront said Zombies. (They feared the police would use the Zombies as an excuse to clean house all around the campus.)

It’s hard to blame the Occupiers for focusing on local issues and forces. Police suppression alone saps the energy from many movements, as I recall from the days of World Bank demonstrations. Yet despite the inevitable localization of Occupier concerns, the Occupy movement needs a national identity to survive, and it needs a macroeconomic policy goal to unite around. That policy goal should be a sustainable and fair steady state economy. Let’s see why.

The Occupy movement is, first and foremost, an objection to the rule of Big Money; big corporations, big banks, and big-time rip-offs of the taxpaying public. It’s all about economic justice. But at this point in history, economic justice is complicated by limits to economic growth. The old notion that a “rising tide lifts all boats” has become morally inadequate and physically irrelevant. In a world of over 7 billion people and an economy over $73 trillion in gross world product, the Wall Street Bull is tromping through an ecological china shop with increasingly endangered glassware. It’s not only that the Wall Street Bull is kicking Occupiers and the rest of the 99% out of the way; the Bull is destroying the planet. It spans the globe but the globe is full.

The Occupiers need to get this, discuss it, and emphasize it. Otherwise, they could be unfairly portrayed as just the latest brand of populists seeking to expropriate the expropriators. Wall Street could point out that everybody has always wanted “theirs,” including Nazis, Bolsheviks, and French revolutionaries known today as “The Terror.”

The Occupiers can do better. They are better.

The Occupy movement can do better especially by adopting the steady state economy as its macroeconomic policy goal. That means an economy with stabilized levels of production and consumption, which means stabilizing population and per-person consumption. It means an economy that fits on Earth without threatening present and future generations with its overbearing, bloating size. It means an economy of stable size that, when accepted by national governments and sought in international diplomacy, replaces war as a mode of getting “theirs.”

Only sound economic diplomacy — steady statesmanship — can ensure that everyone gets enough without killing thy neighbor. Wall Street doesn’t get that. To the corporations and banks, the world is a china shop to buck around in, and good luck to the kicked.

The ball is in the Occupiers court. They’ve got to concern themselves with more than the local food, zombies, and police. Occupiers must decide if they really want to distinguish themselves from the growth-at-all-costs corporations, banks, Democrats and Republicans that really and permanently occupy Wall Street. Can they distinguish themselves with steady statesmanship?

I think they can, and I’m one of them!

The Tyranny of Comfort

by Rob Dietz

When I was a kid, I was on the neighborhood swim team in the summers. No one mistook me for Michael Phelps. In fact, I may be the anti-Phelps. We’re both lean, but while his body is built for buoyancy, mine seems to be designed for sinking. Each year to celebrate the end of the season, the swim team held a potluck banquet and bestowed awards upon the best swimmers. Most years I took home the Coach’s Award, the consolation prize given to the kid who tried hard despite having no chance to win a race. To make matters worse, my nickname as a competitive swimmer was Colonel Mustard. The pool had four lanes. First place earned you a blue ribbon; second place, a red ribbon; and third place, a white ribbon. The obligatory prize for fourth place was a mustard yellow ribbon.

During the season when I was 9 or 10 years old, we had a meet at the opposing team’s pool on a surprisingly cool June evening. My mom and dad sat in chairs on the grass at the edge of the pool deck with other parents rooting for their aquatically gifted offspring. I had just finished a race in my customary place — last. I didn’t have another race for a while, so I went over to where my parents were seated. I was starting to shiver, and it probably showed on my face that I was feeling dejected. Without a word, my dad opened up a towel, wrapped me in it like a mummy, and sat me down in his lap. He used the towel to wipe away my goosebumps, my chattering teeth, and the pain of defeat. I didn’t swim any faster in the next race, but I sure felt a lot better. That evening my dad gave me one of the most memorable gifts I’ve ever received — it was a gift of comfort.

Comfort… the word has a positive connotation; it even sounds pleasant to the ear. It derives from the Latin, comfortare, which literally means to strengthen much. Most people can recall meaningful moments of comfort. But how do we come to appreciate such comfort? How can we be “strengthened much” by such comfort? Only if it comes in response to adversity.

It’s simple to see the benefits of comfortable living. Who wants to lead a life of suffering and deprivation? When you’re hungry, it’s good to have food. When you’re cold or sick, it’s good to have a place to go. When you’re feeling downhearted, it’s good to have the support of a caring companion. We feel comforted when we are able to meet our needs. But there is a limit to the benefits of comfort. If I were to arrange my life with comfort-seeking as the ultimate goal, I would miss out on some of the best stuff.

I would never have felt the warmth from my dad had I not first felt the chill of the pool and the sting of the last-place finish. I would never ride my bike, especially not in the rain. In fact, I might not venture out of doors very often (sometimes the temperature veers dangerously from a comfortable 75 degrees Farenheit). I would never push myself beyond the bounds of comfort to experience what life has to offer. In a lengthy tirade on the subject, Edward Abbey exhorted tourists to exit their vehicles and subject themselves to the wonderful discomfort of the desert (from Desert Solitaire):

“Look here, I want to say, for godsake folks get out of them there machines, take off those fucking sunglasses and unpeel both eyeballs, look around; throw away those goddamned idiotic cameras! For chrissake folks what is this life if full of care we have no time to stand and stare? Take off your shoes for a while, unzip your fly, piss hearty, dig your toes in the hot sand, feel that raw and rugged earth, split a couple of big toenails, draw blood! Why not? Jesus Christ, lady, roll that window down! You can’t see the desert if you can’t smell it! Dusty! Of course it’s dusty – this is Utah! But it’s good dust, good red Utahn dust, rich in iron, rich in irony. Turn that motor off. Get out of that piece of iron and stretch your varicose veins, take off your brassiere and get some hot sun on your old wrinkled dugs… …Yes sir, yes madam, I entreat you, get out of those motorized wheelchairs, get off your foam rubber backsides, stand up straight like men! like women! like human beings! and walk — walk — WALK upon our sweet and blessed land!”

What about the role of comfort in a broader sense, beyond the life of an individual or a family? Comfort seems to have pushed its way to the top of the priorities list when it comes to the economy (maybe comfort takes the red ribbon, a few body lengths behind the blue-ribbon winner, growth). Marketers and consumers share the blame. Ubiquitous ads convince us how much more comfortable we’ll be when we own <insert your favorite overblown, overpriced product here>. And we consistently convince ourselves that we can satisfy our needs by purchasing evermore “comfortable crap.” It’s as if the purpose of the economy is to make sure we’re comfortable.

Is this the American dream?

Blind pursuit of comfort must take some blame for the quandary we find ourselves in. In America, we’re burning through an incredible bounty of fossil fuel, a bounty so energy-dense that most of us fail to comprehend its magnitude. And we’re burning that fuel at a frightening rate to support what Dick Cheney termed our “non-negotiable way of life.” This way of life is centered on comfort. Centered on driving what we want when we want. Centered on powering ever bigger TV screens. Centered on transporting evermore goods along oversized freeways. Centered on consuming any available resource. Perhaps it’s only news to Mr. Cheney (and other politicians before and since), but “unsustainable” will trump “non-negotiable” every time. And America is about life, liberty, and the pursuit of happiness, not the pursuit of comfort.

Like anything else, the pursuit of comfort (both at the household level and at the macro-economic level) requires balance. Some comfort is good. Chasing constant comfort is counterproductive. Another author who’s not quite as hotheaded as Edward Abbey, but just as insightful, has made this point. William Somerset Maugham once wrote, “Any nation that thinks more of its ease and comfort than its freedom will soon lose its freedom; and the ironical thing about it is that it will lose its ease and comfort too.”