Lately, it seems the economy has been in the news a lot. Just earlier this week, NBC News published an article about how voters appear to understand that no matter who wins the election in November, neither Obama nor Romney appear to have any real power to change the course of the economy. It appears that many of these voters may be right. In addition, a growing number of people are also starting to wonder about the viability of the economy in the long run. How can we expect the economy to grow indefinitely in a finite world?
“Freakonomics” author Stephen Dubner addressed the possibility of the growth of the US Economy coming to an end in his bi-weekly podcast short. According to Dubner, the multiple industrial revolutions of the past few hundred years, which brought us steam engines, railroads, then electricity, combustion engines, then digital computers and mobile phones have yielded gains that current advances in technology just can’t match. The marginal increases in technology, like thinner iPhones or computers with more hard drive space, just don’t have the revolutionizing effects like railroads had. Though there is always the chance (even likelihood?) that new advances in technology will bring major change, it is worth considering that perhaps the next great revolution in technology is a few hundred years away, long enough for the US economy to drastically decrease in size.
Perhaps, though, the economy doesn’t need to shrink. Nor does it need to grow, either. This type of economy is called the steady state economy, which neither grows nor shrinks, but rather maintains the same growth size. This doesn’t necessarily translate to stagnation, though, for in a steady state economy, development can still take place. More investment into sustainability, renewable energy, and closed-loop production and consumption will allow even a non-growing economy to bring about huge gains in personal well-being. This period of time can bring advances in the things that truly make humans happy: time with family and friends, a sense of community, conservation of the environment, and the feeling that life has meaning can be focused on rather than the current drive to create, purchase, and consume more and more material stuff.
Speaking of such a steady state economy isn’t heresy, either. A steady state economy was seen to be an inevitable result of a growing economy. Economists from the past recognized the eventual possibility of a steady state economy, including the most influential economist of recent times, John Maynard Keynes. To quote Keynes:
“The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems – the problems of life and of human relations, of creation and behavior and religion.”
So I invite you to consider this as you undoubtedly hear the calls to get the economy back on track. Perhaps we are reaching the end of growth, and the beginning of a new age of sustainable development.