Event Summary & Video: Dan O’Neill on the Steady-State Economy

 

Event Summary by Board of Change Director Michael Barkusky

Video of Dr. O’Neill’s presentation can be found here.

Canadian ecological economist Dan O’Neill delivered an articulate and rather well-polished presentation at a Board of Change event on November 6th at Strut Studios. He stated at the beginning, that his approach to economics is to focus on data, and the presentation, by and large, fulfilled that undertaking. He started off with a time series graph showing how the type of growth in real GDP we have seen since the start of the Industrial Revolution, is historically quite anomalous. Nothing like this had occurred in the many centuries (of which we have any significant knowledge) before the last three. He then made clear mention of how the physical dimensions of continuing GDP growth put increasing pressure on the natural environment. Next, he put somewhat more emphasis on how growth in GDP has become decoupled from any sense of greater human well-being in countries with higher GDP per capita. The general point that population growth and real GDP growth cannot go on forever, is hard to deny; but it is very common to suggest that reaching this limit to growth is still rather far away, and is thus pretty hypothetical. It is also common to suggest that growth can become wholly “green”. O’Neill made two principal points in opposition to this complacency. The first is that we are pushing rather harder against ecological constraints to growth than we perhaps realize, and that may in fact explain, at least to some extent, why conventional macroeconomists are so disappointed with the rates of GDP growth being achieved, and the rates in prospect, in the period since the 2007-09 financial crisis. The second was that it is in fact extremely difficult to make GDP growth sufficiently “green” that, in the aggregate, it effect on the biosphere will be benign. There is certainly no evidence of growth becoming environmentally benign, to date. Levels of pollution in rich countries may well have declined with greater affluence, but global levels of pollution have declined only where serious, enforceable measures have been taken, on a global scale, to reduce them. But most important of all, if GDP growth is not making us feel any better, indeed if some things correlated with it make us feel worse, why are we pursuing it as a collective economic goal?
O’Neill followed up by outlining the kind of policy innovations needed to take us closer to a steady-state economy. One fascinating bit of information in this regard was that the number of unwanted pregnancies, globally, was roughly as large as the current annual growth in global human population; suggesting that the “sustainability dividend” available from greater investment in female education and empowerment and in improving access to safe and effective contraceptive methods, would be very substantial.
A considerable amount of time was left for discussion and numerous interesting questions were asked and insightful comments were made by those present. One interesting thread of discussion touched on the possibility that the “lost decade” without appreciable GDP growth, experienced in Japan was an example of a society groping its way towards a steady-state paradigm as much as a failure of macroeconomic management. The issues that came up were many, varied and incredibly important. Ongoing research and perhaps more importantly, ongoing and urgent discussion of these issues, followed by effective action, should be a high social priority.

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