The Folly of the Growth Economy

Is it reasonable to expect our economy to have continual growth? What does economic growth really mean, anyway, and how is it tied to our well-being? Are there better models of well-being we should be using instead?

To begin to explore this, let's first look at the word "economy". It comes from the Greek word oikonomia, which means household management. Oikonomia is related to the word oikos, which we translate as "ecology" but which originally meant house or dwelling place. So oikonomia is, fundamentally, how we manage the place where we live, whether it be our home, our community, or the whole earth. In it's basic definition, it is not concerned with money at all. It is concerned with managing resources, however.

To illustrate this, I'm going to tell the tale of two different "oikonomias". And to keep it simple, these two "oikonomias" are going to be small farms. I'll call it:

The Parable of the Two Farms

The first farm is self-sufficient. It reinvests its resources back into the land by various methods of sound stewardship. Kitchen and yard waste, as well as animal manures, are composted and spread on the fields; crops are rotated; cover crops are used in the off-seasons to protect and amend the soils; beneficial insects are encouraged and symbiotic relationships form among plants and animals, enhancing the well-being of flora, fauna, and soils alike; diversity is a priority. The soil is seen as the ground from which all life springs, so it is treated with great reverence. Care is taken to preserve topsoil and good tilth. Sound land management protects against unnatural erosion and any unnecessary disturbance of the soil structure. Water resources are used judiciously.

This complex and diverse oikos provides everything needed for the survival and health of its inhabitants. And, in most years, enough of a surplus exists to allow for bartering with other places for more "exotic" goods.

The second farm is a little different. It espouses a strange philosophy which it calls oikonomic growth. The goal is not health or well-being. Instead, the goal is to be manically busy and focused on producing more and more stuff. This requires each year to be more productive than the last. They must be able to export more each year. Numbers have to go up, always.

They plant every tillable acre and harvest all of the mature timber. The next year, in order for their oikonomia to show growth, they need to increase their yields. So, they spread chemical fertilizers on the fields and pesticides to limit insect damage. They begin to clearcut their remaining stands of timber. They move their livestock into pens and feed them grain instead of grass, for the sake of efficiency. The soil begins to erode in the clearcuts, the fields demand more and more chemical inputs just to maintain their current yields. Concentrated animal wastes from the pens seep down into the water table and the well.

Eventually, the farm's assets are depleted. The topsoil is gone. The land is sterile. The water is poisoned. The inhabitants are sick. The farm is no longer able to produce.

So how did these two farms fare in managing their households? Which of the two had a sound oikonomia? Is it the one that showed growth for a number of years? Or could it be the one that never showed any growth?

Leaving the parable behind, I'll end with one more question. Can there be such a thing as a steady-state economy--one based on sustainability instead of robbing from the future?

Read what others are saying about the concept of the steady-state economy:

http://www.meander.ca/?p=112

http://www.theoildrum.com/node/3941

http://sinkinglifeboat.blogspot.com/2008/10/facts-are-in-folks-we-dont-need-growth.html

http://robertkyriakides.wordpress.com/2008/09/21/economic-growth-and-a-steady-state-
for-the-planet/

http://www.culturequake.org/Home/Blog/Entries/2008/9/21_Call_for_a_Steady-State_Economy.html

http://tipggita32.wordpress.com/2008/10/08/herman-daly-on-the-credit-crisis-financial-assets-and-real-wealth/

http://sunhomedesign.wordpress.com/2008/08/13/adam-smith-and-a-steady-state-economy/

http://thingsbreak.wordpress.com/2008/10/02/the-conversation-we-should-be-having/

http://www.steadystate.org/