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Unmeasured “illth” increasing faster than measured wealth

from Herman Daly

The basic issue of limits to growth that the Club of Rome did so much to emphasize in the early 1970s needs to remain front and center, with recycling considered as a useful accommodation to that limit, but not a path by which the growth economy can continue. Well before becoming physically impossible the growth of the economic subsystem becomes uneconomic in the sense that it costs more in terms of sacrificed ecosystem services than it is worth in terms of extra production. That richer is better than poorer is a truism. No dispute there. But is growth in GDP in wealthy countries really making us richer by any inclusive measure of wealth? That is the question. I think it is likely making us poorer by increasing unmeasured “illth” faster than measured wealth. Even a steady-state economy can be too big relative to the ecosphere.  The neoclassical circular flow picture can never be too big by virtue of its being an isolated system. However, neoclassical economists do recognize that the economy can grow too fast (over-allocation of resources to investment relative to consumption), even though its scale can never be too big.

Inevitably national growth economies reach a point where many citizens begin to suspect that growth is no longer worth the cost of excessively rapid adaptation to an accelerating economy of no return – that so-called economic growth has in reality become uneconomic growth. John Stuart Mill recognized that long ago. Why have not more recognized it? Why is growth still the summum bonum of economists and politicians? Probably because growth is our substitute for sharing as a cure for poverty. And because our national accounts (GDP) are incapable of even registering uneconomic growth because they count only value added by labor and capital, and omit entirely the cost of using up that to which value is added, namely the entropic flow of natural resources, the very sap of life and wealth.

  1. Charlie Thomas
    October 29, 2021 at 1:52 am

    I always admired Prof Daly. I was a youngish forest research scientist at the Southern Forest Experiment Station in New Orleans. I believe he was at Baton Rouge for part of that time.
    Eventually he moved on to join forces with Costanza? Good to see his presence here still clear that natural resources are nor infinite and some (phosphorus) may be in declining availability>

  2. Ikonoclast
    October 29, 2021 at 6:27 am

    Technically, “unmeasured “illth” increasing faster than measured wealth” can only be an hypothesis and only a testable hypothesis if “illth” and “wealth” are measured in the same scientific dimension. This is because (a) if something is unmeasured you cannot know it’s quantity and (b) you can only aggregate or compare in the same scientific dimensions.

    Don’t get me wrong. Daly and Mill are in principle correct. But scientific measurements need to be made to find the changeover point. I think the changeover point is long gone. My guess is it occurred about in 1980 to 1990. But in which common scientific dimension(s) should we measure “illth” and “wealth”?

    This paper linked to below illustrates the problem of biological complexity lost. It looks at the depletion of living biomass, most specifically phytomass, which is the price the biosphere pays as we build our human biomass and civilization. Losses of biosphere complexity, ecological sustainability and Holocene stability are clearly so serious as to render civilization unsustainable.

    https://www.pnas.org/content/112/31/9511

    I don’t have completed thoughts on this matter so I can offer no more than the above, the linked paper ad the following disturbing thought. The most radical conclusion possible is that human civilization itself is an “illth”.

  3. Ken Zimmerman
    November 8, 2021 at 7:46 am

    Uneconomic growth is growth that produces negative externalities which reduce the overall quality of life. This is also known as unsustainable growth, where the negative social and environmental consequences outweigh the short-term value of an extra unit of growth, making it uneconomic.

    But in spite of this quandary growth remains the primary goal. It holds that place because growth is equated with progress. The idea of  progress seems one of the theoretical presuppositions of modernity. One can even regard it, not without reason, as the real ‘religion of Western civilization.’  Historically, this idea was formulated earlier than generally thought, around 1680, during the quarrel of the Ancients and the Moderns, in  which Terrasson, Charles Perrault, the Abbé of  Saint-Pierre, and Fontenelle participated. It was then developed on the initiative of a second generation, including principally Turgot, Condorcet, and Louis Sebastien Mercier. It is not a populist notion. But very much the work of intellectual and commercial elites.

    In basing our lives on the idea of progress, we must not pursue the analogy of humanity with an individual man and anticipate a period of old age. For unlike the individual, humanity “being composed of all ages,” is always gaining instead of losing. The age of maturity will last indefinitely, because it is a progressive, not a stationary, maturity. Later generations will always be superior to the earlier, for progress is “a natural and necessary effect of the constitution of the human mind.” (Fontenelle, Digression.)

    Progress can be defined as a cumulative process in which the most recent stage is always considered preferable  and better, i.e., qualitatively superior, to what preceded it. This definition contains a  descriptive element (change  takes place in  a given direction) and an axiological element  (this progression is explained as an improvement). Thus it refers to  change that is oriented (toward the best), necessary (one does not stop progress), and irreversible (no overall return to the past is possible). Improvement being inescapable, it follows that tomorrow will be always better than today. Much like the precept of Calvinism, later taken on by other Protestant denominations that wealth is a physical manifestation of one’s salvation economic growth is considered a physical manifestation of progress.

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