An interview with Dr. Herman Daly

Dr. Herman Daly is not your average former World Bank Senior Economist. He is an ecological economist who has been writing books like For the Common Good and advocating for ideas such as the creation of a steady-state economy for 40 years. Dr. Daly just might know how to build a truly green economy.

What is uneconomic growth and is this already occurring?

Uneconomic growth occurs when costs grow faster than benefits. That is growth that makes you poorer, not richer.

Yes, I think there is a good deal of evidence that we have crossed over into an era of uneconomic growth. But we still call it economic growth. All growth is economic growth as we measure it because we don’t have separate accounts for costs and benefits. We just throw everything into the same pot and call it economic activity. And then the assumption is that that activity is somehow good.

Is moving toward a steady state economy or a zero growth economy the answer?

Yes. This is an economy that provides for our needs without growing larger each year—an economy that only uses the sustainable amount of resources and pollution sinks provided by the ecosystem. You would then back away from putting such a huge burden on the ecosystem.

It seems impossible for a politician to consider this option.

Well, it may be that there is a conflict between two impossibilities. It is politically impossible to limit growth, but it is biophysically impossible to continue it. That is a really tough dilemma. You have to choose on which horn of the dilemma you want to be impaled. I guess I would prefer to take my chances with political impossibility because I am pretty convinced that I can’t do a thing about biophysical impossibility.

Back to the first issue of uneconomic growth: [I wonder] if countries and politicians can ever be firmly convinced that growth is making them poorer instead of richer because it is increasing costs faster than benefits. That is a pretty strong argument that even standard economic types ought to be able to understand. If you experience suffering as a result of a continuous push for growth, then that may begin to teach us something about what we should be doing.

How do you motivate people in a zero-growth economy?

Everybody will still have to work and produce to make a living. We just won’t continue growing. We will still have to reproduce the same pie year after year after year. We just won’t be reproducing a bigger and bigger pie.

So, if you think of a poker game and people competing and striving to win, the pot does not have to keep getting bigger and bigger with every hand. You can play with a constant number of chips and still have a competitive game. 

What challenges did you face at the World Bank?

The problem with the World Bank is that it is largely made up of economists. People come from all over the world so you would expect that it would be diverse; culturally, it is. But intellectually, all of these economists went to the same five or six universities and got their PhDs and Masters in those universities, and learned exactly the same view of the world. So there is not much in the way of diversity of economic opinion within the institution. I would blame that squarely on the economics profession, which has been intellectually lazy and complacent and playing mathematical games in space—and not really paying attention to the world.

What gives you hope?

The United Kingdom held the Commission on Sustainable Development, headed by economist Tim Jackson. Both Peter Victor (a Canadian ecological economist) and I wrote background papers and presented them to that committee. They came up with a report called Prosperity Without Growth and this has just been released (on March 30, 2009). This is probably the most progressive statement that has recently come out of a major government that I know of. So that gives me a little bit of hope that some of these ideas may be gaining traction.

Jordy Gold is a sustainability expert. You will find his work online at www.jordygold.com