OUR CONSUMERIST-CAPITALIST economic system was conceived relatively recently, albeit when conditions were far different than today.
Herman Daly wasn’t one of those people. “There is something fundamentally wrong with treating the Earth as if it were a business in liquidation,” the renowned former World Bank economist and visionary thinker said.
Daly died on Oct. 28, at age 84. Known for his contributions to “steady-state” and ecological economics, he greatly influenced my thinking about economy and environment.
For “defining a path of ecological economics that integrates the key elements of ethics, quality of life, environment and community,” Daly received the 1996 Right Livelihood Award. (I was honoured with that award in 2009.)
Right Livelihood executive director Ole von Uexkull summarized Daly’s contributions: “Herman Daly redefined economics, forging a way forward that does not include the destruction of our environment for economic gain. He sought to demote the notion of growth as the most important economic driver and replace it with a model that respects the limits of our natural resources. It is now our imperative to implement his contributions and ensure sustainable life on our planet.”
Daly knew that glorifying constant growth on a finite planet and failing to correct course is suicidal. Gravity, the speed of light, entropy and the laws of thermodynamics are forces of nature. There’s nothing we can do about them except live within the boundaries they delimit.
But we created the economy. If it doesn’t work, we should fix or replace it.
Others have also revealed the archaic nature of our system and developed models better suited to our times and conditions. Oxford economist Kate Raworth’s “doughnut economics” offers a practical way to achieve the rethinking and reform Daly called for.
We can’t elevate economy above environment, or pit them against each other. As Daly said, “The economy is a wholly owned subsidiary of the environment, not the reverse.”
We’re part of nature, and everything in nature, including us, is interconnected. What we do to it, we do to ourselves. Accelerating fossil fuel exploitation, deforestation, mining, wetland destruction and consumerism has far-reaching, interrelated consequences, from climate chaos to biodiversity decline to water shortages.
We got ourselves into this mess mostly through mistakes and ignorance, but we’ve failed to address it adequately because of greed and fear of change. This fear — and doubt — has been stoked for decades by the oil, coal and gas industry, which has spent enormous amounts of time and money to convince people that climate change isn’t a big problem and it would be too costly and disruptive to shift to renewable energy — even though their own scientists warned of the danger starting in the 1970s or earlier!
The current system continues to reward this behaviour with record profits, massive executive compensation packages and few consequences.
As Right Livelihood notes, Daly’s “masterly synthesis of the application of classical concepts of capital and income to resources and the environment, the laws of thermodynamics, and the insights of ecology … resulted in a leap in understanding why dominating economic systems are destroying the environment” and “deeply influenced the debate about what should be done about this question.”
Daly argued that it’s false to assume growth increases living standards, because gross domestic product as a measure only accounts for benefits, leaving out costs to human health, the environment and the ability of future generations to live well.
He also argued that the “wealthy part of the world has to make ecological room for the poor to catch up to an acceptable standard of living. That means cutting back on per capita consumption, that we don’t hog all the resources for trivial consumption.”
We’re trundling down a broken road in a gas-guzzling antique. It’s far past time to move into the 21st century. If we continue to define progress by ever-increasing growth and GDP, and cling to an antiquated system that encourages waste, destruction and greed, we’ll soon break down or run out of fuel.
We often say visionary people are “ahead of their time.” With Daly, it’s more like we’re behind his time! We need to catch up. Fast.
For a detailed look at Daly’s life and ideas, read economist (and David Suzuki Foundation honorary board member) Peter Victor’s recent book, Herman Daly’s Economics for a Full World. David Suzuki is a scientist, broadcaster, author and co-founder of the David Suzuki Foundation. Written with contributions from David Suzuki Foundation Senior Writer and Editor Ian Hanington.