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Abstract

The impetus for this paper is the urgent need is to figure out how a non-growing – even a shrinking – economy may be able to provide human well-being while beginning to restore the health of natural world. Twentieth century economic theory is not well able to conceptualize this problem, especially since it sees growth as necessary for jobs, jobs necessary for income, and income necessary for well-being. To unwind this chain will require some radical changes in economic theory. The theory must focus on the final goal of human well-being, in the present and the future, prior to the intermediate goals of growth, financial wealth, or the maximization of consumption. Equally critical, and difficult, is to find ways for economic theory to take account of human values, and identify the places where they are more salient than market values, or prices. This conceptualization must be done in a context where we have even more reason than usual to doubt our ability to predict the future. This is because the competing forces of technological progress, on the one hand, and the cumulative human impacts on the natural world, on the other, present us with some dramatically diverging possibilities for the future of work. In one possible scenario, technological advances make more and more jobs obsolete: the productive resources of the economy continue to be able to turn out a high level of material goods and services, but fewer and fewer people are needed to keep these processes going. The resulting “technological unemployment” could create massive poverty – unless societies can devise ways of sharing the wealth. The other possible future path is one in which, while the economy retains (with the normal slow decay) the store of capital goods (including technological and other knowledge, as well as information and transportation systems) that have been amassed in the last few hundred years, the system encounters serious constraints from the depletion and/or degradation of the natural resource inputs of energy, water, biota, minerals, and other materials. In this case the relative value of material (including energy) inputs is likely to rise relative to the value of human labor – a trend that would be the opposite of what has obtained quite steadily since the onset of the Industrial Revolution. A likely result of this reversal would be a general reduction in labor income, as well as an overall reduction in economic activity, as measured by GDP.

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