1. Several countries have already made transitions toward a
steady state economy. While they are not perpetually
growing, their economies remain powerful and continue
to develop and improve quality of life without
quantitative GDP growth.
Japan is an example of an economy that has remained
largely stable for 20 years (Figure 3). There have been
some fluctuation in GDP but Japan is in a steady state.
There are other examples of strong economies that are
also steady state economies. Notice these are generally
smaller countries which take the limiting space for their
populations and available resources into account. For the
most part, these countries live within their means.
• Germany
• Denmark
• Sweden
• Switzerland
• France
• Singapore
New Economics:
Steady State Economy
Edward Thach, Lauren Standal, Matthew Evans, Dalia Zaghal, Nancy Landrum
INTRODUCTION
WHY IT MATTERS
EXAMPLES
CHARACTERISTICS
RESOURCES
CONTACT
Failed growth economies lead to poverty and
unemployment in the short term. Endless growth
threatens the ecological integrity of Earth’s life
support systems which will lead to long-term poverty
and ruined quality of life. Individual countries and
the larger world economy must transition to an
economic system that follows the principles of
sustainability. This will permit society to use
resources in a manner that does not degrade
humanity’s ability to survive and thrive on Earth.
Unlimited growth is unsustainable on a finite planet
with ecological limits. A sustainable economy will
lead to a sustainable future.
Steady State Economies follow 5 rules intended to
follow the principles of sustainability:
• Resource extraction cannot exceed rate of
regeneration by Earth
• Waste production cannot exceed nature’s ability
to absorb it
• The rate of fossil fuel use cannot exceed the rate
of developing renewable substitutes.
• Resource extraction and waste emissions cannot
undermine ecosystem functions critical to human
survival.
• Human populations must be stable.
The pursuit of economic growth, based on neoliberal
economics, has justified significant degradation of
Earth’s life-supporting ecosystems, which supply the
natural capital required for economies to function.
Exponential growth-based economies assume
wealth can be generated infinitely without respect to
ecological limits. This is unsustainable on a finite
planet. Conventional capitalism claims growth is a
necessity for development.
This paradigm is an artifact of early industrialization
when Earth’s natural resources appeared limitless. It
perpetuates the myth that growth and development
are the same. Growth is beneficial only to a certain
point at which the marginal benefits are outweighed
by the marginal cost. Earth’s decreasing ability to
replenish resources and absorb wastes will increase
the ecological cost of economic growth.
Perpetual growth is no longer economical after
planetary boundaries are exceeded. Studies
demonstrate that we have exceeded several critical
planetary boundaries, including climate change and
biodiversity loss, among others.
In contrast, Steady State economics emphasizes
economies which remain stable in size (Figure 1). It
recognizes the economy as a sub-system nested
within the larger planetary system. If an economy
has overshot its ideal size, it must experience a
period of “degrowth” to reach its ideal, stable size
(Figure 2). This new economic model focuses on
development using the finite resources we have in
ways that allow the Earth to replenish them and
restores the Earth’s ability to absorb the waste
streams of our economy. It respects the Earth’s
carrying capacity and seeks to operate within those
limits.
Boulding, K. (1966). The Economics of the Coming Spaceship Earth.
Daly, H. (2005, September). Economics for a full world. Scientific
American.
Farley, J. (2014). Steady state economics.
Rees, W. (2015, June). Economics vs the economy. Great Transition
Initiative.
Nancy E. Landrum, Ph.D.
Loyola University Chicago
Quinlan School of Business & Institute of
Environmental Sustainability
Email: nlandrum@luc.edu
Phone: 773-508-8953
CHARACTERISTICS
Figure 2. Degrowth transition to a Steady State Economy
Figure 1. Steady State Economy
Figure 3. Japan’s GDP growth as they transitioned to a
Steady State Economy
REFERENCES
To find more information on Steady State and
Degrowth Economies, visit:
• Center for the Advancement of the Steady State
Economy
• Great Transition Initiative
• Post Growth Institute