Outstanding work, Daly's predictions have come to pass 10 years later

books:

	• Beyond Growth: The Economics of Sustainable Development Herman E. Daly Beacon Press, 1997 - 264 pages average customer review:based on 9 reviews view larger image
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highly recommended

Good enough

this book is good enough to get a good view of how SD is going and should go. Though much has changed since this book has been published. Globalization has taken SD in directions that were not previously predicted.

Surprising Religious Angle from Serious Economist

This book is well worth reading for Daly's explanation of "ecological economics." Rather than looking at the economy as a system existing in a vacuum, where an infinite amount of exchanges are possible to create an infinite amount of economic growth--as neo-classical economists believe--Daly places the economy within the physical environment. This environment of course is a place of limits: limits on raw materials and limits on places to store pollution. Thus, Daly shows that the economy must observe limits too.

Common sense, right? Yet, our whole economy is premised on the opposite idea, that we can just keep growing forever. Think of compound interest and then move on from there and you get the idea of how pervasive growth is in our economic mindset today. Offering an alternative is what makes Daly's theory radical.

But the bonus in the book comes at the very end, where Daly offers economics (rightly understood with limits) as the intermediary between the physical world and religious belief. The latter, Daly believes, is necessary to offer humans the inspiration we need to radically change our current society and save our species. Some parts of the text are rough going, but if you're not an economist you can skim them to get to Daly's truly novel integration of heart and head.

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Outstanding work, Daly's predictions have come to pass 10 years later

I've read a *lot* of economics books in recent years, some good, some not. But Daly's is really in a class by itself for seeing the big picture and explaining it clearly: traditional economics is broken. Neoclassical economics today is like high energy physics: all the trusty laws that held so true in normal energy physics, or 19th and 20th century economies, mysteriously start to fail us. I love the simple, yet compelling logic of Daly's insight: take the existing neoclassical model of economics--the circular flow of income between households and firms--and then draw a box around it, to acknowledge that the world is of finite size. Once you do that, analyze however you wish...the recognition of a finite world leads inexorably to the notion of an optimum size for the national and global economy. I like how Daly uses tools from mainstream economics to make the point: we all remember from Microeconomics that every firm has an optimal size, based on the size of the overall economy. Economics has the notion of limits to growth embedded already, we just need collectively to apply that logic without flinching.

Something that impressed me was how Daly in 1997 used his intellectual model to forecast the concentration of asset ownership in the U.S., with the consequence of increasing class disparity and declining real wages for the middle class. That would have seemed like outlandish poppycock in the mid-90s, but now in 2007, lo and behold, it's coming to pass (per the CIA and the Economic Policy Institute, and BLS.gov statistics) for all the reasons Daly outlined 10 years ago. The man is onto something, and policymakers would do well to listen to him.

Even better, I think, is that reading between the lines of Daly's book there is a real and believable message of hope. The world of the future that acknowledges limits, and embraces development over growth (think "quality" not "quantity" of the economy as the goal) is a better place than the world we live in today. Instead of the world becoming a planetary Los Angeles or Hong Kong, where life is crowded, expensive, polluted and mean, what I took away from Daly's book was a clear intellectual architecture for a world that is beautiful, full of possibilities for interesting life work, and full of hope and things to look forward to. I sincerely hope that Daly's vision helps shape the world my daughter grows up in.

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A Truly Important Book

Don't miss reading this book! When I read conventional economics, I constantly find myself asking why most economists use such ridiculous assumptions. Herman Daly's book tells why, and gives a start of what to do about it. Mr. Daly's work convinced me that economics will soon be undergoing a revolution like that of physics in the time of Einstein. As a patent attorney with a biochemistry degree, I can tell you that Mr. Daly is right on the money when he discusses the importance to humanity's future of discarding GNP as an economic measure. If you didn't realize before that understanding entropy is essential to economics, Mr. Daly will tell you. There is plenty of other great stuff here, too.
I don't agree with all of Mr. Daly's points. One of his major themes is that being truly concerned about the environment and the future of humanity requires reverence for the Earth as God's creation. Since I am an atheist, and I am very concerned about the environment and the future of humanity, I find this viewpoint a little hard to swallow. Don't let that stop you from reading this great book, though.

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Growth isn't everything

I can't say enough about how moved I was by this book. Having worked in a corporate setting for a number of years, I have wondered how growth can always be the goal of business and how the world can keep expanding and still accommodate everyone's needs. Herman Daly breaks down the problems with economic growth and how fraudulent it is for measuring economic health. Daly advocates sustainable development from a number of economic and social angles. His explanations become abstract at times, but he effectively challenges established economic thinking and offers alternatives.

Without recognition of physical ecological parameters, economic growth as we know it, including GNP, does not measure economic reality. The concept met with opposition from economists at the World Bank where Mr. Daly once worked (as of the mid-1990s when this book was written). The book starts with a passionate rebuttal to the World Bank and their "preanalytic vision" that the economy operates separately from the environment. In the remainder of the book his frustration is aimed more broadly at neoclassical western economists for ignoring the environment and the laws of thermodynamics. A great example is not accounting for environmental costs during the "throughput" process where products go from raw material to final waste.

I learned how important size or "scale" of macroeconomics is, but not accounted for even though it is surpassing the "carrying capacity" of our planet. Daly refutes modern developments such as an "information economy," to replace depleted resources. Also, lack of natural materials can't be substituted with efficiency: "One cannot substitute efficient cause for material cause--one cannot build the same wooden house with half the timber no matter how many saws and carpenters one tries to substitute," (p. 76).

Globalization, Daly argues, opposes the goal of sustainable development as does free trade, overpopulation, and inequality, all of which are closely analyzed. Globalization and free trade came across to me as particularly harmful because they limit a nation's ability to protect its people, culture, and environment. Daly recommends "maximum wage" to limit inequality. Justification for this concept uses biblical references in a religious-based section, which might seem inappropriate for an economics book, but I found the points made important and well presented.

His solutions for change have the goal of creating a "steady state" economy. With such an economy, humans are able to live on the earth and use amounts of the resources that can be maintained indefinitely. This difficult goal includes principles that may seem radical like population control and limiting inequality. But accounting for our environmental costs in our economy is not radical; it's common sense.

I appreciate the perspective the book takes because it proves that the loss of natural resources isn't just anti-ecological, but also anti-economical. Probably one of the most important books I've ever read.

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reviews: page 1, 2

Named one of a hundred "visionaries who could change your life" by the Utne Reader, Herman Daly has probably been the most prominent advocate of the need for a change in economic thinking in response to environmental crisis. An iconoclast economis t who has worked as a renegade insider at the World Bank in recent years, Daly has argued for overturning some basic economic assumptions. He has won a wide and growing reputation among a wide array of environmentalists, inside and outside the academy.

In a book that will generate controversy, Daly turns his attention to the major environmental debate surrounding "sustainable development." Daly argues that the idea of sustainable development--which has become a catchword of environmentalism and international finance--is being used in ways that are vacuous, certainly wrong, and probably dangerous. The necessary solutions turn out to be muc h more radical than people suppose.

This is a crucial updating of a major economist's work, and mandatory reading for people engaged in the debates about the environment.

"Daly is turning economics inside out by putting the earth and its diminishing natural resources at the center of the field . . . a kind of reverse Copernican revolution in economics."

--Utne Reader

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